My Legislative Outlook for Net Neutrality -- An enlightening read not to be missed

Now that the Democratic-controlled Congress is back in full swing, and now that a lot of cards have been put on the table, its helpful to take stock of where we are on the net neutrality issue. Below I provide: an overview, a Senate outlook and a House outlook. 

My bottom line analysis is that there is a very low liklihood of net neutrality legislation passing in this Congress, despite the hype.

• That said, I have seen nothing that would suggest that net neutrality won't remain a leading techcom issue in Washington for years to come.  

Overview:

Given that net net neutrality advocates really want a change in the law, they badly blew their golden opportunity last year to get net neutrality principles into law -- by wildly overplaying the moderately strong hand they had last year.

• Last year they had a consensus legislative vehicle that could pass into law, which meant there was real room for compromise, and progress from their point of view on the issue.
• By being so unreasonable, partisan, and ham-handed on this issue last session, net neutrality proponents self-destroyed their potential for legislative success last year and for this Congress. 
• Rather than having negotiating leverage because many broadband companies wanted legislation, they now have no prospect of a viable legislative vehicle and they have the entire broadband sector strongly united against the unreasonable and hyper-regulatory approach of net neutrality proponents. 
• What's really ironic is that net neutrality proponents have spun this bungling and failure to deliver any real tangible results for their cause as a "victory."
• NN proponents have also made the mistake of setting political expectations so high that they can't possibly live up to them.
  • Ben Scott of Free Press, and a leading net neutrality spokesman has spun it as -- it is no longer if, but when net neutrality will pass. Huh?
• In an attempt to manufacture momentum, Net neutrality proponents also have fueled expectations that with a Democratic-controlled Congress, net neutrality is now a foregone conclusion.
  • What will people think if and when they can't meet those lofty expectations?
  • I believe people will increasingly see the movement as a political facade -- with no there, there. 

Senate Outlook:

The die was bascially cast for nothing to get done in the Senate on net neutrality when last year's failed Snowe-Dorgan bill was reintroduced this Congress as "Dorgan-Snowe".

• First, other than putting Dorgan's name first in the title, the bill was identical to last years bill, even including the typo. The fact that there was no effort: to learn from last year's failure, to improve the bill or to correct its deficiencies, vulnerabilities, or typos, signals the sponsors really aren't serious about moving legislation.
  • If they were serious about legislating they would have tried to reach accross the aisle to attract more than one Republican co-sponsor -- they didn't.
  • What it really exposes -- is that behind the buzz-word blackmail and slogans -- there is no intellectual, professional, or legislative heft or sophistication behind their legislative effort.
• Second, the political way that Dorgan-Snowe was introduced speaks volumes that they are not serious about legislating -- only scoring political points. Dorgan-Snowe was co-sponsored by current Democratic Presidential candidates Sen. Hillary Clinton and  Sen. Barack Obama, and former Presidential candidate Sen. John Kerry.
  • This was surely noted in the Senate Republican Caucus where only 41 of the 48 Republican Senators (excluding Snowe) are needed to keep net neutrality from reaching the Senate floor for a vote.
  • Given that the Senate Democratic Caucus delivered 41 votes to deny Senator Stevens Telecom bill a vote last year, I wouldn't be surprised if 41 Senate Republicans in a Presidential election year would oppose a pet Democratic initiative like net neutrality.
• Third, Senate Commerce Committee Chairman Inouye's spokesperson recently told Tech Daily that "there very likely will not be a comprehensive bill" this Congress for telecommunications.
  • What this means is that unlike last year where the House and Senate committee Chairmen were on the same page on telecom reform, Chairman Inouye and Chairmen Dingell/Markey are not on the same page -- at least at this time.
  • Moreover, what net neutrality proponents won't tell you is that Senator Inouye was a originally a co-sponsor of the Stevens bill last year. And while he voted with net neutrality proponents on the party-line vote in Committee on net neutrality, Sen. Inouye did not support them in opposing the bill on net neutrality grounds. On final committee passage, Senator Inouye voted for the Stevens net neutrality language.
  • In short, the Senate effectively requires 60 votes to pass anything controversial. Any experienced Washington hand will tell you that it is a very tall order to get 60 votes on a partisan controversial issue in a presidential election cycle. 

The most politically interesting development on this issue in the Senate was the stance of Senator Wyden (OR) in introducing a bill to extend the Internet Tax moratorium which expires in 2007. While Senator Wyden is one of the Senate's biggest backers of net neutrality, this important Senator, on this issue, went out his way to put the word out that he did not want a net neutrality amendment to the Internet Tax Moratorium legislation. 

• So why would Senator Wyden take such a position when both involve the government role in the future of the Internet? I have two theories, one tactical and one strategic.
  • Tactically, Sen. Wyden genuinely wants to have the Internet Tax Moroatorium be extended or made permanent. He knows that a net neutrality amendment by his more rabid net neutrality allies would be extremely controversial and kill the Internet Tax moratorium.    
  • Strategically, Senator Wyden must understand that it would not be wise for the new Democratic-controlled Congress, which is focused on winning the White House in 2008 -- to become the party that regulated AND taxed the Internet for the first time.  
    • Being the political party known for being "first to regulate the Internet"  and for "bungling their managment" of the legislative extension of the Internet Tax Moratorium -- on their first political watch since the inception of the modern Internet -- is not a political yoke the Democratic Party wants to carry into a Presidential election cycle -- when they know they need to appeal to the political center.

House Outlook: 

Net neutrality proponents hail the strong support of newly powerful House liberals, House Speaker Nancy Pelosi and new House Telecom Subcommittee Chairman Ed Markey of Massachusetts.

Even with that support, trying to pass net neutrality legislation in the House will be an uphill climb. Why?

• Remember most members have already voted and have decided on this issue. The House roundly defeated net neutrality 269-151 last year. The Democrats now have a new thirty seat majority. While that was a big poitical swing, a majority of this new Congress still voted against Net neutrality last year.
  • Also remember that the type of candidate that the Democrats ran to defeat Republicans were more conservative Democrats, who are not automatic philosophical supporters of a liberal big government scheme to price regulate the Internet for the first time.
  • Last year, Rep Markey did not gain a majority of the conservative democrat "Blue Dog" coalition or a majority of the Black Caucus.
  • Morover, the few big online companies backing Chairman Markey have few jobs in very few congressional districts.
    • Broadband companies, which oppose net neutrality have lots of jobs and job growth in every single congressional district.  
    • Furthermore the CWA union is on record opposing net neutrality. 

The most interesting soap opera affecting prospects for net neutrality legislation in the House is the "delicate" working relationship between new House Energy and Commerce Committee Chairman Dingell and new House Telecom Subcommittee Chairman Ed Markey. Net neutrality proponents that assume all is well in that delicate relationship do not appreciate the import of a couple of factors.

• First Speaker Pelosi just blindsided and embarassed Chairman Dingell in a heavy-handed way by snatching away the issue of "global warming," the Democrats' signature Energy and Commerce issue, from Chairman Dingell's clear jurisdiction and gave it over more to her liberal ally Chairman Ed Markey.
  • Clearly the Speaker did not trust Chairman Dingell, a champion for autoworkers and the auto industry's most powerful friend in Washington, to toe the Speaker's line on global warming.
  • Given that telecom is one of the last union strongholds in private industry, (AT&T has more union workers than the entire auto industry) it will be interesting to see how historically-telecom-friendly Chairman Dingell comes out in this Congress on net neutrality, especially after getting so publicly rolled by His Subcommittee Chairman Markey on global warming.
• Chairman Markey also faces a real dilemma. If he introduces a bill very much like Dorgan Snowe and his bill last year, it will face furious industry and political opposition making it a very tough task to win a slim majority in his Subcommittee and the Full committee.
  • However, if he starts over and crafts a new bill with a different approach, to try and move the bill, he faces screams of betrayal from the liberal blogosphere which thinks any compromise is a total sellout.
  • Moreover, if Markey chooses a different tact to increase chances of success in the House, he complicates the process substantially with a much tougher House-Senate conference.

Now you can see why my bottom-line conclusion is that it is highly unlikely that net neutrality legislation will become law in this Congress.