Verizon Says Network Neutrality Fight Could Kill Hopes for Telecom Bill

Tauke kicked off the Pike & Fischer broadband conference with a keynote that emphasized Verizon concerns with net neutrality -- an issue likely to dominate the 2 day event ending today (Wed.). Tauke said Verizon has always supported net neutrality principles promoted by the high tech sector and adopted as principles by the FCC. Verizon agreed in its merger order with MCI last year to abide by those principles. “We have no objection to the things that are articulated in the connectivity principles. We have embraced them for years,” he said. “We think that’s a model that works. But when you try to apply those things not to Internet access but to all of access networks that creates major problems.”

Tauke also said the principles weren’t written for inclusion in a statute. “We think that the prospects of having those principles taken as they're currently written and put in a statute does create problems,” he said. The principle that consumers are entitled to “access” in the hands of “an aggressive regulator” could lead to price controls, Tauke said.

“We get very concerned about the entitlement language when attached to something like access and put in a statute for further interpretation down the road,” Tauke said: “We encourage Congressman Barton and others to do a little careful drafting of that language so that you have language that is more appropriate for statute, which doesn’t invite so much litigation down the road.”

Tauke told reporters after his speech while “time is working against” the House as lawmakers take up the Barton bill the Senate is more likely to be the sticking point. He also said he was concerned the Senate bill is far too broad. “Senator Stevens has the general approach to the policy issues correct,” he said: “My only concern about the Senate bill is that it embraces more issues… The more things that are put in a bill the harder it is to get it through the process. We have a very limited time, particularly floor time in the Senate.”

Tauke said that since Stevens’ proposed USF language is relatively broad, allowing the FCC to develop the rules, the provisions shouldn’t face problems in Congress. “The really detailed stuff is passed over to the FCC to handle,” he said: “I think it’s feasible to do a universal service plan, and looking at the makeup of the Senate, particularly the Senate Commerce Committee, I suspect that the Commerce Committee will not move legislation unless it contains some reforms.” Tauke said USF is a perfect issue for compromise: “It’s not a matter of religion; it’s a matter of money.”

Net neutrality also dominated a panel discussion of evolving broadband regulatory issues. NCTA Senior Vp Dan Brenner warned that net neutrality, taken too far, would discourage companies from building new networks. Brenner said that while network neutrality advocates warn of blocking, he knows of only one occurrence -- the Madison River case, which the FCC handled “in a matter of hours.” In March 2005 the FCC Enforcement Bureau entered a consent decree with Madison River Communications to end an investigation into complaints that the company blocked ports used for VoIP applications such as those offered by Vonage. “It raises the old economist joke -- where you have a bunch of people in a hole 20 feet underground and there’s an economist,” he said: “People say how are we going to get out of here. The economist says, ‘Well, let’s assume a ladder.'” Net neutrality advocates “assume a network funded by somebody else and somebody else’s dollars… to make their business opportunities a reality.”

But Public Knowledge Pres. Gigi Sohn said blocking is a problem. “There are a fair number of incidents of blocking and discrimination,” she said: “For us it’s all about whether broadband network providers will favor their own content and their own services, not about whether people pay for a fatter pipe… I think it’s actually pretty simple, but because the rhetoric has gotten heated policy-makers are confused.”