[Congressional Record Volume 152, Number 101 (Thursday, July 27, 2006)]
[Senate]
[Pages S8367-S8368]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
DISCRIMINATION ON THE INTERNET
Mr. WYDEN. Mr. President, several weeks ago I came to the Senate to
announce I will do everything in my power to block this Senate from
considering the major overhaul of the telecommunications legislation
until that legislation includes specific provisions to ensure that
there is no discrimination on the Internet. A discrimination-free
Internet essentially is what the net neutrality debate is all about.
Certainly colleagues have been hearing a great deal about this
subject as those who oppose net neutrality have spent millions and
millions of dollars trying to convince the American people and the
Congress that somehow discrimination on the net is a good thing. They
have made a big point of trying to say that net neutrality is a very
complicated issue, it is one involving technical issues of
communications law, and it ought to be something left to lawyers and
lobbyists to sort out in Washington, DC.
That is not good enough for me and I don't think it is good enough
for the American people. In fact, more than 500 organizations with
views all across the political spectrum have come together to support
net neutrality and a discrimination-free Internet.
This is the fourth time I have come to the Senate to outline examples
of what will happen if discrimination is allowed on the Internet and
also to respond to some of the most directly asked questions about what
net neutrality is all about.
Today I begin my discussion with a new development just reported by
the Reuters News Service. Reuters News Service reported this week that
the profits of the AT&T company were up by 35 percent, bolstered ``by
strong growth in wireless and high speed Internet services.''
I am of the view this is excellent news. I want to see American
companies be profitable. I believe in markets. I believe in wealth
creation. When our companies do well, of course, they pay taxes. They
pay taxes to the American Government and that can be used for health
care, education, and other services our citizens have such a great
interest in. It is free enterprise that makes markets work.
When Reuters reports that AT&T has made a 35-percent profit primarily
due to wireless and high-speed Internet services, the digital part of
the economy, that is good news.
However, there are other implications with respect to the news this
week about AT&T profits. It seems to me what the news highlights this
week is that AT&T can make money with an Internet that is
discrimination free. They have been arguing, as part of the discussion
involving telecommunications, that somehow it will not be possible for
them to make the profits that are necessary for broadband and
sophisticated communication services to get to all the people of this
country.
The news this week shows that AT&T and other companies can be
profitable with an Internet that is discrimination free. They do not
need to throw net neutrality into the trash can in order to do well.
The events of this past week have proved that AT&T does not need to
discriminate in order to make money.
To continue with the discussion I have begun over the last few weeks,
I also want to go to the question of ``won't consumers just get their
broadband from companies that do not discriminate on the net if somehow
we don't have net neutrality.'' This is an excellent question. The
answer is simple. If there were a competitive market for high-speed
Internet services, the market would guarantee net neutrality. Consumers
would insist that the Internet remain free of discrimination and they
could take their business elsewhere if they didn't happen to approve of
discrimination.
Unfortunately, there is not a competitive market today for high-speed
Internet. Until there is, strong net neutrality protections are needed.
What is the market for high-speed Internet? According to the Government
Accountability Office, in 2005, about 30 million Americans had
broadband service. However, most of these Americans have a choice of
perhaps only two broadband providers, the local phone company and the
local cable company.
Some may have only one provider. Others may have no options at all.
No choice, limited choice, certainly is not my view of a competitive
market. A choice between two is only one step beyond a monopoly. Most
experts say at least four providers are needed in a market for it to be
truly competitive. Today's market is still a long way away from the
kind of competitive model we need to best serve our citizens with the
communications services they deserve.
Many of my colleagues have stressed the possibilities of satellite,
broadband over power line, or wireless as competitors to what is called
DSL and cable. These offerings are not real competitors. Satellite
high-speed Internet is too expensive for the consumer to be a real
competitor with today's services. Both wireless and broadband over
power line are new technologies, and we all hope that someday they are
going to develop into competitive options to the phone and cable
company offerings. They ought to be encouraged. However, they are still
new, and until they become widespread and priced at a competitive level
with cable, for example, the market for high-speed Internet will remain
limited or will remain a duopoly.
A second question I am often asked is: As a small business, what does
all this Net neutrality stuff mean to me? Last week, I came to the
Senate floor and explained what it means for consumers. Small
businesses, of course, are just one type of consumer in the market. And
no Net neutrality is going to mean the same thing for the millions of
small businesses that it means for consumers: a double-barreled
discrimination with less choice and a higher price. Small businesses
also have a second concern: They use the Net not just as a consumer but
also as a market for their business. They have Web sites. Small
businesses across the country use the Net to market their products.
Through Web sites such as NexTag and Yahoo Shopping, small retail shops
are able to reach millions and millions of homes that they could not
otherwise access. A bed and breakfast, say, in central Oregon, in Bend,
OR, is able to market itself on the Net and compete with a Holiday Inn.
For the small businesses, the prospect of a two-tiered discriminatory
Internet, where they will have to pay priority access fees to network
operators, is daunting.
For a small business, the fees that the large Bells and cable
companies would charge could have a chilling effect on their ability to
do business online. While large businesses can afford to take on these
additional costs with only a small hit to their overall profitability,
many small businesses are not going to be able to pay these extra fees.
This would mean they would either get stuck on the Internet slow lane
or have to mark up their prices more than big businesses. Either way,
without an Internet free of discrimination, these small businesses are
going to be at a competitive disadvantage.
In my previous discussions on the floor, in addition to trying to
respond to some of the major questions people are asking about Net
neutrality, I have tried to bring out several specific examples of the
kind of discrimination that would be allowed under the bill that was
passed by the Senate Commerce Committee recently. So today I want to
outline two additional examples of what could happen to our small
businesses if legislation allowing discrimination on the Net were
allowed to move forward.
Let's say, for the purpose of the first example, we have a family
known as the Taylors. The Taylors own an inn on the Oregon coastline.
Occupancy has been lower lately because a large new national chain
hotel opened up down the road. George Taylor's son Mike comes up with
an idea to save the inn by reaching out to new customers: They ought to
start a Web site to market their inn and take reservations online.
In a world with Net neutrality, the Taylor family, with that small
inn, would pay to access the Net, create a Web page, and they would be
off to the races, up and running, marketing their business. Under the
Commerce Committee bill, in order to launch their Web page in the fast
lane so they could
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get priority access to customers across the country and around the
world, that small business would have to pay an additional fee to
hundreds, if not thousands, of Internet access providers around the
country. The priority access fees are a drop in the bucket to that big
national chain of hotels that is hurting their business, but if the
Taylor family cannot pay the extra fees, they are not going to be able
to compete.
A second example of how the absence of Net neutrality would hurt
small business--this one involves a business owner who I am calling
Jessica Myers. Ms. Myers owns a small legal placement firm with eight
employees. In a world with Net neutrality, she saves money on her phone
bills as a Vonage customer. She buys all her office supplies on line
from another small business she found at Shopzilla, and saved thousands
of dollars on new computer equipment from Buy.com. Her employees are
able to navigate law firm Web pages, learning of open jobs and
potential clients to market these openings to.
Under the Commerce Committee bill, Jessica's business is going to see
a huge increase in her costs. Vonage no longer works properly, causing
her to pay extra for phone service from the local phone company. The
office supply store is no longer on line because they could not afford
to pay for priority access and cannot compete without it. Her computer
equipment at Buy.com is now more expensive, maybe 10 percent more,
because Buy.com is passing on the costs they pay the network operators
for priority access. Her employees are much less effective because they
now spend hours every day waiting for law firm Web sites to load that
are stuck in the Internet's slow lane. Her costs go up. Her
productivity and her profits go down.
In each of these two new examples I have outlined of the consequences
for our small businesses, the large businesses that own the Internet
pipes are going to be extending their reach to the detriment of small
business. According to the business plans of the big phone and cable
companies, and what they have told Wall Street, what has been outlined
in the Wall Street Journal newspaper, that is the direction they are
heading. Without Net neutrality, neither of the small businesses in the
examples I have cited is going to be able to use the Net in the way
they do now, and they are going to be disadvantaged at a time when they
are a big part of America's future in competing in the global
marketplace.
The big cable and phone companies have spent millions--more than $40
million since January of this year--to try to make the American people
think that Net neutrality is, to quote one Verizon lobbyist, a ``lose-
lose proposition.'' The absence of Net neutrality will be the lose-lose
for consumers. Discrimination will be seen in Internet content, and we
will see higher prices for consumers. That is why more than 500 groups
of all political philosophies and persuasions have come together to
draw a line in the sand and say: We are going to insist that the
Internet remain discrimination free.
At the end of the day, this issue of Net neutrality, despite what the
opponents and the lobbyists want the Senate to think, isn't that
complicated. Today, the way the Net works is you go with your browser
where you want, when you want, and everybody is treated equally. Those
who oppose Net neutrality want to change all that. They want to make it
possible for phone companies and cable companies to play favorites.
They will be in a position to charge some people more and some people
less. They are people who want to change the way the Net works today,
which is that everybody gets a fair shake.
And that is, again, the point of my citing this afternoon AT&T's
profits that come from wireless services. I repeat, I am glad to see
AT&T do well. I believe in markets, and markets are what make our
country's free enterprise system go. But AT&T is doing well with an
Internet that is based on the principle of equality, Net neutrality,
and no American facing discrimination on line.
I see the distinguished Senator from Tennessee here, and he remembers
our discussion about taxation and on-line services and on-line
businesses. The Senate worked together on a bipartisan basis, and we
have kept the Internet free of discrimination as it relates to
taxation. I think it makes no sense at all for the Senate to say we are
going to let the Internet prosper as it relates to taxation--and
taxation is a big factor, obviously, in business opportunities and
business sales--it makes no sense to keep the Internet free of
discrimination as it relates to taxation and then to throw Net
neutrality in the trash can and allow discrimination as it relates to
so many other aspects of on-line business and services that are
important to the American people.
So this is the fourth time I have come to the floor to discuss this
issue. I do not want to see consumers face the double barrel of
discrimination and higher prices on line. It is my intent to keep my
hold on that overhaul of the telecommunications legislation on until I
see that bill has been changed, until I see it has been altered and
revised to ensure the core principle of the Internet--that everybody
gets a fair shake and that the Internet is free of discrimination. My
hold stays until that bill is altered so we can preserve an Internet
free of discrimination for all Americans in the years ahead.
Mr. President, I yield the floor.
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