Telco-dereg bill hits the Senate

Just when it seemed the hoopla about the Tauzin-Dingell bill was over, Sens. John Breaux (D-La.) and Don Nickles (R-Okla.) introduced legislation in the Senate last week that revives the entire debate.

Called the "Broadband Regulatory Parity Act of 2002," the bill would require the FCC, within 120 days of the bill's passage, to write rules that would regulate all broadband services equally.

Asked whether he would be able to do that, FCC Chairman Michael Powell on Tuesday said laughingly: "I don't know. If I had to, I might negotiate for more time."

After a highly public debate, waged through TV and radio spots, the House last February passed legislation pushed by Reps. Billy Tauzin (R-La.) and John Dingell (D-Mich.). It would allow incumbent phone companies to offer broadband services over long distances so that they can compete fairly with cable, which controls nearly 70% of the broadband market.

The Senate hasn't been nearly as enthusiastic about the idea. Sen. Sam Brownback (R-Kan.) has long been an advocate of passing a bill to deregulate the Bells, but his legislation hasn't gained much traction. Brownback and Sens. Max Cleland (D-Ga.), Zell Miller (D-Ga.) and Kay Bailey Hutchison (R-Texas) are co-sponsoring the Breaux-Nickles bill.

The bill's main opponent is likely to be Senate Commerce Committee Chairman Fritz Hollings (D-S.C.), who objects on principle to deregulating the incumbent phone companies. But Hollings remains open, says spokesman Andy Davis: "Sen. Hollings knows the committee is interested in this issue, so he's willing to look at it."

With the support of Senate leaders Breaux and Nickles, the bill may be able to make more progress than similar efforts have in the past. At least, that is the hope of the phone companies, which flooded fax machines and e-mail accounts with supportive press releases last week.

"Verizon vigorously supports the bipartisan bill introduced today by John Breaux and Don Nickles," said Tom Tauke, senior vice president for public policy and external affairs at Verizon. "Consumers everywhere want faster and higher-quality Internet services. Current regulatory barriers stand in the way of delivering those services to all Americans. This bill, which represents regulatory fairness, would clear away the roadblocks that inhibit investment and pave the way for vigorous competition on the information superhighway."

Said Walter McCormick, president and CEO of the U.S. Telecom Association, "By establishing a technology-neutral national broadband policy, the Breaux-Nickles bill furthers the pro-competition goals Congress set forth in the '96 Telecommunications Act and makes them applicable to the Internet."

As expected, long-distance companies and competitive local exchange carriers came out against the measure.

"Sen. Breaux's 'parity' bill has the right title but is wrong on the substance," said John Windhausen, president of the Association of Local Telecommunications Services, which represents competitive local phone companies. "The bill would eliminate the Bell companies' unbundling obligations for broadband, data and voice because all these services are carried on the same network. As a result, this bill would reduce consumer choice and create a deregulated monopoly or duopoly over all local telecom services."

An AT&T spokesman said, "We have a great deal of respect for Senator Breaux. Unfortunately, the bill he has introduced would be a sledgehammer blow to a telecom industry that is already reeling. With Tauzin-Dingell on life support in the Senate, the Bell monopolies have now spawned this bill aimed at reviving it."

AT&T has been one of the strongest opponents of Tauzin-Dingell, objecting to any deregulation of its Bell-company competitors before they have opened their local markets to competition as the law requires.

The cable industry, represented by the National Cable & Telecommunications Association, took a non-committal approach. "NCTA believes that market-based competition is the best way to ensure that broadband services are made available to all Americans. We appreciate and share Senator Breaux's view that increased regulation of cable-provided Internet services is not the way to advance broadband deployment," said spokesman Marc Smith. "NCTA has not taken a position on the Breaux bill nor had the opportunity yet to review it with our members."

NCTA has maintained a policy of uninvolvement all through the often heated debate on Capitol Hill over broadband deregulation.

Sens. Brownback and Conrad Burns (R-Mont.) told a conference at the U.S. Chamber of Commerce in Washington last week that they expect some form of broadband legislation to pass this year.

Contributing editor Paige Albiniak has been covering the business of television for nearly 25 years. She is a longtime contributor to Next TV, Broadcasting + Cable and Multichannel News. She concurrently serves as editorial director for entertainment marketing association Promax. She has written for such publications as TVNewsCheck, The New York Post, Variety, CBS Watch and more. Albiniak was B+C’s Los Angeles bureau chief from September 2002 to 2004, and an associate editor covering Congress and lobbying for the magazine in Washington, D.C., from January 1997-September 2002.