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from: MultiChannel News

Net Neutrality to Change in Stevens Bill
By Ted Hearn 6/19/2006

Washington— A Senate telecommunications bill is expected to be modified this week to accommodate legislators’ concerns about potential discriminatory conduct by cable, phone and other broadband-access providers that could affect Internet services.

“I think it’s highly likely that it’s going to change,” said a Senate staff member.

Commerce Committee chairman Ted Stevens (R-Alaska), who sponsored the bill, is under pressure from Sen. Daniel Inouye of Hawaii, the Commerce panel’s top Democrat, to strengthen its “network neutrality” provisions. Stevens hopes to bring the bill to a vote in his committee on Thursday.

Stevens Bill Scorecard
The Senate’s communications legislation S. 2686, led by Commerce Committee chairman Ted Stevens, R-Alaska, has ups and downs for cable-industry interests.

Positives:
Franchising: Denies local franchising authorities the ability to review cable system sales or transfers,
Interconnection: Limits the rights to interconnect with telephone company networks to providers of voice services that also have networks

Universal Service: Allows companies other than telephone incumbents to receive subsidies. • Does not require cable operators to match the service territory of phone incumbents in order to receive funding. • Does not require recipients to deploy broadband services in order to receive funding.

Digital TV: Permits cable downconversion at the headend of must-carry digital TV signals through Feb. 17, 2014.
Municipal Broadband: Requires cities to consider public-private partnerships first and allow commercial entities to bid to provide the service in lieu of local government.

Negatives:
Franchising: Delays cable’s access to streamlined approval of revised franchises until current agreements expire or a new provider enters the market.
• Excludes buildout requirement for new cable franchisees. • Bars municipalities from enforcing anti-discriminatory provisions of the law on service rollouts; only state authorities may. • Excludes franchise area definition, potentially undermining anti- discrimination prohibitions.
• Does not clearly define what constitutes a video service provider, potentially excluding IPTV service. • Tentatively includes advertising and home shopping revenue in the calculation of gross revenue.

Program Access: Eliminates terrestrial exemption, forcing the sale of Comcast Sports Net Philadelphia to EchoStar and DirecTV. • Subjects exclusive cable sports deals with unaffiliated programmers to an FCC complaint process. • Exempts DirecTV NFL Sunday Ticket.

TOUGH TO BE NEUTRAL
Inouye would like to prevent providers of high-speed Internet access from blocking services that might be considered competitive to their own video, audio or other businesses; and from demanding fees from Internet companies in exchange for priority delivery of their voice, video and software applications.

Yahoo Inc., Google Inc., Microsoft Corp. and eBay Inc. are at the forefront of the coalition demanding a tough net-neutrality law. But cable and phone companies are resisting.

In his bill (S. 2686), Stevens would order the Federal Communications Commission to study the Internet market for five years and file annual reports with Congress on the activities of broadband-access providers.

Inouye, by contrast, issued a draft bill that would impose stringent restrictions on broadband providers, rather than have the FCC address problems as they arise through the adjudication of complaints.

Responding to the second draft of the Stevens bill released last Monday, Inouye said, “It fails to maintain network neutrality through enforceable provisions that will prevent unfair discrimination by broadband-network operators.”

The Senate staff member said it was “premature” to discuss areas where Stevens and Inouye might be able to close the gulf between them. But if Stevens yields, he’ll likely go along with net-neutrality rules that protect consumers, rather than rules designed to referee commercial disputes, the staff member added.

“A compromise takes two to tango, and we are not quite tangoing yet,” the staff member said.

The White House is opposed to any net neutrality legislation, saying the FCC has current authority to tackle the job. A House-passed bill (H.R. 5252) would beef up FCC authority, including the power to review complaints and mete out $500,000 fines.

VOTE IMMINENT
Stevens is planning a June 22 committee vote on his bill. At that time, Sen. John McCain (R-Ariz.) is planning to offer an amendment that would allow phone companies to bypass local franchising by merely promising to provide cable programming on an a la carte basis, according to a different Senate staff member.

In the current draft of the bill, Stevens would allow phone companies to enter cable markets within 90 days under streamlined franchising rules. Cable incumbents, however, can’t opt in to the new licensing regime until existing agreements expire or when phone companies arrive in the market.

The House would let phone companies enter new markets within 30 days under a national cable-franchising regime that would also let incumbent cable operators opt in at some point. In his committee’s first draft, Stevens would have allowed AT&T Inc. and Verizon Communications Inc. to begin offering video service within 30 days.