The House of Representative is scheduled to vote tomorrow on the controversial Tauzin-Dingell bill, which aims to drive the Bells’ investment in broadband access by eliminating many requirements of the Telecommunications Act of 1996 targeted at the Bells.
The Tauzin-Dingell bill -- aka the Internet Freedom and Broadband Deployment Act, or H.R. 1542 -- aims to repeal portions of the ‘96 Telecom Act that require the Bell phone companies to lease parts of their local networks to competitive carriers at wholesale prices. If passed, the legislation would also allow Bells to offer long distance data services before meeting local competition standards now in place under the act.
The Bells say eliminating these requirements would spur them to make more investments to deliver broadband access. Executives at the various Bell companies contend that investing in new broadband networks only to have to lease them at cut-rate prices to competitors doesn’t make good business sense.
“The issue on broadband is really pretty simple: how to push more diverse technologies into the marketplace where they can fuel the economy, stimulate innovation and give America the secure, redundant infrastructure it needs," Ivan Seidenberg, president and CEO of Verizon, was quoted in XCHANGE magazine’s January cover story as saying. "In our industry -- as in all capital intensive, technology driven businesses -- it's also pretty clear how to do that: promote new investment by taking down the 'do not enter' signs that impede the flow of capital. At the most basic level, that's what the broadband legislation known as the Tauzin-Dingell bill is designed to do."
Walter B. McCormick Jr., president and CEO of the U.S. Telecom Association, which lobbies on behalf of the Bells, was quoted in the same XCHANGE article saying of the Tauzin-Dingell proposal: "Think of it as an adrenaline shot for the economy worth hundreds of billions of dollars that doesn't cost the U.S. Treasury a dime."
On the same front, the Communications Workers of America has urged the House to support the bill, saying it would create new jobs and boost competition among companies supplying broadband network services.
On the flip side, competitive carriers argue that lowering requirements for the Bells will result in less competition and therefore less impetus for the Bells to offer new services and transport options.
Bruce Kushnick, executive director of the New Networks Institute, in the XCHANGE January article was quoted as saying that legislation such as Tauzin-Dingell "is an attempt by Bell campaign-financed congressmen to forget history and give more money to the Bell monopolies, all in the name of broadband. The Bells already received over $58 billion in added customer phone charges for fiber-optic broadband services they never delivered."
CEOs of some 106 telecom companies, ranging from AT&T Corp. to KMC Telecom Holdings Inc., several months ago sent a letter to congressional members opposing legislation that would give the incumbents relief from the Telecom Act's market opening provisions. If enacted into law, they wrote, the consequences would be devastating for a New Economy because such legislation would allow four megacompanies, each possessing an unregulated monopoly over local telephone services and Internet access, to have too much concentrated power.
A group of state and local officials are also railing against the legislation.
The National Governors Association, National League of Cities, National Association of Counties, International City/County Management Association, and the Council of State Governments last night sent Congress a letter asserting that "This legislation contains provisions that will interfere with and preempt the traditional and legal rights of state and local governments."
