Come September, Lawmakers Must Tackle Broadband Access

Come September, Lawmakers Must Tackle Broadband Access

William Kennard

By Kerry Gildea, Contributing Writer

Legislation aimed at speeding the deployment of broadband services provoked strong opposition from a top administration official late last month, setting the stage for a showdown when Congress returns in September from its month-long recess.

Two bills pending before Congress would spur broadband communications by amending the Telecommunications Act of 1996, established to open the local telecommunications market to competition. The bills reflect a growing consensus that some action is needed to expand broadband communications, which include digital technologies that provide access to voice, high-speed data and video.

Some in the Clinton administration and industry worry that if lawmakers push massive reforms to the Telecommunications Act, the competition that already exists on some scale may be jeopardized in the future.

One unresolved issue is defining the role of incumbent local exchange carriers (ILECs) that could provide the broadband Internet capabilities. Some ILECs argue they have been deterred from investing the necessary capital to build digital subscriber lines to offer high-speed Internet access, because the Federal Communications Commission may require ILECs to make all their broadband facilities available to competitors as unbundled network elements.

Before leaving for recess, members of the House and Senate Commerce committees held hearings to address the need for broadband Internet regulatory relief. During a July 26 hearing of the Senate Commerce Committee, FCC Chairman William Kennard urged that the Telecommunications Act of 1996 be left in place.

"The genius of the [act] is the delicate balance it strikes between regulation and deregulation to achieve competition in all forms of communications, and to deploy the fruits of that competition to all of the American people," Kennard said.

In particular, he opposes a bill sponsored by Sen. Sam Brownback, R-Kan., the Broadband Internet Regulatory Relief Act of 2000 (S. 2902). Brownback claims his bill would speed deployment of broadband networks throughout the United States and make residential high-speed Internet access widely available.

The Brownback bill also provides regulatory relief to telephone companies willing to deliver broadband connections to rural areas.

One key provision provides that ILECs will not have to sell or make available their broadband access services to their competitors, if they make 70 percent of their service area loops ready to support broadband access.

This provision is designed to create an economic incentive for these companies to invest in high-speed technology. The bill also prohibits the FCC from regulating prices for broadband Internet access offered by these companies if a competitor is present in the market.

Kennard argued that the Brownback bill would slow down the delivery of broadband services to rural areas by impeding the growth of competition.

"I am sure that increased competition is the well-meant intention of the proposed legislation," Kennard said. "Inadvertently, however, I believe this legislation will not only upset the balance struck by the 1996 act, it actually would reverse the progress attained by the 1996 act. In an effort to move us forward, this bill mistakenly moves us backward."

Kennard also maintained that the Telecommunications Act is working.

"Because of years of litigation, competition did not take hold as quickly as some had hoped," he said. "The fact, however, that it is working now is undeniable. Local markets are being opened, broadband services are being deployed and competition, including broadband competition, is taking root."

Meanwhile in the House, Rep. Billy Tauzin, R-La., chairman of the House Commerce telecommunications subcommittee, and House Commerce Ranking Democrat John Dingell, D-Mich., have introduced a bill to allow incumbent local telephone companies to compete with incumbent cable companies in offering high-speed Internet.

The Internet Freedom and Broadband Deployment Act (H.R. 2420) states that Internet service providers could interconnect with a phone company's high-speed network so that ISPs could have access to at least one broadband network. Consumers would then be guaranteed a choice among providers.

Testifying at a telecommunications subcommittee hearing July 27, some of the small-sized service providers urged for passage of H.R. 2420.

"We need relief from regulation; federal and state regulation impedes our growth, and regulatory costs are obscene," said Arne Haynes, president and chief executive officer of The Rainer Group, which he said has served telephone companies in the foothills of Mount Rainier, Wash., since 1910. Haynes noted that his great grandfather won the company in a pinochle game in 1912 and he is a fourth-generation manager of the company.

"I believe the provisions of H.R. 2420 will allow us to continue to expand our operations," Haynes told the panel. "Without the deregulatory aspects of the bill, we fear that our Washington operations will be severely harmed and expansion curtailed."

Meanwhile, the larger telecommunications providers argued against the proposed changes to the Telecommunications Act.

"The bottom line is that market participants in all regions of the country have greatly increased their deployment of various broadband technologies," said Leonard Cali, vice president of federal government affairs for AT&T Corp. "This competition means more choices and lower prices ? clear evidence that the marketplace is meeting the very needs that this bill seeks to address.

"Congress should not jeopardize the further deployment of these technologies nor the competition that exists today by passing legislation that would re-open the 1996 Telecommunications Act and undercut its incentive-based framework," Cali said.

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