http://www.savetheinternet.com

Back in the old days -- say, three years ago -- most Americans were satisfied to dial up an Internet service provider to check their e-mail or look up recipes.

But today, the great majority have high-speed Internet access and want to do much more, such as exchange video clips, play interactive games, make phone calls, teleconference and download movies.

Broadband providers say these new demands are taxing the Internet's aging infrastructure. To keep pace, companies must spend billions to upgrade networks and run fiber-optic cable into homes.

But who will pay for this makeover? Broadband subscribers? Phone and cable company shareholders? The Internet-based companies that offer customers advanced Web sites and services?

That question is the most contentious aspect of a telecommunications reform bill before Congress.

The lawmakers are battling over an issue with the confusing label of "Net neutrality," but the real buzzword to remember is money -- who has it, who needs it and how Congress can help steer it to help improve the Internet.

"There are billions of dollars at stake here," said Mark Levine, a partner of Core Capital Partners, a Washington-based firm that often invests in telecom-related companies.

The phone and cable companies want to get some of those billions from wealthy Internet-based companies, such as Google Inc. and eBay Inc., in exchange for providing faster delivery of their content.

Opponents say such charges would forever change the open nature of the Internet, where network operators always have handled content the same, whether it comes from Google or a tiny startup. They want Congress to block phone and cable companies from setting up premium delivery service for some content.

The issue largely splits along partisan lines, with Republicans siding with phone and cable companies. But enough Republicans support Net neutrality to make it hard for Congress to pass legislation this year.

Levine said that if Congress stalls, companies will come up with compromises.

"At the end of the day, you'll end up with some kind of negotiated settlement, probably with the (Federal Communications Commission) getting involved in some way," he said. "There needs to be a solution."

Here's how the problem looks to the phone and cable companies, including Cox Communications Inc., a cable operator and a corporate relative of the Austin American-Statesman:

The Internet must be upgraded to accommodate consumers' rapidly changing demands. As recently as 2003, most home computer users reached the Internet via phone lines. But today, 72 percent get broadband service through TV cables or phone companies' digital subscriber lines, according to Nielsen/NetRat- ings, a research firm.

While the roughly 103 million home broadband users want more advanced Web services, they might be reluctant to spend more than they do now, typically $40 or $50 a month. Raising subscription prices would also discourage many of the more than 200 million other Americans from ever going online or upgrading from dial-up service.

The companies also say it is unrealistic to ask their shareholders to absorb the costs. While stock prices have soared for many Internet-based companies, they have languished for phone and cable companies because of weak earnings.

At a Senate hearing last month, AT&T Inc. Chairman Ed Whitacre was adamant about the need to spread costs.

"This Internet is growing, and it's growing at an astounding rate," he said. "Somebody has to pay for that."

Congress "cannot expect any company, my company or anyone else, to pour in these billions of dollars that are required without some return," he said.

To boost return, network operators must impose fees for premium service, he argues. Under that scenario, if Google were to pay up, then its videos would download more quickly than, say, those from YouTube Inc.

Opponents think such arrangements would lead not to a better Internet but a divided one. Big companies that could afford to pay would flourish, while startups and nonprofit groups would get stuck on the networks' dirt roads, where the pace is slow.

During a recent teleconference featuring Net neutrality supporters, Paul Misener, Amazon.com's vice president of global public policy, said network operators already have a mechanism for extracting payments from Internet-based companies.

"We pay handsomely to connect our servers to the Internet and we do so based on the capacity we use," he said. "Moreover, consumers are paying. They're paying for their connection to Internet content, and it matters not from where the content comes. The consumers have already paid for it, and so if they choose to get it from one site or another, that is their prerogative."

In June, the House passed its version of telecom reform, which includes Net neutrality provisions that are regarded as weak because they merely require the FCC to monitor the issue.

Recently, the Senate Commerce Committee tackled the Net neutrality issue as it crafted a broader telecom bill. Sen. Olympia Snowe, R-Maine, sided with Democrats in supporting an amendment guaranteeing Net neutrality, but the amendment failed to pass when the vote tied.

The bill will go to the Senate floor this fall. More>>>

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