Washington, DC, May 22, 2006--The National Retail Federation today welcomed introduction of a House bill that would require “net neutrality” among companies providing Internet service, and urged a Senate committee to include a similar requirement in telecommunications legislation currently being drafted.
“Online and multichannel retailers have spent the past decade revolutionizing the way Americans shop by giving each and every consumer greater access to a wide variety of goods and services at highly competitive prices,” NRF senior vice president for government relations Steve Pfister said in a letter to House Judiciary Committee chairman James Sensenbrenner, R-Wisc., and ranking member John Conyers, D-Mich. “Because of the importance of this medium to the retail industry, NRF hopes that the Internet will remain an open highway of commerce. Recent interest in a system of tiered Internet usage as expressed by major telecommunications companies threatens to eliminate network neutrality, forcing the Internet into a system more like cable TV where retailers and other content providers would have to pay for the best access to consumers.”
“Without specific protections, the Internet could become a ‘pay to play’ communications medium, stifling growth and eliminating now-robust competition in the retail space,” Pfister said. “Further, if large telecommunications and cable companies begin to restrict the amount of content that users can readily access, it could lessen the overall value of the Internet for American consumers.”
Sensenbrenner on Thursday introduced H.R. 5417, the Internet Freedom and Nondiscrimination Act of 2006. The measure would amend the Clayton Act federal antitrust law to require that network providers interconnect with the facilities of other network providers on a “reasonable and nondiscriminatory basis.” Providers would have to operate their networks in a nondiscriminatory manner providing non-affiliated providers of content, services and applications with an equal opportunity to reach customers. Network operators would not be allowed to interfere with users’ ability to choose the lawful content, services and applications they want to use. The companies would still have the ability to manage their networks, offer consumers different tiers of service and earn compensation from users of the network.
NRF also wrote to Senate Commerce, Science and Transportation Committee chairman Ted Stevens, R-Alaska, and ranking member Daniel Inouye, D-Hawaii. The committee on Thursday held its first hearing on telecommunications legislation introduced by Stevens. The Stevens bill requires the Federal Communications Committee to conduct annual studies of how market conditions impact the free flow of information but stops short of requiring net neutrality.
“As the Commerce Committee moves to consider its version of a comprehensive telecom bill, we hope that the principle of net neutrality will be included,” Pfister wrote.
In both letters, Pfister noted that the growth of online retailing in recent years has outpaced that of brick-and-mortar stores. The latest State of Retailing Online study conducted by Forester Research for NRF’s Shop.org division found that online retailers had 2004 sales of $141 billion, up 24 percent over the prior year. Online sales now account for 6.5 percent of all retail sales and the total was projected to grow 22 percent to $172 billion in 2005.
