Carriers Eye Net Neutrality Politics

Will network operators use newfound elections-spending freedom to lobby even harder against net neutrality? That’s the question some telecom observers are asking now that the Supreme Court has reversed rules barring corporations and labor unions from spending on campaigns. The thinking is that operators could ratchet up their already high lobbying budgets to influence politicians against open Internet proposals considered restrictive by some carriers. And yet, the possibility of such action doesn’t look as likely in reality as it does in theory.

On Jan. 21, the high court surprised many when judges voted to allow stronger corporate and labor influences on the elections process. The decision spurred some pundits in the communications industry to wonder how the decision may impact the net neutrality debate. Namely, it was thought that AT&T Inc. (T), Verizon Communications Inc. (VZ) and Comcast Corp. (CMCSA) might increase spending to combat net neutrality efforts.

AT&T didn’t return a request for comment; Verizon did not want be interviewed for this story; and Comcast isn’t commenting on the recent Supreme Court ruling or its effects.

Although the court order could have an indirect effect on anti-net neutrality financing, “I have to caveat that with all that’s going on in the country, net neutrality is not really going to be a campaign issue,” said Jeff Silva, senior policy director of telecommunications at investment bank Medley Global Advisors. Silva was among the first observers to posit that the Supreme Court decision could turn the net neutrality debate on its head.

With so much government focus on the pressing problems of unemployment, housing, health care and war, net neutrality is unlikely to take center stage in the mid-term elections. Besides, even if it did, companies “tend to give to both sides ... they hedge their bets, for the most part,” Silva said.

Art Brodsky, communications director of public interest group Public Knowledge, a vocal net neutrality proponent, agreed. “Corporations have been spending oodles of money anyway. ...So if they’re going to beat the stuffing out of us by spending millions of dollars, they’ve already got it,” he said.

Meanwhile, for Lawrence Spiwak, president of the Phoenix Center, a conservative think tank that considers net neutrality anathema to broadband investment and innovation, the Supreme Court decision won’t have a big effect in the communications world.

“I don’t think it will be germane one way or the other as whether a particular net neutrality bill will become law,” he said.

FCC v. Comcast

Still, that doesn’t mean companies won’t continue to fork out money on the net neutrality issue, he said.

“Given the huge economic consequences of essentially imposing price regulation on the Internet at the ISP level, I think you are going to continue to see all sides active in the debate,” Spiwak said.

Carriers will want to make sure any new regulation doesn’t keep them from “maximizing the full value of their networks,” he added, while Google Inc. (GOOG) and its ilk “are going to try to use the policy process to ‘lock in’ their particular business plan and foreclose entry by rivals.”

If corporations do use the new Supreme Court change to push harder against net neutrality, they’ll use their financial prowess on Capitol Hill where the House or Senate might be mulling any bills. And the FCC has a net neutrality notice of proposed rulemaking underway where anyone can file comments, but lobbying at the agency of course cannot include monetary donations.

Meanwhile, the next big movement on the net neutrality front depends largely on what happens in the FCC-Comcast case in court now. Judges must decide whether the FCC in 2008 overstepped its bounds in censuring Comcast for blocking certain peer-to-peer traffic. If the court sides with Comcast, FCC Chairman Julius Genachowski may have greater difficulty passing rules that would govern open Internet access.