The top Web companies are going to have to live to fight another day in Washington.
Congress last week rejected a measure aimed at prohibiting Internet service providers from selling differing levels of access to their networks. A similar bill that mandates what's known as Net neutrality is expected to fail in the Senate.
For Web companies, the defeat comes on an issue that they say is hugely important. Companies like
and Barry Diller's
have argued that without Net neutrality mandated by law, Internet service providers could provide preferential treatment to Web sites that pay fees, and leave users who don't with slower access.
Opponents of Net neutrality -- including the politically well-connected telecommunications and cable industries, such as
, have argued that such fears are groundless.
The Web companies pulled out all the stops to win congressional support. Google co-founder Sergey Brin even traveled to Washington to personally lobby members of Congress.
CEO Meg Whitman urged users to show their support for net neutrality to members of Congress.
"It is hard to believe, but lawmakers in Washington are debating whether consumers should be free to use the Internet as they want in the future," the largest Internet auction site says on its Web site. "The phone and cable companies are using their political muscle to promote legislation that would divide the Internet into a two-tiered system -- a 'Pay to Play' tier for large companies that can afford the fees and a slow lane for everyone else."
Google, eBay, Yahoo! and
even formed a coalition with the dramatic-sounding name
Save Our Internet to press their case.
Joining the cause of the Web companies was the liberal advocacy group
MoveOn.org and a group of musicians including the rock group REM, country singers the Dixie Chicks and rapper Q-Tip.
"The emotional appeal of the Net-neutrality advocates has been powerful," says Wayne Crews, vice president at the Competitive Enterprise Institute, which opposes net neutrality and receives funding from companies on both sides of the issue. "There is some reluctance to say that government should set up a regulatory regime."
Opposing the Web companies was the equally dramatically named
Hands Off the Internet, whose members include well-connected companies with deep pockets of their own, such as
and the powerful National Manufacturers Association.
Of course, they viewed the defeat of the Net-neutrality bill differently.
"Regulation supporters were pushing scare tactics more appropriate to the current remake of 'The Omen' than a debate over the Internet," the group says on its blog.
If Web companies expect to prevail, they are going to need lots of patience, according to a top telecommunications expert.
"It's one inning in one game in a series," says Blair Levin, a telecommunications analyst with Stifel Nicolaus in Washington, who is a former official with the Federal Communications Commission. "I am looking forward to writing pieces about it until 2012."