Transcripts

The House Takes Up The Net/Telecom Tug of War

SUSIE GHARIB: The House of Representatives is expected to vote on a key telecommunications bill this Friday. Among other things, the measure would let telephone companies offer video services without first negotiating franchise agreements with local municipalities. But as Stephanie Dhue reports, there`s a related issue at stake -- a growing battle over what`s called "net neutrality."

STEPHANIE DHUE, NIGHTLY BUSINESS REPORT CORRESPONDENT: Net neutrality is a fight among giants. On one side, the telecom and cable network operators -- companies like Verizon, AT&T and Comcast. On the other, content companies, like Google, Amazon, and eBay. The battlefield issue is whether network operators can charge content companies higher prices for bandwidth, for example, for things like downloading movies.

PAUL GALANT, ANALYST, STANFORD WASHINGTON RESEARCH: There`s a lot of concern on Wall Street that the phone companies are spending billions on network upgrades without any assurance that they are going to get their money back, and this new charge to content companies is a way to help recover their network investments.

DHUE: Content companies have waged a grassroots campaign to keep the network operators from charging higher prices for priority service. They want Congress to pass legislation that will keep the cable and telephone companies from discriminating against web sites.

PAUL MEISNER, VP PUBLIC POLICY, AMAZON: We want to insure that our customers will be able to obtain the services that we provide currently and in the future, without any impairments caused by the network operators to whom our customers are beholden.

DHUE: But network operators say customers aren`t beholden just to them, pointing out there is already competition from satellite and wireless firms. The network operators say they have no intention of doing what the FCC calls blocking, degrading or impairing content. The companies call net neutrality a solution in search of a problem.

WALTER MCCORMICK, PRESIDENT, U.S. TELECOM ASSOCIATION: We don`t believe the we should bring government-managed competition or central state planning to the Internet. Let`s allow companies that are willing to invest, compete, both in providing video services to consumers and provide high-speed Internet access to consumers.

DHUE: The House is expected to pass a telecom bill this week, but without a strict net neutrality requirement. Given the controversy over the issue and the relatively short time for the Senate to act, analysts don`t expect any net neutrality law this year. Stephanie Dhue, NIGHTLY BUSINESS REPORT, Washington.