The House of Representatives yesterday passed the Communications, Opportunity Promotion and Enhancement (COPE) Act, a bill that will allow cable companies to compete with phone companies in the blossoming digital TV market. The multi-faceted bill - representing the most significant and far-reaching telecommunications reform in more than a decade - will enable cable and phone companies to set up national franchises for the delivery of digital video, thus sidestepping the local regulatory scheme that currently exists.

But proponents of “net neutrality” are upset that the bill fails to include language to prevent possible “discriminatory practices” on the part of network operators, and that it will allow them to establish paid tiers of service. Rep. Edward Markey (D-Massachusetts), who tried to have the bill amended with stronger net neutrality language when it was approved by the House Committee on Energy and Commerce in April, once again tried to propose an amendment - this time to the Telecommunications Act of 1934 - which would have enshrined net neutrality provisions into law. However, his amendment was defeated, mostly along party lines, 269 to 152.

“The future Sergey Brins, the future Marc Andreessens, of Netscape and Google (News - Alert) ... are going to have to pay taxes” to broadband providers, Rep. Markey told his fellow Congressmen as the amendment was being debated on the House floor. He warned that not approving strict net neutrality measures would result in a sea change in the way the Internet works.

Later in the day, the House passed the COPE Act 321 to 101. Although the Act does not contain the net neutrality language that Rep. Markey and other net neutrality proponents had hoped for, it does include a section that gives the FCC greater power to enforce and uphold net neutrality principles, as well as giving it the authority to impose fines on network operators who engage in discrminatory practices.

Net neutrality is the concept that all people everywhere should have free and unfettered access to all the Web has to offer. In a sense, it is an unwritten Bill of Rights for the Internet – which has been based on a free and open model since its inception in the 1960s. Advocates of net neutrality claim that allowing the big telcos to establish paid tiers will set the stage for them to block or degrade content and services, thus ruining the free and open model which has enabled the Internet to become the success it is today.

Up to present, network operators have employed a “best efforts” approach to the delivery of content and services (meaning that all data is treated equally as it traverses networks), however, the big telcos, including AT&T (News - Alert), Verizon and BellSouth (News - Alert), which operate a majority of the U.S. networks, argue that they should be allowed to charge big Internet companies such as Google and Yahoo! fees for use of their pipes. Their argument for doing so is the rapidly increasing delivery of digital voice and video signals, which tend to eat up precious bandwidth on Internet networks. The big telcos say they are prepared to build new networks which will have greater capacity for digital communications (thus reducing the chance for Internet “traffic jams”), however, they are seeking a new business model which will help off-set the cost of these investments, which are in the billions of dollars.

Opponents to the “tiered Internet” concept claim that it will give network operators too much control over the flow of data across the Internet’s networks. Their biggest fear is that the big phone companies will only provide fast service on their core networks to those companies willing to pay the tolls, while the remainder will be shunted into the “slow lane” of the Internet, thus putting them at a disadvantage that hadn’t previously existed. This, in turn, could mean that users will end up being “blocked” from accessing certain websites (or it will be slower to get to them), or from using certain Internet services, such as IPTV or VoIP phone service (or that those signals will be degraded to the point where “non-paying” companies cannot compete against those which have paid for faster service). In this sense, allowing for paid tiers will substantially change the current model on which the Internet operates, and will skew competition in the favor of those companies which can afford to pay the “tolls.”

Meanwhile, the Senate is due to vote on a separate telecommunications bill, which may or may not include stricter net neutrality rules, later this session. Should the Senate bill gain approval, it will need to be reconciled with the one approved in the House yesterday.

The COPE Act is actually one of numerous telecommunications bills which have been introduced in Congress during this year’s short legislative session. On March 2, shortly after the session began, Sen. Ron Wyden (D-Oregon) introduced the Internet Non-Discrimination Act of 2006, the first bill to outline specific net neutrality regulations. This was followed by the introduction of the COPE Act in the House on March 30 - a bill authored and introduced by Rep. Joe Barton (R-Texas) – and then the Communications, Consumer’s Choice, and Broadband Deployment Act of 2006, which was introduced in the Senate by Sen. Ted Stevens (R-Alaska) on May 1. These were followed by the Internet Freedom and Nondiscrimination Act of 2006, introduced by Rep. Jim Sensenbrenner (R-Wisconsin) and Rep. John Conyers (D-Michigan) on May 18. That bill, which is now under consideration in the Senate, was approved by the House Judiciary committee on May 25. The approval by that committee, however, is regarded by many net neutrality proponents to be nothing more than a “technicality,” as it was more or less the result of a turf battle between the Judiciary Committee and the Energy and Commerce Committee over the power to regulate the Internet.

Even prior to the start of this year’s legislative session - back in the fall of 2005 - there were several net neutrality provisions that were included in draft bills, as Congress began to take up the daunting task of rewriting the Telecommunications Act of 1996 (which is now largely obsolete due to dramatic changes in telecommunications during the past decade, mainly the migration of voice and video to the Internet).

However, because this is an election year, and net neutrality is such a hot button topic, some political analysts say it is unlikely that either the House or Senate will adopt any meaningful net neutrality legislation – at least this time around. (In addition, some have argued that Congress has actually over-complicated the issue through the introduction of so many bills.)

The debate over net neutrality has grown from civil discourse to an all-out frenzy during the past year - to the point where most Internet companies and lobbying organizations are now firmly-entrenched either in the “pro-net neutrality” or “anti-net neutrality” camp. In the “pro-net neutrality” camp are the major Internet content and service providers - Google, Yahoo, eBay and Vonage, to name a few - as well as a long list of non-profit and civic organizations (some of which have just recently popped up), including the American Civil Liberties Union, the American Library Association, the Christian Coalition of America, the Gun Owners of America, Moveon.org, SaveTheInternet.com and the collective known as the “Internet coalition.” Even a few celebrities, including alternative musician Moby and actress Alyssa Milano, have publicly come out in favor of net neutrality. Despite the recently defeated proposals, these groups have said they will carry their fight to the Senate, which is still in the early stages of considering its own telecommunications reform bill.

In the other camp are the big telcos - AT&T, Verizon and BellSouth to name a few – the Internet equipment makers – Cisco and Alcatel (News - Alert), to name two – and a host of large, medium and small corporations which heavily rely on IP communications in order to do business. They claim that allowing the big telcos to build new networks facilitating paid tiers of service will actually benefit consumers by delivering faster, cheaper broadband – and will help stimulate innovation through increased investment via Wall Street.

Whether a lack of congressional action on net neutrality results in “a fundamental change in the whole history of the Internet,” as Rep. Markey has warned, is yet to be seen and will largely depend on what the major telcos do once they are allowed to build separate tiers of service (and whether they use those tiers to “discriminate”). Although net neutrality proponents argue that once the telcos are allowed to build paid tiers, there won’t be any way to put “the genie back into the bottle,” there are some who believe that when, and if, the blocking or degrading of signals becomes apparent, Congress (or perhaps the FCC (News - Alert)) will step up to the plate and deliver meaningful and comprehensive net neutrality laws. Meanwhile, the Republican majority in Congress, which has, in general, seen a lot of campaign support from the major phone carriers, seems intent to not include net neutrality legislation in any upcoming bills, mainly because, as Rep. Barton put it, there currently isn’t any widespread problem with discrimination on the Internet. He and others argue that it is inappropriate for Congress to enact laws for problems which do not yet exist.

Although net neutrality proponents have been focused only on the net neutrality provisions (or lack thereof) included in the proposed bills, many of them at the same time acknowledge that the COPE Act provides real benefits for consumers, in that it will result in greater competition in the paid television market. The bill spells out new rules that would create national franchises, allowing the big phone companies to get into the cable television business without first having to obtain licenses on the local level.

“This bill does a lot and goes a long way to making sure that the cost of cable television will be reduced,” said Rep. Bobby Rush (D-Illinois) in a published report.

Now the Internet coalition, and all the other groups working to preserve net neutrality, must move on to the Senate, where they face an uphill battle.

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Patrick Barnard is Associate Editor for TMCnet and a columnist covering the telecom industry. To see more of his articles, please visit Patrick Barnard’s columnist page.