[Congressional Record (Bound Edition), Volume 152 (2006), Part 12]
[Senate]
[Pages 16223-16224]
[From the U.S. 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

[[Page 16224]]

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 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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