Today, the U.S. Senate Commerce Committee held a full committee hearing on “The Future of the Internet.” In response, the Hands Off the Internet coalition issued the following statement:

“Chairman Martin’s testimony restored a healthy dose of reality to the debate over network management on the Internet. Today’s new ‘smart network’ technology is one of the best ways to improve Net users’ online experience, including faster and more affordable access while reducing online dangers.

“No question, consumers deserve safeguards to access legal websites and other information. But it’s often overlooked that they already have this protection and as the Chairman’s testimony shows, markets, public opinion, and FCC oversight are working to protect the consumer without the unintended consequences of a massive new regulatory scheme.”

The Hands Off the Internet coalition is a Washington, DC-based coalition of companies and nonprofit organizations that believes the Internet has flourished because government has not tried to regulate it. Members include Alcatel-Lucent, AT&T, Qwest, 3M, the National Association of Manufacturers, FiberControl, and Cinergy Communications. Nonprofit members include Citizens Against Government Waste and the National Black Chamber of Commerce.

According to National Journal, the usual suspects are up in arms about the FCC’s notice of inquiry. Why? Because

the agency’s involvement is a “notice of inquiry” and not a rulemaking. The difference is substantial: Inquiries gather data, while rulemakings consider policy changes.

But why is this a mistake? Everybody agrees that there are no actual problems with net neutrality, and as our own Chris Wolf explained last week, it doesn’t make sense to fashion legislative remedies to situations that don’t actually need remedying. If anything, it just shows that the supporters of net neutrality laws are looking for any avenue possible to impose restrictions on ISPs that would benefit the big online content companies. Whether through the Senate, through the FCC, through the state legislatures, it doesn’t really matter. Any opportunity to regulate the Internet is one they want to pursue.

There is no consensus that we need new rules to govern the Internet, and net neutrality fans should be encouraged that the FCC is looking into it at all, despite their stated skepticism. One imagines that if the FCC ultimately decides that still, no new rules are necessary, the same usual suspects will cry foul then, as they are doing now. That’s one reason it’s so hard to take them seriously.

We were surprised to see TechDirt’s over-the-top reaction to one of our posts this week, “Hands Off the Wireless Spectrum.” If our characterization of their position as “reluctant” was wrong, we apologize. But we have nothing to apologize for in terms of our legitimate and substantive role in this important public policy debate.

Our focus is on the nation’s broadband needs and on the facts. Facts are neither honest nor dishonest — they are the facts — and people can reach their own conclusions over what the facts mean in terms of whether we need new laws on net neutrality. We happen to think we don’t need new laws, because the facts we have been pointing out for some time are these:

• There is no problem to solve. Nobody has shown that there have been any meaningful breaches of basic neutrality on the web. Pro-regulation activists have tried to make case studies out of AOL, Cox and a Canadian telecom firm, and none of those bore out. (This may have something to do with why you never hear about those situations anymore). Broadband providers are committed to a robust, uncensored Internet and also aware of the consumer outcry if they provide anything less.

• Nobody has effectively argued that current laws are insufficient to deal with any possible market abuses that could potentially arise in the future.

• More fathers of the Internet, including Dave Farber and Robert Kahn, have come forward to express their reservations about imposing net neutrality laws than have come forward to support such laws. That is because regulation has the real potential of adverse unintended consequences.

• It is probable and even likely that in the not-too-distant-future, worldwide demand for broadband will exceed existing capacity. A massive new build-out to handle that capacity is needed, and net neutrality would effectively require broadband providers to pass the cost of that build-out on to consumers exclusively.

• The Internet has never been “neutral” in the way that net neutrality activists claim. There is no utopia to return to; the Net has always been a mishmash of “best effort delivery” networks and loose agreements. Having smart networks, which net neutrality regulation would prohibit, will help to rationalize and improve the existing situation.

• In Canada, where a similar debate is occurring, their CTC bureaucracy is so mired in red tape they can’t even remove online death threats against human rights attorney Richard Warman.

• Dorgan-Snowe’s first effect would be to freeze the broadband marketplace exactly where it is, disallowing not just theoretical abuses but new innovations, too.

• The United States ranks 16th worldwide in access to broadband Internet.

• Hands Off the Internet has always endorsed the four principles of net neutrality: Consumers are entitled to access the lawful Internet content of their choice; Consumers are entitled to run applications and use services of their choice, subject to the needs of law enforcement; Consumers are entitled to connect their choice of legal devices that do not harm the network; Consumers are entitled to competition among network providers, application and service providers, and content providers.” We even took out a print ad last year to say so.

TechDirt, maybe we’re not so different. If we agree that the basic ideas of net neutrality are inoffensive but mandating them into law could be a disastrous move, then there’s more to agree on than disagree

Interesting comment from FCC chairman Kevin Martin at his Senate renomination hearing last week:
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“Martin said he did not oppose Google charging more to companies for higher-profile placement on their search engine, and likewise did not opposed a telephone company like Verizon charging more for higher-bandwidth services like streaming video, suggesting that if they could not, they might not be able to afford to provide those services.”

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Martin’s pegged the so-called Net neutrality issue in two ways.� First, there’s no doubt that if Congress passes this, the online giants like Google and Amazon will have a legal loophole to avoid paying for the broadband access they consume.
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But there’s a larger issue too.� Martin’s also right about the inevitable problems of bringing in complex new regulations over something as dynamic as the Internet.� As recent history shows pretty decisively, the Net has a way of humbling companies that make things difficult for consumers.�
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Exhibit A:
Microsoft’s MSN

Exhibit B:
Dell’s “DJ Ditty”, which was supposed to dethrone the iPod.�

Exhibits C, D, E, F & G:
Google’s instant messaging service (Ranked 10th in IM services with just 2 percent of MSN’s users),
Google’s online spreadsheet service (Supposedly a challenger to Yahoo’s leading service, it ranks 40th among financial websites),
Google’s blog search (It generates only about 17 percent of the traffic of Technorati),
Google’s networking site Orkut (It has less than one percent of MySpace’s traffic), and
Google’s email (It has only about a quarter of the users of Yahoo and MSN’s mail service)
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That’s why Net users should heed the warnings from David Farber, Kevin Martin and other independent Internet analysts – an active consumer base is a far cheaper and more effective solution than piles of new government regulation over the Net.

Yes, it was a few weeks ago now, but humor us: We just can’t get enough of that speech by FTC chair Deborah Platt Majoras, where she offered her considered opinion on whether new Internet regulations are necessary. (In sum: Not now.) Here’s one of her best bits:

“While I am sounding cautionary notes about new legislation, let me make clear that if broadband providers engage in anticompetitive conduct, we will not hesitate to act using our existing authority. … But I have to say, thus far, proponents of Net neutrality regulation have not come to us to explain where the market is failing or what anticompetitive conduct we should challenge.”

Got that? There are already government officials that Google, Amazon, Yahoo and their Internet allies could complain to if the telecom industry was acting unfairly.

More proof that they don’t have any serious complaint, they just want a handout. We hope that the Senate, when it reconvenes, takes Ms. Majoras’ thoughts into consideration.

Last week we pointed to a wise Denver Post editorial about the Internet future debate, and now we’d like to point you to cross-town rival the Rocky Mountain News for a great editorial showing how quickly the Internet landscape changes.

Remember a few years ago when TIME had AOL’s CEO on the cover with the headline, “Surprise! AOL Wins”? Some victory. As The News notes, AOL has now lost a third of its subscribers, which has forced the company to give away its formerly $24/month service free.

The last time a company had a victory like that was when Ford introduced the Edsel. But The News uses AOL’s lesson to put the so-called Net neutrality push in its proper context:

“Congress is grappling with ‘net neutrality,’ regulations that would prevent the builders of new high-speed data infrastructure from charging higher rates to the users of this new, super-fast pipeline.

“We have no idea whether investors will endorse the concept of having media companies pay part of the cost of adding new lanes on the information superhighway. But Washington should not foreclose that possibility - just as regulators in most instances should not micromanage a dynamic marketplace that listens and reacts to consumer desires.”

Translation: The Internet is evolving just fine, thank you, and lawmakers have no reason to begin tying it down with red tape and bureaucracy.

Talk about a smoking gun! According to a July 4 Reuters report, Google’s chief evangelist, Vint Cerf told reporters:

“If the legislators … insist on neutrality, we will be happy. If they do not put it in, we will be less happy but then we will have to wait and see whether or not there actually is any abuse .” [our emphasis]

There you have it! For months, we’ve been saying that Congress has no business passing new Internet regulations based on hypothetical fears of some future problem. The inevitable results would be higher legal expenses and a slow-down in investment opportunities.

But the big Internet companies – Google, Amazon, eBay, Microsoft – all denied the need was speculative. They said that there was urgent need for new regulations.

Now the truth is unveiled: After losing last week’s Senate committee vote, Google has conceded that the telecommunications industry has not abused its position, and existing anti-trust laws are getting the job done.

This is a real breakthrough. Will Google and their allies with Save The Internet stop with their theatrics? Guess we’ll just have to wait and see…