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Regulatory News – IXCs, Competitive Carriers Relish More ‘Democratic’ Senate

Posted: 08/2001

Regulatory News

IXCs, Competitive Carriers Relish More ‘Democratic’ Senate
By Kim Sunderland

When the Democrats took over the U.S. Senate (www.senate.gov) in the wake of Vermont Sen. Jim Jeffords’ resignation from the Republican Party earlier this summer, the nation’s IXCs and other competitive telecom carriers thanked the senator and their lucky stars.

With new party control, several Senate committee and subcommittee leaders changed, in turn affecting the outcome of legislation facing the competitive telecommunications industry.

The chairmanship of the Senate Commerce Committee
(www.senate.gov/~commerce), for instance, is widely regarded as being the most influential when it comes to telecom regulation. With Jeffords’ move, the leadership went from being in the hands of Sen. John McCain (R-Ariz.) to pro-

competitive ally Ernest F. “Fritz” Hollings

(D-S.C.).

While the committee traditionally has operated on a bipartisan basis on many issues, Hollings will tip that scale to benefit the competitive carriers in telecom.

First, Hollings isn’t on board with the deregulatory approach embraced by FCC Chairman Michael K. Powell (www.fcc.gov), particularly regarding ownership issues in the United States and abroad. Second, the senator for years has steadfastly sought to force the BOCs to open their local markets to competition.

U.S. Senate Committees/Subcommittees Change Hands
(Committees with Varying Degrees of Telecom Interest)

Senate Committee Expected New Chairman Old Chairman
Commerce, Science

& Transportation

Ernest F. Hollings (D-S.C.) John McCain (R-Ariz.)
Finance Max Baucus (D-Mont.) Charles E. Grassley (R-Iowa)
Foreign Relations international

policy subcommittee

Paul S. Sarbanes (D-Md.) Chuck Hagel (R-Neb.)
Judiciary Patrick J. Leahy (D-Vt.) Orrin G. Hatch. (R-Utah) and
Strom Thurmond (R-S.C.)
Judiciary antitrust subcommittee Herbert H. Kohl (D-Wis.) Mike DeWine (R-Ohio)

Compiled by PHONE+ Magazine (www.phoneplusmag.com)

Powell doesn’t expect the shift in Senate leadership to affect the FCC, despite Senate control over commissioner confirmations and the agency’s budget. But Hollings’ recent statements suggest otherwise.

In mid-June, the Senate Commerce Committee held a hearing on local phone competition and HR 1542, the “Tauzin-Dingell” bill. The legislation, sponsored by House Commerce Committee Chairman W.J. “Billy” Tauzin (R-La.), and ranking Democrat John Dingell of Michigan, would make it easier for the four Bell companies to carry Internet traffic long-distance within their regions. The proposed bill essentially would allow the Bells to sidestep key provisions of the Telecommunications Act of 1996 that require them to open their local phone markets to competition before they provide long-distance voice or data services.

Several senators and witnesses during the hearing criticized the Bell companies for failing to comply with the network opening requirements of the Telecom Act, and Sen. Hollings bluntly stated that the interLATA data relief provisions of HR 1542 are “the biggest bunch of nonsense I have ever heard of.”

“The fact is that Congress should not help the Bells extend their monopolies” to high-speed Internet access, Hollings said, adding that HR 1542 has no chance of passing in the Senate.

“Tell our friend Billy [Tauzin] that the tread has come off,” Hollings said during the hearing.

The senator also has heard competitors’ pleas regarding structural separation, saying he plans to introduce legislation that would force the BOCs to separate their retail and wholesale operations into two distinct companies.

Such a proposal will receive strong support from competitive carriers, which already are lobbying numerous state commissions to force structural separation of the BOCs.

Sen. Hollings also recently criticized the BOCs for repeatedly challenging the constitutionality of Sec. 271 of the Telecom Act, which stipulates that the BOCs satisfy the FCC that they have opened their local networks to competitors by complying with a 14-point checklist before they can offer interLATA long-distance services.

Hollings said before the 1996 act became law, the Bells participated in its drafting and knew of its contents. But still, he said, the Bells challenged Sec. 271 in court. He obviously wasn’t happy with that strategy and wanted the Bells to know it.

Other Changes in the Senate

Regarding budgetary matters in the Senate, Max Baucus (D-Mont.), now chairman of the Senate Finance Committee
www.senate.gov/~finance), has said his goal is bipartisanship. He’s likely to put aside designing a new trade bill to focus on a prescription drug benefit.

That’s good news for telecom competitors, since the senator supported the current administration’s efforts to seek fast-track negotiating authority for trade deals. The bad news is that the Republicans still have more members on this committee than do the Democrats.

Leadership of the International Economic Policy, Export and Trade Promotion Subcommittee of the Senate Foreign Relations Committee
(www.senate.gov/~foreign) now belongs to Paul S. Sarbanes (D-Md.). As one of the Democratic Party’s more liberal senators, he does have a record of working with Republicans, but he’s also a staunch supporter of consumer protection measures.

Patrick J. Leahy (D-Vt.) is now chairman of the Judiciary Committee
(www.senate.gov/~judiciary), which oversees judicial nominees. Another fierce liberal, Leahy is expected to oppose any major conservative nominees to federal courts, an important issue since the U.S. Supreme Court will soon see several judges retiring.

Meanwhile, Herbert H. Kohl (D-Wis.) takes over leadership of Judiciary’s antitrust subcommittee.

Overall, the changes in the Senate won’t affect the House, say GOP members, who vow to serve as the bastion for President Bush’s agenda.

But Wall Street analysts and Washington pundits say the leadership realignment in the Senate, which, before the changing of the guard was at virtual parity, bodes well for Democrats, who must grab the bull by the horns to make a substantial impact this year. These same sources likewise say that competitive telecom carriers should also heed that call.


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