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Tauke Says Telecom Bill Needs Stripping-Down

Verizon Executive VP Tom Tauke told reporters in Washington Tuesday that he believed the best chance for passage of a video franchise reform bill would be a stripped down version that deals with only that issue and expanding the Universal Service Fund (USF).

Currently, a house version is confined to video reform while a Senate version contains numerous provisions including USF, cable conversion of a digital signal, use of unlicensed wireless devices in the broadcast band and more.

"I think the best chance of getting legislation through in this Congress would be to have a streamlined bill," said Tauke, himself a former legislator. "The more things you put in the bill," he said, "the harder it is to get through the process."

"The clock clearly is working against us," said Tauke. He said he thought the House version could be moved through. The House bill has passed in committee and is awaiting a floor vote, which will apparently not be this week. The Senate version is a draft and will not get a committee vote until June.

"The question is whether a Senate vote will be able to move this year," he said.

USF is the fund that underwrites telecommunications service to rural and poorer communities. Senator Ted Stevens, chairman of the Senate Commerce Committee, is from the very rural state of Alaska and has indicated that expanding the USF fund and applying it to Internet as well as phone service is nonnegotiable in the telecommunications reform bill that is scheduled to be marked up in his committee next month.

Though Stevens wants USF reform and Joe Barton, chairman of the House Commerce Committee does not, Tauke said the USF issue was "not a matter of religion, but a matter of money," calling it a "perfectly compromisable" issue.

What if a bill doesn't pass? Takue said Verizon would continue to secure local and state franchises for its FiOS. He said he expects a couple more states to adopt statewide franchising by the end of the year--Texas, virginia, Indiana and Kansas have already done so--and said he expects eight or nine final votes in the next two weeks on local franchises.

"We can make good progress that way, it's just that it is a long and cumbersone process."

In a speech to a Broadband Policy Summit in Washington, Tauke took aim at "network neutrality," which is the push by some in Congress, primarily Democrats, for tough language that insures networks cannot discriminate in the provision of broadband service.

Tauke said that his company supported the general principles of connectivity, but that some discrimination is necessary and has been going on for two decades. On virtual private networks (VPNs), for example, a hospital or bank get service guarantees and secure services that cannot be ensured over the public Internet. "The hopspital that wants to provide home health monitoring for a heart patient is not going to rely on the Internet," he said.

Those VPNs are business-to-business services, but he said Verizon is talking with "everybody," including studios, about setting up similar services for business-to-consumer uses, like video delivery.

That brought Tauke back to the issue of discrimination, as well as "stripping down."
"If we were going to do something with Disney," he asked, "does that mean we are going to provide the same services to a Hustler channel? We may want some differentiation or discrimination. This becomes a big issue when it comes to wireless. Some of the legislative proposals not only apply it to wireline but to wireless."

Tauke said wireless companies deal with the content control issue by discriminating. "When we look at video downloads on cell phones," he said "if you allow Slingboxes to be connected to every cell phone it will shut down the towers and the networks. There isn't enough capacity."
Tauke would be happy if network neutrality were not addressed in the telecom bills. But if they were he preferred the Senate version, which only calls for an FCC study of the issue. The House version adopts the FCC's general principles on connectivity.
But he said Verizon would be willing to work with the high-tech industry on a compromise on the issue of network neutrality. "I think that is feasible," he said.