Telcos on Defensive in Net Neutrality Fight

The major telecommunications companies spend billions of dollars each year on advertising, and millions more on political lobbying. So imagine their shock when a low-budget campaign led by a motley coalition of bloggers and techies helped throw into doubt their cherished plans for making more money on the Internet.

That the coalition perpetrated its revolt over the very fibers the telcos long to further monetize only adds insult to the injury. But the larger lesson is that the Web-borne rebellion of Internet users says a lot about the way the Web is changing marketing and politics.

The issue at hand is net neutrality, a seemingly obscure question of differential pricing for access to varied tiers of Internet service. The telecom companies don’t want net neutrality; they want to add intelligence to the dumb pipes of the Internet backbone in order to sell their own video services (think of telcos as cable companies) and to charge owners of Web sites a premium to send information over the souped-up portions of the network. For example, a search provider might pay for a level of service that would guarantee its pages open at the fastest possible speeds, while a start-up competitor that couldn’t afford the toll would be relegated to the slow lane.

Until April, the tiered-service plan favored by the telcos seemed to be sailing toward congressional approval. It passed one early test when the House Energy and Commerce Committee rejected by a margin of 23-8 a network-neutrality amendment to a larger telecommunications bill now working its way through the House.

But a funny thing happened on the way to business as usual: In late April, after weeks of chatter throughout the blogosphere about the need for net neutrality, a Web site called Save the Internet had its formal launch. Original members include Stanford intellectual-property maven Lawrence Lessig, megablogger Glenn “Instapundit” Reynolds, and philosopher David Weinberger, along with groups as varied as Common Cause and the Christian Coalition of America. Another group called It’s Our Net, backed by companies including Inc. and Google Inc., also began lobbying online.

The net neutrality proponents preach that a Web retooled for differential pricing would stifle innovation, freeze out small companies who couldn’t pay the freight for fast service, and hurt the average user, who would likely absorb most of the costs. And more voices keep joining the chorus, including Tim Berners-Lee, the father of the Web, who wrote on his blog, “The neutral communications medium is essential to our society. It is the basis of a fair, competitive market economy.”

The arguments have resonated in the blogosphere, where, according to the blog search engine Technorati, more than 18,000 posts containing the phrase “net neutrality” had appeared as of early June, along with countless comments from readers.

And Congress is paying attention. The subsequent committee vote after the first-round drubbing was a moral victory for the net neuts, with a number of representatives changing their positions and a much narrower margin of victory (34-22) for the telcos.

As expected, net neutrality supporters lost an early-June floor vote in the House, but they sense the momentum is on their side and expect to prevail when the action moves to the Senate. Meanwhile, pro-neutrality bills have been introduced in both houses of Congress, and several candidates are running for the House with net neutrality as part of their platforms.

“The blogs have really crafted a conversation about the kind of policy-making that has traditionally happened out of the public eye,” says Matt Stoller, a blogger for the political site who has followed the debate closely. “All of a sudden there is a public discourse involving network engineers and policy experts. The voters have been reconnected to the politics, and the Internet is the medium for that.”

Whatever happens in Congress, the debate over net neutrality shows that the rules have changed, and corporations are having a tough time keeping up with the changes. The telcos have seemed slow and off-key in responding to the public outcry.

When telco industry lobbyist and former Clinton administration mouthpiece Mike McCurry tried to sound all bloggy and tough at the Huffington Post Web site, he managed to get Web pioneer Vint Cerf’s name wrong and stir up a firestorm over his condescending tone.

The network neutrality fight shows a newfound strength in what some call the “netroots.” Companies that have relied on traditional means of lobbying and persuasion to get their way ignore this new reality at their own risk.

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