Update: Net neutrality provision voted down

Internet companies and consumer groups calling for a new U.S. law that would prohibit broadband providers from blocking or degrading some connections lost a major battle Wednesday when a U.S. House of Representatives committee voted down such a provision.

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The House Energy and Commerce Committee, during debate on a telecommunications reform bill, rejected an amendment that would write so-called net neutrality provisions into U.S. law. Backers of a net neutrality law want Congress to prohibit U.S. broadband providers from blocking or slowing their customers' connections to Web sites or services that compete with services offered by the providers.

The committee rejected the amendment, on a vote of 34-22, largely along party lines, with all but one Republican opposing the net neutrality amendment offered by Representative Ed Markey, a Massachusetts Democrat.

The committee voted 42-12 to approve the telecom reform bill, largely focused on allowing telecom carriers to offer television services over IP (Internet Protocol) in competition with cable TV. The bill, which now goes to the full House for a vote, would create a national franchising system, instead of requiring that new television providers seek local franchises across the U.S.

Backers of the Markey amendment said it would prohibit broadband providers from creating a new online "tax" by charging Internet companies an extra fee for faster connections to their customers.

The telecom bill, which prohibits the U.S. Federal Communications Commission (FCC) from making new net neutrality rules, will "put at grave risk the Internet as an engine of innovation, job creation and economic growth," Markey said late Tuesday. "This will stifle openness, endanger our global competitiveness, and warp the Web into a tiered Internet of bandwidth haves and have-nots."

Internet companies including Google Inc. and Yahoo Inc., as well as organizations such as the Gun Owners of America, the National Religious Broadcasters, liberal group MoveOn.org and the Consumers Federation of America, have called for a strong net neutrality law. Backers of a strong net neutrality law say it's needed after the FCC last August deregulated DSL (digital subscriber line) providers, allowing them to no longer share their lines with competitors.

The committee's wide-ranging telecom reform bill, sponsored by Chairman Joe Barton, a Texas Republican, would allow the FCC to investigate complaints about the blocking or impairing of Internet content by broadband providers only after the fact.

Markey's amendment would have required broadband providers that set aside faster connections for new services such as video over IP to offer the same speeds to competing services. It also would have required the FCC to create an expedited process to deal with complaints.

Large broadband providers, including AT&T Inc., Verizon Communications Inc. and Comcast Corp., have opposed efforts to write net neutrality requirements into law, saying they're unnecessary. There have been few examples of broadband providers trying to block competing services, they say.

The amendment would have created new regulations for the Internet, Barton said. "I don't think all the Draconian things will happen that they think will happen," he said of amendment backers.

Despite support from some consumer groups, the amendment could have hurt consumers, who now bear most of the cost of new networks built by broadband providers, added Representative Charles Gonzalez of Texas, one of five Democrats who voted against the Markey amendment. E-commerce companies should pay more for broadband because they profit from those networks, he said.

The bipartisan SavetheInternet.com Coalition accused the committee of "selling out the Internet." The group, which says it gathered more than 250,000 signatures on petitions supporting net neutrality in less than one week, said it will continue to fight for a new law as the telecom reform bill moves forward.

After being approved by the committee, the telecom reform bill would have to pass the full House and repeat the same process in Senate. Congress is scheduled finish its work for the year about Oct. 6.