HILL SEES INTENSE LOBBYING AS TAUZIN-DINGELL VOTE APPROACHES

Capitol Hill was awash with lobbyists Mon. as supporters and opponents of data deregulation Tauzin-Dingell (HR-1542) bill prepared for House floor debate beginning Wed. Along with visits to House members and staff, advocacy groups flooded Hill with letters and released still more reports arguing why bill would either boost competition in broadband or cripple it. Despite flurry of lobbying, most observers viewed bill’s passage in House as foregone conclusion, in part because wavering members felt safe in voting for it knowing that Senate Commerce Committee Chmn. Hollings (D- S.C.) had no intention of letting it advance in Senate. At NAB conference Mon., bill’s chief sponsor, House Commerce Committee Chmn. Tauzin (R-La.), predicted victory in House, “then a fight in the Senate, as you know” (see separate story).

Fact that even successful passage could be end of road for bill sponsored by Tauzin and ranking Democrat Dingell (Mich.) wasn’t enough reassurance for some lobbyists opposed to bill. American ISP Assn. Pres. Sue Ashdown wrote each member of Congress Mon. emphasizing that vote would be important because “the FCC will be watching,” even if “this bill only passes the House and not the Senate.” In light of FCC’s recent issuance of notice of proposed rulemaking on broadband, Ashdown said she wanted Commission to hear from Congress that it “values these small ISPs.” Not all ISP groups oppose bill, however. U.S. Internet Industry Assn. Pres. David McClure repeated his argument that Sec. 5 of Tauzin-Dingell would be boon to ISPs because it would require Bell companies to ensure that consumer could use any ISP: “Our goal for the past year has been to effect passage of open access in legislation, and HR-1542 is the only vehicle we have in play to do so.” He said he hoped FCC would see inequity of placing that requirement on Bells and seek to also place open access on cable systems “for regulatory parity.” McClure’s take on FCC rulemaking is that if it reclassifies ISPs as information services they'll lose their mandated access to telephony networks: “In a matter of months, we could lose the access that 4,000 independent ISPs need in order to survive.”

Freedom of choice with ISPs “means nothing for Internet users if ISPs can’t connect,” Ashdown replied in report she distributed on Capitol Hill Mon. called Why Exactly Is HR- 1542 So Bad for America’s Internet Providers and Their Consumers? Provisions of Sec. 5 (which would amend Part 1 of Title II of the Communications Act as Sec. 233) supported by McClure will need to be enforced, she argued. But another part of bill, Sec. 232(a), states that neither FCC nor any state “shall have the authority to regulate 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 either such service.” Ashdown contended that if Bell refused to permit another ISP to interconnect under Sec. 233, or said such facilities didn’t exist or chose to charge exorbitant rate, nothing could be done as Bells would be free from any oversight.

Regulatory Preemption at Issue

States fought not to lose their regulatory oversight. Five groups -- National Governors Assn., Council of State Govts., National League of Cities, National Assn. of Counties and International City/County Management Assn. -- Fri. co-wrote letter to House Speaker Hastert (R-Ill.) and House Minority Leader Gephardt (D-Mo.) arguing that Tauzin- Dingell “will interfere with and preempt the traditional and legal rights of state and local governments.” State leaders took issue with contention in HR-1542 that state and local regulations had “impeded the rapid delivery of high-speed Internet access services to the public.” Rather, they said, local and state regulators’ century-long experience in regulating phone lines not only helps them recognize importance of broadband but makes them best equipped to identify underserved areas and target them. IXC-CLEC coalition Voices for Choices backed state and local groups, calling it “unconscionable that Congress would also remove [oversight] from state and local officials thousands of miles from Washington.”

Bells were not silent in debate, however. Study released Mon. that was partly underwritten by Verizon argued that construction of national broadband network would create more than 1.2 million new jobs. New Millennium Research Council (NMRC) study, Building a Nationwide Broadband Network: Speeding Job Growth, delineated 3 distinct areas of job creation: (1) 166,000 direct jobs for labor associated with deploying and maintaining broadband investment. (2) 71,700 direct jobs for labor associated with manufacturing infrastructure components and customer-premises equipment. (3) 974,000 indirect jobs for labor associated with creating services and applications, including ancillary industries that would result once network was deployed. Steve Pociask, TeleNomic Research pres. and author of study, said policy changes would spur telecom companies to make expensive investments for new network, which could include “passive optical network” that brought fiber optics as close to consumer as possible. Cost of building this type of network could range from $270 billion to $416 billion, study said.

CWA continued pitch for bill. Both CWA and USTA have resumed their ad campaign for bill, while CWA Pres. Morton Bahr sent letter to House members Mon. arguing that it “would boost the high-tech economy and create hundreds of jobs.” He sent members yet another study, Advanced Services, Enhanced Lives by Alliance for Public Technology that outlined many health and social benefits it said could come from broadband, and called Tauzin-Dingell “essential” to spurring broadband deployment. One thing all sides agreed on was that Tauzin- Dingell would help Bells compete with their DSL services against cable modem service providers. Bell DSL services generally use CWA-member union employees, whereas many cable companies and upstart DSL providers do not use union members.

Impact on Competition Debated

Those smaller Bell competitors were focus of much of rhetoric Mon. In yet another letter, this one by Small Business Survival Committee Pres. Karen Kerrigan, House members were told SBSC was making HR-1542 key vote for its voter guides, while advising them to oppose bill. “America’s small business and entrepreneurial sector are the engines of U.S. economic growth,” she wrote: “We cannot allow the Baby Bells to run roughshod over small competitive telecommunications providers as they have been doing.” Small competitors were of concern to Ashdown and Consumer Federation of America’s Mark Cooper as they held briefings on Capitol Hill for staffers. Tauzin-Dingell “is the end of the independent ISP,” she said, adding that Cooper “absolutely agrees.” Executive of one small company, New Edge Networks CEO Dan Moffat, said he was sure members of House had “been lobbied hard from all sides,” but he hoped each member would contemplate how his or her “constituents will benefit from a bill that threatens to eliminate the potential for meaningful telecommunications competition, thousands of jobs among upstart competitive communications providers and new capital investments that spur innovation, convenience and customer savings.”

Debate begins on Tauzin-Dingell Wed., first on 4-5 amendments expected to be approved by House Rules Committee, which meets on issue today (Tues.). Vote on full bill isn’t expected until Thurs. One amendment likely to be permitted for consideration is one from House Telecom Subcommittee Chmn. Upton (R-Mich.) that would increase fines for Bell company violations to $10 million. At least one amendment related to requiring Bells to permit DSL-level interconnection is likely to be considered, although Tauzin and Dingell would prefer one by Reps. Buyer (R-Ind.) and Towns (D-N.Y.). Supporters of another interconnection amendment pushed by House Judiciary Committee ranking Democrat Conyers (Mich.), Rep. Cannon (R-Utah) and others argue that Buyer-Towns amendment would permit interconnection only at rates not economically viable for competitors.