U.S. House splits over the Internet Act

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The proposed Internet Freedom and Broadband Deployment Act of 2001 draws strong opposition from House members who see the bill as a market-cornering effort and an attack on antitrust and consumer-fraud laws.

Early this year, Rep. Billy Tauzin (R-LA), chairman of the House Committee on Commerce and Energy, said he planned "to do some very exciting things" (see Lightwave, June 2001, p. 29). He probably did not expect to provoke a revolt by his Republican colleagues in the House or to have the Senate ignore his bill, HR1542, the Internet Freedom and Broadband Deployment Act of 2001. Tauzin's committee recently passed the bill by a vote of 32 to 23. Influential Republicans such as Rep. Tom Davis (R-VA), who helped develop the Northern Virginia Technology District, and Rep. Chip Pickering (R-MS), a former assistant to Sen. Trent Lott (R-MS) and supporter of Mississippi-based WorldCom, voted against the bill. Davis opposed it partly because his amendment to define "high-speed" Internet access as 1.5 Mbits/sec instead of 384 kbits/sec, the definition preferred by Tauzin, was rejected.

Besides imposing a low-speed antiquated telecom infrastructure on the United States, HR1542 would allow incumbent phone companies to offer DSL services in long-distance markets without approval by the Federal Communications Commission or the U.S. Department of Justice and free the incumbents from the obligation of sharing their DSL lines with competitors. This attempt to rewrite the Telecommunications Act of 1996 and antitrust laws met unexpected resistance from James Sensenbrenner (R-WI), chairman of the House Judiciary Committee. He sees Tauzin as blatantly exceeding his committee's jurisdiction, thus violating House rules. Sensenbrenner asked the Speaker of the House to send Tauzin's bill to the Judiciary Committee for its approval, because "there are several bases for...[its] jurisdiction over HR1542."

The Judiciary's chairman identified a list of dangerous flaws in the proposed legislation: The bill "eliminates potential antitrust actions by...the Department of Justice...can be read to eliminate all Commission [FCC] or state limitation on voice as well as data transmission...could eliminate even basic anti-fraud protections as well as many other consumer protection statutes...would eliminate the rights of the...state attorneys general to bring antitrust suits...would eliminate the role of the Department of Justice in reviewing most activity that would currently fall within the parameters of the [1996 Telecom Act]."

Sensenbrenner asserted that "elimination of such actions falls squarely within the Judiciary Committee's...jurisdiction," and his committee introduced HR1697, the Broadband Competition and Incentive Act, and HR1698, the American Broadband Competition Act of 2001. The bills restore statutes and regulations that Tauzin's bill eliminates.

HR1542's proponents portray it as a battle against the established long-distance companies, which may explain Tauzin's statement to the Wall Street Journal: "All I can say to AT&T is 'duh,' what kind of business is it that moves into another company's store and resells their goods." Scott Cleland, an advisor to the Bush presidential campaign (see Lightwave, October 2000, p. 22), a witness who appeared before the House Subcommittee on Telecommunications when it was led by Tauzin last year and a critic of the 1996 Telecom Act, said HR1542 removes the "ankle weights and leg shackles'' hampering the incumbents' deployment of broadband technology.

These pithy but misleading statements are ineffective, because the incumbents departed from the strategy they employed last year when Tauzin sponsored a pro-incumbent telecom bill that received broad support in the House. Then the incumbents told the Congressional Black Caucus and representatives from rural areas that their constituents would be among the first recipients of DSL, but these interest groups found no language in HR1542 fulfilling last year's promise and withdrew their support. The Judiciary Committee's bills are sponsored by John Conyers (D-MI), "Dean of the Congressional Black Caucus," and Chris Cannon (R-UT) of Utah's 3rd Congressional district, a largely rural area.

Besides reversing major portions of Tauzin's legislation, these two bills would create a $3-billion loan program to finance the deployment of high-speed Internet service to rural and underserved urban areas, overturn a 7th U.S. Circuit Court of Appeals decision, which found that antitrust law does not apply to telecommunications, and require incumbent phone companies to share their copper loops with competitors at least until the incumbent serves no more than 85% of the access lines in a given local market.

The Judiciary Committee's revolt and the opposition of Davis and Pickering mean that Tauzin and the incumbents have lost the public relations battle.

There is speculation that if Tauzin and Pickering reach agreement, then Lott would sponsor a bill in the Senate Commerce Committee, whose chairman is John McCain (R-AZ), no friend of the incumbents. Furthermore, four powerful members of McCain's committee recently sent a letter to the FCC's chairman, Michael Powell, encouraging him to strictly enforce the Telecom Act and suggesting that the incumbents have halted the nation's progress toward competitive markets: "The deregulation of the Bell companies envisioned by the Act is predicated on the existence of a competitive local marketplace, which does not exist today...Meaningful exercise of [the FCC's] authority is needed in light of the current precarious state of the competitive carriers which is due largely to their inability to obtain affordable, timely, and consistent access to the Bell networks."

The letter was signed by Sens. Ted Stevens (R-AK), chairman of the Appropriations Committee, Conrad Burns (R-MT), chairman of the Senate Commerce Committee's Subcommittee on Communications, Hollings (D-SC), ranking minority member of the Commerce Committee, and Daniel Inouye (D-HI). The letter was written on the Appropriations Committee's letterhead, perhaps to demonstrate to the FCC chairman that the Senators were speaking not just on behalf of the Commerce Committee. Even if Lott supported HR1542 and sponsored a companion bill, it would not be presented for a vote or debated on the Senate floor.

The debate about HR1542 reveals a slow but growing consensus that "broadband" is beyond what DSL technology provides. Conyers touted the $3-billion loan program of HR1697 by equating the local loop with broadband service, "the local telephone facilities...after being enhanced, represent the broadband pipeline." But his bill defines "broadband service" in terms similar to the amendment Davis offered on HR1542. Also, HR1697's "broadband" definition is nearly identical to the definition in Senate Bill S88, The Broadband Internet Access Act of 2001, investment-tax-credit legislation meant to spur deployment of high-speed communications facilities, including fiber, in rural and underserved urban areas. Conyers was specifically referring to these areas when he said "my bill...provides financial incentives for broadband rollouts." HR1697 and S88 coincide and if they are enacted, the fiber-optics industry will have a better opportunity to move product into local telecom markets. That opportunity will never be available if HR1542 becomes the law. Th Acf1189

Stephen N. Brown writes on public policy in telecommunications. He can be contacted by e-mail at policywork@aol.com or by telephone: (615) 399-1239.

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