New Draft of House Telecom Bill Breaks Spirit of Bipartisanship

The U.S. House Energy and Commerce Committees subcommittee on telecommunications today continued its push for telecom reform as Republicans offered up a revised draft version of legislation that drew heavy fire from leading Democrats.

Subcommittee chairman Fred Upton (R-Mich.) hailed the second draft of the Broadband Internet Transmission Services (BITS) Act as a bipartisan accomplishment. But Democrats said changes introduced in the second draft represented a serious breach in the bipartisan spirit of negotiations that had prevailed over the past eight months. Ranking minority member of the Energy and Commerce Committee Rep. John Dingell (D-Mich.) said that, based on his reading of the new draft, all the work the Republican and Democratic committee leadership had done to date has vanished into a black hole.

Dingell charged the committee majority with making changes from the first draft that strongly favor one group of stakeholders, namely, the telephone companies, over others. The legitimate interests of cities are not protected, he said, citing reductions in franchise fee payments resulting from collections based solely on subscription revenues without counting advertising and other ancillary revenues. Cities powers over protecting property would also be severely limited, he said.

Statutory requirements for video services, such as must-carry and retransmission consent affecting broadcast programming carriage, program access and compatibility with consumer electronics equipment, were made subject to FCC review and possible elimination under the new draft. The new draft also would subject present ownership restrictions, such as barriers to mergers between cable and telephone companies in the same market, to FCC review and possible elimination.

This last provision was a terrible policy decision, said Rep. Ed Markey (D-Mass.), the ranking minority member on the subcommittee. Overall, he added, the changes represent abandonment of a promising path for what I see as a detour to a likely legislative dead-end.

Republicans acknowledged their hopes for rapid passage of legislation were now somewhat dimmed but insisted they will continue to try to work with Democrats to develop a bipartisan bill. Energy and Commerce Committee chairman Joe Barton (R-Tex.) defended his decision to push for todays hearing on the new draft against Democrats wishes on grounds he needed to move this along. However, he said he doubted his original goal of getting a bill passed this year could be met. We might be able to get a mark-up in the subcommittee this year, he added.

Predictably, telco representatives praised the new draft measure and city representatives scorned it. Marilyn Praisner, a member of the Montgomery City Council in Maryland and representing the National Association of Telecommunications Officers and Advisors, said lower franchise fees and BITS II overall give telcos everything they want while avoiding social obligations. She said cable operators must continue providing community alerts and other such services while telcos would not have to abide by the same rules.

SBC general counsel James Ellis argued cable operators have not had to play by telecom rules while telcos have had to abide by cable regulations. Telecom carriers, he said, must provide services such as unbundling and colocation, while cable providers do not have to provide similar concessions to smaller market players. Let us have the same rules in cable that cable had when it entered telecom, he told the committee.

In a letter to the committee, Internet companies, including Google, Amazon and eBay, said imposing different rules on IP video as opposed to Internet services could lead to discrimination against Web-based content. BITS II says only companies offering standard broadband Internet services would be subject to Internet neutrality rules; broadband video services would not. SBCs Ellis confirmed his company would choose the content its TV subscribers would receive.

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