Update: Net neutrality rejected in tie-vote by panel

A U.S. Senate committee on Wednesday, with a tie vote, rejected a proposal that would have required broadband providers to give their competitors the same speeds and quality of service as they give to themselves or their partners.

The Senate Commerce, Science and Transportation Committee’s 11-11 vote means the net neutrality amendment will not be added to a wide-ranging broadband bill as it goes to the Senate floor. The amendment, offered by Senators Olympia Snowe, a Maine Republican, and Byron Dorgan, a North Dakota Democrat, would have prevented broadband providers such as AT&T and Comcast from charging extra based on the type of content transmitted by Internet-based companies.

Late Wednesday, Senator Ron Wyden, an Oregon Democrat, said he’ll place a hold on the broadband bill because it lacks strong net neutrality requirements. By placing a hold on the bill, Wyden is saying he may object to the Senate beginning debate on that legislation. A hold on a bill can lead to a filibuster, if Senate leaders aren’t able to fix the senator’s objections.

“If [broadband providers] get their way, not only will you have to pay more for faster speeds, you’ll have to pay more for something you get for free today: unfettered access to every site on the World Wide Web,” Wyden said on the Senate floor. “To me, that’s discrimination, pure and simple.”

The Snowe amendment would bring new regulation to the Internet, committee Republicans argued. Snowe was the lone Republican voting for the amendment.

E-commerce companies pushing for net neutrality rules are “enormous” companies that want to profit from delivering multimedia content over networks broadband providers have built, said Senator Ted Stevens, an Alaska Republican and chairman of the committee.

“These people who argue they ought to be able to drop all this stuff on the Internet maybe ought to build their own network,” Stevens said.

The committee’s rejection of the proposal means the fight for net neutrality rules could be stalled for the year. Earlier this month, the House of Representatives approved its own version of a broadband bill but voted 269-152 to reject a net neutrality amendment.

Net neutrality backers said they will continue to push for a law as the bill heads to the full Senate. Among net neutrality supporters are several consumer groups as well as Google, Amazon.com, and Microsoft.

Snowe predicted that without a net neutrality law, large broadband carriers will block or degrade Web content from competitors, creating a slow lane for everyone but themselves and their business partners. Officials with AT&T and BellSouth have advocated a business plan that would allow them to charge extra fees for preferential delivery of some companies’ Web content. The broadband providers need new business plans to pay for the roll-out of next-generation broadband networks, they argue.

Snowe rejected that argument, saying the broadband giants will bury small innovative companies that can’t afford to pay extra fees.

“Consumers are going to have all the choice of a Soviet Union supermarket,” she said. “They will have access to that supermarket, but the choices will be dismal.”

Consumer groups criticized the committee’s rejection of the Snowe amendment, but the tie vote shows the issue is gaining momentum, said Ben Scott, policy director of Free Press, a group advocating for media diversity.

“The Senate Commerce Committee handed control of Internet content to the telephone and cable companies,” Gigi Sohn, president of consumer rights group Public Knowledge, said in an e-mail message. “The committee gave the telephone and cable companies something they have not had in the history of the Internet — a way to control what goes over the ‘Net.”

Verizon Communications praised the committee for approving the underlying bill, which streamlines the local franchising requirements telecom providers must get before offering television services over Internet Protocol in competition with cable TV.

The committee also approved an amendment, offered by Senator George Allen, a Virginia Republican, that would permanently extend a tax moratorium on Internet-only taxes such as access taxes. The Internet tax moratorium, which Congress has extended multiple times since 1998, expires in late 2007. A permanent extension is likely to face opposition in the full Senate from a group of lawmakers who say it ties the hands of local governments.