Congress Fails to Pass Net Neutrality Bill

WASHINGTON, D.C. -- The U.S. Congress has adjourned without passing a much-debated broadband bill or strengthening network neutrality rules.

The wide-ranging broadband bill would have streamlined the franchising process that telecom companies such as AT&T and Verizon Communications need to go through to offer Internet Protocol-based television service in competition with cable TV.

But advocates of net neutrality rules pressed Congress to hold on to the broadband bill unless it included a provision prohibiting broadband providers from blocking or slowing competing Internet content.

Congress's failure to pass the broadband bill "shows the power of the issue with net neutrality," says Jim McGann, spokesperson for the It's Our Net Coalition, a group calling for a net neutrality law. "Some lawmakers ignored net neutrality at their peril."

New Congress, Fewer Prospects?

Democrats take control of both the Senate and the House of Representatives when Congress reconvenes in January, and the prospects for a wide-ranging broadband bill may be diminished. Republicans have generally pushed for the bill, while many Democrats have raised objections based on concerns about the lack of net neutrality rules and about provisions that they have said would allow the telecom providers to skip poor areas with their new television services.

The House version of the broadband bill would have required VoIP (Voice over Internet Protocol) providers to offer customers enhanced 911 emergency dialing service, and it would have allowed municipal governments to offer broadband data and video services. The Senate version would have permanently extended a moratorium on Internet-only taxes such as access taxes.

Net neutrality advocates will continue to press Congress to pass a law protecting open access on the Internet, McGann says, although he declines to speculate on its chances in the new Congress. "We're going to, as much as we can, educate members about the issue," he says.

Verizon Pushing State Legislation

The broadband bill will also lose a major champion in Congress next year. Verizon, one of the large broadband providers pushing for streamlined video franchising rules, will refocus its efforts on state legislation next year, a company spokesperson says. In addition, Verizon is watching the U.S. Federal Communications Commission (FCC), which may also act on broadband regulations, says David Fish, a Verizon spokesperson.

"The federal campaign raised the issue to a higher visibility," Fish says. "We've made big strides toward video choice this year, and expect continued progress in 2007."

Other Tech Legislation

Beyond the broadband bill, some tech groups say Congress's post-election lame-duck session produced mixed results. In its final days Congress approved an extension of a research and development tax credit, which allows U.S. companies to get a tax break of up to 10 percent of R&D spending. The credit expired in 2005, and many tech groups called on Congress to reinstate it so that the U.S. could stay competitive with other countries offering R&D tax breaks. Congress approved an extension through the end of 2007, even though some tech groups want the tax credit to be made permanent.

Congress also approved an expansion that could add $1 billion to $2 billion to the program, which has cost about $7 billion a year.