PANEL SEES HR-1542 SPARKING SENATE DEBATE DESPITE OPPOSITION

House Commerce Committee Chmn. Tauzin (R-La.) and ranking Democrat Dingell (Mich.) got their chance Wed. to attempt to convince Senate Commerce Committee their data deregulation bill (HR-1542) was worthy of consideration. As expected, Chmn. Hollings (D-S.C.) again said bill appeared to be “wolf lurking in sheep’s clothing,” providing “smokescreen” for Bell remonopolization. Several members were supportive of Tauzin’s and Dingell’s efforts in bringing issue of broadband deployment to forefront of congressional debate. However, members indicated Tauzin-Dingell bill in its current form probably wouldn’t survive in Senate. Members’ views of bill were mixed, as were industry responses to committee’s general call for further assessment of technology policy.

Tauzin acknowledged bill would undergo additional changes as it moved through legislative process: “I don’t expect the Tauzin-Dingell bill as it came from the House to pass in the Senate.” He told the panel that despite their differences of opinion, “our goals are mutual,” and expressed confidence that Congress would update current technology policies that “bottle up” advanced infrastructure investment: “It’s time to open up that bottle and let that genie out.”

Dingell was less conciliatory, and urged HR-1542 opponents such as Sen. Dorgan (D-N.D.) to “sit down with us” and listen to merits of bill rather than spin put on by “high-paid, fat-cat lobbyists.” He emphasized bill would require Bells to provide high-speed Internet service “everywhere” in their respective regions. Dingell said that in light of that buildout requirement and bill’s proposed increase in the FCC’s fining authority, there was little need for improvement. If Senate could devise better bill, Dingell said he welcomed such move: “If you can do better than we did, we challenge you to do that, we urge you do that, and we hope you succeed.”

Dorgan said no matter what supporters and opponents said of Tauzin-Dingell, “simply, the bill is not going to pass the United States Senate.” Sen. Stevens (R-Alaska) said he had “serious problems” with HR-1542, and rejected claims that Telecom Act was designed solely to promote voice and not data services. Hollings said “Bell lawyers wrote the market- opening provisions of the Act in my office. Then they praised the bill and promised” to offer one-stop shopping for local, long distance and Internet services… [Then] they litigated the very constitutionality of the law they helped draft.”

Sen. Brownback (R-Kan.) said telecom industry faced “different situation” than it did before passage of 1996 Telecom Act. He criticized what he said was regulatory disparity between telcos and cable, and said his deregulatory bill (S-1126) as well as HR-1542 addressed issue: “There is no one silver bullet solution in creating a national broadband policy, and while tax credits and loan guarantees can help, regulatory reform must serve as its cornerstone.” Sen. Breaux (D-La.) expressed similar sentiments about achieving regulatory parity and said “right now you have an unlevel playing field that [Tauzin-Dingell] is attempting to address.”

Ranking Republican McCain (Ariz.) didn’t address specific legislation, but said “a truly deregulatory approach cannot be narrowly focused on one particular segment of the industry.” He lauded FCC Chmn. Michael Powell for attempting to find ways to encourage deployment. McCain said FCC was “working diligently” to fulfill requirements of Act’s Sec. 706, which required removal of barriers to broadband deployment. Sen. Smith (R-Ore.) said he was “still weighing some of the difficult issues implicated by Tauzin-Dingell.” He agreed “public policy needs to encourage all potential providers to deploy new last-mile broadband facilities,” whether by ILECs or CLECs.

Tauzin said 89% of Americans lacked access to broadband service, saying fiber and DSL lines passed many homes but weren’t connected to most residences. He said policymakers often neglected to consider fact that cable companies had to make additional investments in nodes and other equipment to get fiber to home and to ensure transmission speeds weren’t diminished. He said Bells had similar requirements related to DSL deployment, but were saddled with additional regulatory burdens that deterred investments.

AT&T spokesman said “bill is obviously going nowhere in the Senate,” as evidenced by majority of committee members who made it clear they wouldn’t support measure. He said Tauzin used “preposterous data” in his presentation: “It’s totally incorrect to say that lines pass but do not connect to homes.” He said FCC and Commerce Dept. had issued reports saying 75-85% of country had access to broadband via cable or DSL. When Bells make their case in Washington for data deregulation they talk about barriers, he said, “but when they're talking to Wall Street, they're happily talking about how they're rolling out DSL across the nation.”

American ISP Assn. Pres. Sue Ashdown rejected Tauzin and Dingell contentions that that they supported policies benefiting rural and underserved communities. While they claim HR-1542 would spur broadband deployment in such areas, she said, they're fighting to remove language from a farm bill conference report that would guarantee low interest rural broadband loans: “Congressman Tauzin and Dingell have reached the pinnacle of hypocrisy. In one breath they bemoan the lack of high-speed Internet access in rural America… But then they admit without any reservation that the $500 million in subsidies for the deployment of high-speed access in rural areas would actually hurt the chances of… their bill being considered in the Senate.” Tauzin denied opposing farm bill telecom subsidies, saying he and Dingell -- who are on conference committee -- were asserting rightful jurisdiction over matter: “We would not like the Agriculture Committee setting broadband policy. It’s that simple.”

Sen. Burns (R-Mont.) said he didn’t support Tauzin- Dingell, but “the goal of the bill is a worthy one.” He agreed “universal broadband should be a national priority,” but said his biggest concern with HR-1542 was the proposed preemption of state public service commission authority. He instead offered his support for Rural Utilities Service (RUS) low-interest broadband loans under consideration in the Agriculture conference: “Given the positive history of small operators, I fully support the Senate provision being considered in the farm bill conference that provides stable funding” for the RUS loans. Sen. Allen (R-Va.) took similar position, questioning whether reform of Communications Act and Telecom Act would “miraculously” spark mass deployment. He instead pledged support for broadband tax credit bill by Sen. Rockefeller (D-W.Va.). Sen. Kerry (D-Mass.) agreed bill wouldn’t pass in its current form, but credited Tauzin and Dingell with facilitating debate.

USTA Senior Vp Daniel Phythyon said hearing “highlights the growing support in the Senate for encouraging the rise of a truly competitive broadband market.” BellSouth Govt. Affairs Vp Herschel Abbott said “rumors of the demise of broadband legislation in the Senate should now stop.” He said Tauzin and Dingell “made clear that nothing in the bill will harm CLECs or cable companies, nor change regulation of voice services by telcos.” Abbott said it was encouraging that committee members “expressed willingness to work with their House counterparts in moving legislation.”