Act II?

Congress is gearing up for an IP-focused revision of the Telecommunications Act in what promises to be a contentious process that could leave service providers in limbo on key voice and video services issues for some time to come.

While many players on and off Capitol Hill have held out the possibility Congress might act only on a piecemeal basis to address urgent issues that the FCC may not be in a position to resolve on its own, the mood among House and Senate leaders responsible for guiding telecom policy has solidified around the idea of getting the job done through a coordinated approach to revising the 1996 Act. “We’ve been talking about reform of telecommunications regulation for a couple of years,” says a House Energy and Commerce Committee staffer, speaking on background. “Now it’s moving in the direction of a single legislative package.

This is very high on [committee] Chairman [Joe] Barton’s agenda.” This spring, Barton (R-Texas) made clear he favors changes in the law regarding whether cable franchise regulation should apply to IPTV. Now, says the House aide, it’s understood the cable franchise issue will be addressed in the context of new legislation that deals with all the policy issues related to IP technology, including voice and data as well as video. “There will be other topics covered, but this legislation will primarily affect IP applications that run over networks,” he adds.

While Barton and Rep. Fred Upton (R-Mich.), chairman of the House subcommittee on telecommunications, are spearheading development of legislation that is to be introduced this fall, Senate telecom subcommittee Chairman John Ensign (R-Nev.) already has put a measure in the hopper which in many respects seems to comport with the policy views expressed so far by Barton. Co-sponsored by Arizona Republican John McCain, Ensign’s “Broadband Investment and Consumer Choice Act” would do away with local cable TV franchising altogether and sunset existing local loop unbundling and narrowband communications resale requirements by Jan. 1, 2011, among other things.

“We feel there is broad bi-partisan support for Sen. Ensign’s bill,” says Ensign press aide Jack Fynn. “I’m sure there will be consultations with the House as things move forward, but I’m not aware of any meetings with their people as yet.” No hearings had been scheduled on the Ensign bill at press time, but Fynn said they probably would be under auspices of the telecom subcommittee.

In a speech this spring before the Federal Communications Bar Association in Washington, D.C., Senate Commerce, Science and Transportation Committee Chairman Ted Stevens (R-Alaska) made clear he and Ensign are on the same page with telecom policy reform. “There’s almost a universal concern about the costs and merits of state regulation or local regulation,” Stevens said. “I am one who basically believes in states’ rights, but this is getting to the point now where we will have to find a way to deal with these issues that confront the industry.”

Ensign echoed a similar theme in the statement he released with introduction of his bill in late July. “Despite a variety of options for consumers, we still regulate based on ancient history — how a company grew up — instead of recognizing the realities of the marketplace and regulating similar services in similar ways,” Ensign said. “By providing a federal set of standards that states can enforce, we will allow national carriers to invest and compete without a patchwork quilt of regulations.”

In the House, Barton appears to be headed in the same direction. In an interview posted on his Web site, Barton referred to the legislation taking shape in his committee as the “Internet Protocol/broadband bill.” “My general feel is that we do as little regulatory oversight as possible, provide access and transparent interstate rules and regulation, and let the market decide the outcome,” Barton said.

For more on the "Internet Protocol/broadband bill," visit our Added Insight section at www.xchangemag.com/addedinsight and read “A Dissenting View.”

Notwithstanding potential roadblocks, Barton believes things can move forward at what would be warp speed for Congress. “Stevens wants to do a big bill, and I think there’s probably a 75 percent chance we get it done this year,” Barton said.

For more on how new activity in Washington may delay some carrier action, visit our Added Insight section at www.xchangemag.com/addedinsight and read “New Activity in Washington.”

Meanwhile the FCC is forging ahead with the business of addressing new issues and adjusting its regulations to comport with recent court decisions on unbundled network elements and broadband access. On the last count, the commission in August lifted the requirement that ILECs sell DSL access as an unbundled component of their broadband service, thereby putting the carriers on par with cable companies in the wake of a U.S. Supreme Court ruling upholding the commission’s cable broadband policy. ILECs were to continue providing unbundled access to existing unaffiliated ISP customers for another year, but after that the ISPs will have to find other means of accessing customers or pay higher costs to entice broadband SPs to share their facilities.

In other aspects of the broadband ruling, the commission set a 270-day timeframe for establishing new universal service contribution requirements for wireline broadband providers, leaving the current regime intact until it acts. Addressing concerns of smaller ILECs, the order allows wireline providers the flexibility to offer the transmission component of the wireline broadband Internet access service to affiliated or unaffiliated ISPs on a common-carrier basis, a non-common carrier basis or some combination of both. At press time, the details on this and other aspects of the order were unclear, pending release of the full document.

While the FCC could make some headway revising rules to accommodate some aspects of the IP revolution, uncertainties about its latitude to forge policy on the sensitive issue of IPTV regulation appeared to be a driving force behind the stepped-up momentum toward telecom reform in Congress. “We’re looking hard at what, if any, aspects of IPTV might comprise the foundation for a definition of service that falls outside the [Telecom] Act’s cable service definition,” says an FCC official, speaking on background. “But, frankly, this is one issue that might be better addressed at the legislative level.”

Ensign’s bill does just this by calling for the elimination of local franchise authority as established under previous iterations of the Telecommunications Act. Local franchise rules are “a problem, really, in terms of 30,000 local franchises that would be necessary for each Bell to enter the video marketplace,” Stevens said in a recent speech. “That could be very costly and, really, ultimately, kill competition. ... So, it appears to us now that we ought to think about some kind of a national solution.”

For more on the local franchise debate, visit our Added Insight section at www.xchangemag.com/addedinsight and read “A Refresher on the Local Franchise Debate.”

• Eliminate local cable franchising requirements for all video providers while providing for the assessment at the state level of a franchising fee of up to 5 percent of video service revenue
• Preserve many requirements in the Cable Act and apply them to all video providers, including must-carry, retransmission consent, PEG (public access, education, government) support and other provisions
• Prohibit multichannel video distributors who own content they deliver to their customers from denying other multichannel video distributors access to that content on fair and reasonable terms
• Require the FCC to set customer service and consumer protection requirements exclusively enforceable by states
• Eliminate Title I (General Provisions), II (Common Carrier) and VI (Cable Communications) requirements generally, along with applicable state and local laws, with key exceptions related to the provisions of Communications Assistance for Law Enforcement Act (CALEA), prohibitions on obscene Internet material, pole attachment requirements, telephone solicitation and access for the disabled
• Require ILECs to continue offering basic telephone service at capped rates and terms under quality and feature requirements established by the FCC and enforced by the states
• Prohibit VoIP blocking and any other denial of consumer access to legal content
• Preserve unbundled access rules for local copper loop and colocation and narrowband communications resale obligations until Jan. 1, 2011
• Retain number portability requirements