The amendment sponsored by Rep. Edward J. Markey of Massachusetts, the ranking Democrat on the House Subcommittee on Telecommunications, was co-sponsored by fellow Democratic Reps. Rick Boucher of Virginia, Anna Eshoo of California and Jay Inslee of Washington.
"The decision made by this panel is backward looking," Markey said in a statement. "Right now we are heading down a dangerous road that will stifle the openness of the Internet, endanger our global competitiveness, and warp the web into a tiered Internet of bandwidth haves and have-nots. This is the introduction of creeping Internet protectionism into the free and open World Wide Web and we need to rise up to stop it."
Squashed by the committee, the provision would have given the Federal Communication Commission the power to prohibit telecom companies and cable operators from favoring one provider's Web traffic or their own content over another's by ensuring faster downloads to companies that pay a tax.
The proposal, Markey hoped, would have been attached to House Commerce Committee Chairman Joe Barton's Communications Opportunity, Promotion and Enhancement Act of 2006.
The telecommunications-reform bill would create a national franchising system vs. local franchises of a city or town. It also gives the FCC authority to ensure Net neutrality, govern municipal broadband networks and set rules for 911 emergency services on Internet telephone services.
Specifically, it would require the FCC to resolve any complaint regarding a violation of the bill within 90 days and raises the penalty limit for a fine to $500,000 per violation.
The bill now moves on for a full House vote, and then on to the Senate, where views are mixed on net neutrality.
Wednesday's vote took place the day after a markup of the COPE legislation Tuesday and signals a blow for proponents of the amendment in the net-neutrality movement.
Leading up to the vote, a coalition of tech companies, small businesses and consumer groups have worried over telecom operators and broadband providers that have indicated the possible creation of a two-lane system that would establish a pay-for-play tier system of premium services, and thus have market power to limit consumer choice in content.
Among those supporters include Internet companies Google, Intel, Yahoo!, Microsoft, Amazon and eBay as well as the National Religious Broadcasters, the American Civil Liberties Union and the "father of the Internet," Vint Cerf.
Others supporters included the bipartisan SavetheInternet.com Coalition comprised of an eclectic selection of groups such as Common Cause, the Gun Owners of America, MoveOn.org, Consumers Union, American Library Association, Parents Television Council and Craig Newmark of Craigslist, among others, who vow to continue rally public support for new neutrality.
According to the coalitions, "in less than one week, the coalition gathered more than 250,000 petition signatures, rallied more than 500 blogs to write about this issue, and flooded Congress with thousands of phone calls."
Telecom companies have said that the provision is unnecessary, saying they would not compromise overall quality service or block access.
And the industry argues that it should be able to charge companies who want it for faster delivery of content especially for VoIP, video over IP and TV over IP services, as companies continue to invest in adding bandwidth and new superfast fiber-optic technologies.
"Today's action brings consumers one step closer to having a real choice in video, allowing them to get the services they want from the companies they choose," said Ed Merlis, senior vice president of government and regulatory affairs of the USTelecom Association. "We congratulate chairman Barton, chairman Upton and congressman Rush and all those on the committee who have worked so hard to further TV freedom for the American consumer. This legislation will also help spur investment and innovation in communities across the nation."