[Congressional Record Volume 145, Number 64 (Wednesday, May 5, 1999)]
[Extensions of Remarks]
[Pages E869-E870]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          THE INTRODUCTION OF THE INTERNET FREEDOM ACT OF 1999

                                 ______
                                 

                           HON. BOB GOODLATTE

                              of virginia

                    in the house of representatives

                         Wednesday, May 5, 1999

  Mr. GOODLATTE. Mr. Speaker, I rise today to announce the introduction 
of the Internet Freedom Act of 1999. This bipartisan legislative 
initiative, which I am introducing along with Congressman Boucher of 
Virginia, addresses the challenge that face the Internet by building on 
the strengths that have made the Internet the major engine of growth 
and development in the new Information Age. The legislation ensures 
that the qualities that have provided the explosive growth of the 
Internet in recent years will continue into the new millennium. The 
initiative addresses the crucial challenges currently facing the 
Internet and its future: providing freedom from burdensome government 
regulation, ensuring consumer choice through open competition, and 
protecting consumer-friendly open access to the Internet.
  The Internet is currently at a crossroads. One path continues to 
encourage the principles mentioned above: freedom, competition, and 
consumer choice. The other path, which is looming on the horizon, is 
characterized by heavy government regulation, limited competition, 
higher prices and less choice for consumers. Following this path could 
mean that any company with market power can restrict the ability of 
businesses to compete on the Internet, and the ability of consumers to 
access the Internet provider and content of their choice could be 
subject to the control of a single company. The Internet as we know 
it--open, competitive, and easily available to consumers--will cease to 
exist. That path, unfortunately, is the one we are following now.
  Congress must act now to ensure that the qualities that made the 
Internet a revolutionary tool for both business and users--
deregulation, competition, and easy consumer access--remain fundamental 
components of the Internet for future generations. The Internet Freedom 
Act accomplishes this by achieving three goals.
  The first goal of the Internet Freedom Act is deregulation: the bill 
gets the FCC out of the business of regulating the Internet. It 
accomplishes this by eliminating existing FCC regulations that are 
inhibiting the development and rollout of certain types of broadband 
Internet service in non-urban and rural areas.
  Broadband technology is up to twenty times faster than the old modems 
used for Internet access, and can be compared to the old ``T-1'' 
telephone lines offered for $1,000 a month, but at a fraction of the 
cost. In some areas, it is now possible to obtain broadband Internet 
service, in a variety of forms, for as low as $40 a month. The 
development of broadband technology has the potential to not only make 
fast Internet access available to consumers and small businesses, but 
to make it affordable as well.
  The FCC is currently ignoring its responsibility under the 
Telecommunications Act of 1996 to provide regulatory relief to 
incumbent phone companies by removing existing regulations on data 
traffic that were originally intended to encourage competition in voice 
traffic. The FCC regulations currently prohibit the incumbent phone 
companies from competing in the Internet backbone market. The 
``backbone'' is the very high speed, high capacity lines that 
crisscross the country linking major cities. Existing suppliers of 
Internet backbone are simply unable to keep up with the demand for high 
speed, high capacity backbone bandwidth. They also have little 
incentives to invest in many parts of the country that are far away 
from the main backbone routes. Our legislation would allow local phone 
companies into the backbone market, increasing competition and lowering 
prices for businesses and consumers.

  In addition, many areas of the country are located far from these 
backbone pipes (often but not exclusively in rural areas). Traffic from 
these areas must be hauled to the closest backbone connection point 
(often miles away) and the connections used for this are of much 
smaller capacity than those on the backbone. More backbone investment 
will mean that more facilities will eventually become available in more 
places than ever before. Local phone companies and others may be able 
to justify building major connection points to the Internet in more 
locations, allowing traffic to be aggregated by ISPs and encouraging 
the build-out of more connections closer to customers. This will make 
it possible for more customers to be able to access the Internet 
without being required to make a long distance call.
  The second goal the Internet Freedom Act accomplishes is freedom of 
competition: One

[[Page E870]]

of the main goals of the Telecommunications Act was to open the local 
phone markets to competition to ensure non-discriminatory access and 
safeguard against anti-competitive behavior. However, certain networks 
unaffected by the Act remain closed to competitors and other closed 
networks could be just around the corner. Under this scenario, a 
consumer who wants high-speed broadband service, whether by cable, 
satellite, or copper wire, would be forced to buy it from their access 
provider's ISP. If they wanted service from AOL or another ISP, they 
would either not be able to receive it or would essentially have to pay 
twice.
  A closed network also provides undue leverage over Internet content, 
since one company would possess the ability to give content providers 
preferential access to their ``hostage'' customers. This ability to 
leverage its monopoly vertically can curtail competition and innovation 
in the content market and raise prices for such information or 
programs. It could also limit the variety and availability of content 
that has made the Internet so successful.
  This legislation preserves competition among broadband Internet 
providers without involving the heavy-handed bureaucracy of the FCC. 
The bill achieves this goal by giving a private right of action to ISPs 
who have been unable to compete fairly against other ISPs by broadband 
transport providers. For example, if a company limits the ability of an 
ISP to offer its services over their facilities on the same terms and 
conditions that the cable company offers to another ISP, the first ISP 
would be able to seek relief in the courts.
  The section also preserves competition among ISPs by using existing 
antitrust law. Under this section, evidence in a civil action that a 
broadband access transport provider with market power has limited the 
ability of an Internet service provider to compete in the ISP 
marketplace would be presumed to have violated the Sherman Act. This 
section recognizes that each type of broadband transport provider 
technology is unique, whether two-way cable, copper wire, sport-beam 
satellite or wireless transmission. Each technology is recognized under 
this bill as a separate type of broadband market, and therefore 
providers cannot under current antitrust law abuse that power to limit 
the competitive marketplace of Internet service providers.

  The second section would also ensure openness and competition among 
broadband Internet transport providers by ensuring that the same rules 
apply to the incumbent phone companies, which are already required to 
open their networks to ISPs. In return for removing rate and price 
regulations on data traffic for local phone companies after meeting 
certain rollout requirements, this section would presume a Sherman Act 
violation if the phone company failed to make its ``local loop'' 
available to other carriers who wanted to compete in the provision of 
DSL broadband technology.
  Finally, the Internet Freedom Act encourages open consumer access for 
consumers by making the Internet a more user-friendly environment. The 
third section addresses the problem of illegal mass e-mail, also known 
as ``spamming.'' This section would make it a federal crime for a 
person to knowingly use another person's Internet e-mail address, or 
``domain name,'' to send unsolicited mass e-mails. The penalty for 
violating the section would be the actual monetary loss and damages of 
$15,000 per violation or up to $10 per message, whichever is greater.
  The principles of free-market competition, low government regulation, 
and open consumer access have guided the growth of the Internet. If 
this growth is to continue, we must ensure that public policy reflects 
the best interests of the consumer. The environment that has nurtured 
the early growth of the Internet must be preserved and strengthened to 
spur continued innovation and ensure that the Internet and information-
based economy continue to flourish. But, there are several 
inefficiencies currently in the marketplace that could stifle the 
continued development and innovation of the Internet and the growth of 
our economy. We must fix these problems now, before they require heavy-
handed regulations that slow down the Internet, drive up costs, hinder 
consumer access to information, and cause this engine of potential 
economic growth and future prosperity to sputter and fail.

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