article

Broadband Bills Turn Roadkill

Posted: 12/1999

Regulatory News

Broadband Bills Turn Roadkill
By Kim Sunderland

"Dead on the highway" pretty much sums up the prospects for broadband
legislation being enacted in 1999 on Capitol Hill. Five broadband-related bills were
introduced in Congress this year, all aimed at making the lives of the incumbent local
exchange carriers (ILECs) a little easier by, for instance, removing unbundling
requirements, instituting in-region long distance data relief and eradicating federal and
state pricing measures. So, as the 106th Congress winds down and attempts to clear its
agenda of more pressing matters, the existing bills will have to wait for resurrection
next year.

"Broadband legislation probably won’t come to a vote this year," says one
telecom attorney on Capitol Hill. "But it’s expected to move in 2000 with renewed
effort."

House Commerce Committee Chairman Thomas J. Bliley Jr. (R-Va.) cast doubt on broadband
legislation moving through Congress this year. Bliley has been preoccupied with other
pressing matters, such as the San Antonio-based SBC Communications Inc.-Ameritech Corp.,
Hoffman Estates, Ill., merger. More than once he’s requested information on the
now-approved union from the Federal Communications Commission (FCC) in an effort to
determine the FCC’s process of review. Bliley also, along with Rep. W.J. "Billy"
Tauzin (R-La.), has introduced a bill that would give consumers more information about
"all the hidden taxes in their monthly phone bills," Bliley says.

Likewise, Tauzin has said that legislation aimed at spurring the deployment of
high-speed Internet services by granting the Bell companies various degrees of regulatory
relief is "not likely to pass soon." Tauzin himself is the sponsor of H.R. 2420,
which has 98 co-sponsors, including Democrat Rep. John D. Dingell of Michigan. Generally,
the Internet Freedom and Broadband Deployment Act of 1999 amends the Communications Act of
1934 to define "high-speed data service" as a service capable of transmitting
electronic information at a rate generally not less than 384 kilobits per second (kbps) in
at least one direction. It also would all but eliminate Section 251 unbundling
requirements, although the ILECs must provide unbundled loops and collocation to Internet
service providers (ISPs).

H.R. 2420 also would prohibit the FCC and each state from regulating the rates,
charges, terms or conditions for, or entry into the provision of any high-speed data
service or Internet access service, or to regulate the facilities used in the provision of
such service. The proposal also would prohibit the FCC from requiring an ILEC to:

  • provide unbundled access to any network elements used in the provision of any high-speed
    data service; or
  • offer for resale at wholesale rates any high-speed data service.

A delay on this broadband bill doesn’t bother the Telecommunications Resellers
Association (TRA). Most of the 700 members of TRA are small carriers and resellers who
were "very troubled by the legislation," says Ernest B. Kelly III, president of
TRA. Kelly says that these businesses have been able to thrive under the resale and
unbundling provisions of the Telecom Act, and taking them away "would deny small
carriers the opportunity to compete in the provision of broadband services and deprive
consumers of a vigorously competitive marketplace."

"Three years of RBOC (regional Bell operating company) litigation and
non-compliance with the Act is what is standing in the way of the relief this legislation
seeks to provide," Kelly says. "We strongly encourage Congress not to reward
anti-competitive behavior with a rewrite of the ground rules under which the incumbent
LECs must operate."

In addition to the Tauzin/Dingell legislation, also languishing on the House side are
the Goodlatte/Boucher (H.R. 1685 and H.R. 1686) bills, which also would make Section 251
unbundling/resale requirements inapplicable to the ILECs. The proposals–sponsored by
Reps. Bob Goodlatte (R-Va.) and Rick Boucher (D-Va.)–also would require cable open access
and give in-region, interLATA (local access and transport area) relief to the Bells. As of
late October, there had been no floor actions on either bill.

On the Senate side, Sen. Sam Brownback, (R-Kan.), introduced S. 877, which proposes,
among other things, that Section 251 unbundling and resale requirements don’t apply to the
ILECs once 70 percent of their loops are digital subscriber line (DSL) capable. Republican
Sen. John McCain of Arizona this year introduced S. 1043 in which there would be no FCC
regulation of Internet services, as well as making Section 251 unbundling and resale
requirements inapplicable. Both bills have been referred to the Commerce Committee, which
McCain chairs, but as of October, there also hadn’t been any floor actions taken on them.

A spokeswoman for McCain said floor action isn’t expected on either broadband
legislation in the Commerce Committee. "We may have to pick them up again in
January," she said.

Broadband legislation could end up being a non-issue in Congress during 2000 if the FCC
grants a Section 271 application for a Bell to provide in-region long distance service.
"If a Section 271 is granted," one telecom source says, "the argument for
broadband legislation is moot because all a Bell would have to do now to provide interLATA
data is meet the 14-point competitive checklist in 271. That’s it."

The competitive marketplace for broadband services benefits consumers and government
regulation would hurt consumers’ interests, according to a report released by the FCC in
October.

Written by the staff of the Cable Services Bureau, the report concludes that "the
broadband industry is in its infancy and regulatory restraint continues to be warranted at
this time." The report says that competition is emerging for broadband Internet
services, and imposing government regulations now would hurt consumers. The staff found
that the deployment of cable modems has spurred the development and use of alternative
technologies, such as DSL. Other findings include:

  • Regulation or threat of regulation ultimately slows deployment of broadband.
  • Market forces will compel cable companies to negotiate access agreements with
    unaffiliated ISPs, preventing cable companies from keeping systems closed and proprietary.
  • If market forces fail and cable becomes the dominant means of Internet access,
    regulation then might be necessary to promote competition.
  • Rapid nationwide broadband deployment depends on a national policy.

The report acknowledged the risks associated with regulatory restraint, such as the
threat of a cable monopoly of broadband, the creation of an irreversibly closed system and
the threat of inconsistent local regulation. Should any of these risks become reality,
then action would have to be taken, the staff said.


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