Henry Waxman has been trying to enshrine the terrible compromise promulgated by Google and Verizon into law, by pushing a truly terrible bill on broadband that strips the FCC of rulemaking and classification ability, and gives wireless Internet providers carte blanche to discriminate in favor of their products.

The FCC will not have rulemaking authority under a network neutrality bill that key House Democrats plan to introduce soon, according to a recent draft obtained by Tech Daily Dose.

Instead, the commission will deal with enforcement on a case-by-case basis. Broadband providers who violate the law will face a maximum penalty of $2 million by the FCC, under the bill.

A $2 million dollar penalty? Might as well roll that back to $0, you’d have about as much of a chance to deter telecoms from doing their best to maxmize profits for themselves and their partners through rulebreaking.

The FCC would not be able to reclassify broadband under Title II of the Communications Act, which three commissioners on the five-member panel have publicly expressed a preference for in the past. The FCC would get to ask nicely to the House and Senate Commerce Committees for additional authority to implement the National Broadband Plan, also at risk under current broadband classification, which was put into place under the Bush Administration.

The Waxman bill again treats “wireline” and “wireless” broadband differently, even though the only difference is that the growth and the future of the Internet lies entirely in wireless. While wireline net neutrality would get enshrined into the law, no such restrictions would be bestowed upon wireless broadband. Here’s the relevant section of the draft:

“(b) DUTIES OF WIRELESS PROVIDERS.— A person engaged in the provision of broadband Internet access service by radio, insofar as such person is so engaged—

“(1) shall not block consumers from accessing lawful Internet websites, subject to
reasonable network management;

“(2) shall not block lawful applications that compete with the provider’s voice or
video communications services in which the provider has an attributable interest, subject
to reasonable network management; and

“(3) shall disclose with regard to its wireless broadband Internet access services
the same information required of wireline broadband Internet access service by paragraph 12(a)(3).

This mirrors the Google-Verizon deal. It allows blocking over wireless broadband any peer-to-peer activity or even applications, and merely forces “transparency” rather than a ban on discrimination of lawful traffic. An unnamed source in the National Journal story gets this right: “This bill represents a giant retreat by some of those who claim to support net neutrality and sends the wrong signal to the FCC who will ultimately deal with this issue.”

Interestingly, the draft proposal has a sunset at the end of 2012. That’s probably a good idea with all Internet-related legislation, given the fast pace of innovation. But it means that the FCC wouldn’t be able to do anything on reclassification until the next election, and I think the timing is pretty profound.

This could move through the House and Senate in a lame duck session. The telecom lobby is one of the most powerful on Capitol Hill, and the content providers perhaps even bigger.