SENSENBRENNER SAYS DEREGULATION WILL LEAD TO LOCAL, WEB MONOPOLY
Lifting restrictions on ability of Bell companies to provide data services across in-region, interLATA boundaries “would mean that in addition to the local phone markets, the Baby Bells could also monopolize the long distance broadband market,” House Judiciary Committee Chmn. Sensenbrenner (R-Wis.) said Mon. in his weekly Web column. USTA blasted Sensenbrenner’s comment, citing FCC statistics that indicated CLEC local phone market penetration was increasing. USTA also said data deregulation would hasten expansion of Internet services in underserved area, and urged Congress to allow telcos to compete for slice of high-speed Internet market under same terms as cable industry.
Sensenbrenner vowed to fight “to ensure that Congress passes fair legislation,” referring to competing bills that either would free Bells from interLATA data service regulation or subject them to additional antitrust scrutiny from Dept. of Justice (D0J).
Sensenbrenner said cable companies “control 75% of the broadband market,” issue typically raised by supporters of deregulatory bill (HR-1542) by House Commerce Committee Chmn. Tauzin (R-La.) and ranking Democrat Dingell (Mich.). However, just because “cable companies such as AOL Time Warner” have larger share of Internet customers doesn’t justify exempting Bells from market-opening provisions of Telecom Act, Sensenbrenner said: “A few years ago, the [Act] established rules that forced the Baby Bells to open up their local phone markets, or pay fines. They have not done so -- choosing instead to pay the fines.”
Judiciary Committee recently marked up Tauzin-Dingell bill with “unfavorable referral,” while approving Sensenbrenner amendment that would shift final say in telecom antitrust matters to Justice from FCC (CD June 14 p2). Panel also rejected alternative standalone bill (HR-2120) by Rep. Cannon (R-Utah) that was nearly identical to Sensenbrenner measure.
High-speed Internet market is “an emerging market” that requires “full-fledged market competition” to bring affordable and reliable services to residential consumers, USTA spokeswoman said. Allowing telcos to compete on level playing field -- similar to how Congress declined to impose burdensome regulations on now- flourishing wireless industry -- will stimulate competition and bring Internet service to underserved areas, she said.
USTA also disputed Sensenbrenner’s assertion that local phone companies weren’t opening their markets to competition: “According to the FCC, CLECs now serve 8.5% of access lines, and 88% of U.S. households reside in Zip codes that are served by at least one CLEC. This would not be possible if local phone companies hadn’t opened their networks to competitors.” Spokeswoman also said “CLECs are making even greater inroads” in states where Bell companies are authorized to offer in-region interLATA services. “In New York, CLECs have 20% market share. In Texas, they have 12%.”