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Bell foes unite in broadband battle

As two prominent legislators introduce a bill to aid incumbent phone companies in offering DSL services, competitors unite in opposition.

    WASHINGTON--As two prominent legislators introduce a bill to aid incumbent phone companies in offering DSL services, competitors are uniting in opposition.

    House Commerce Committee Chairman Billy Tauzin, R-La., and top committee Democrat John Dingell of Michigan have moved forward with their bill to allow Bell companies such as SBC Communications and Verizon Communications to send data across long-distance boundaries. The bill is on a fast track, with a House Commerce Telecommunications Subcommittee hearing Wednesday and a vote in subcommittee Thursday.

    But a broad range of trade associations representing thousands of telecom companies came together Tuesday to argue that the bill "only gives relief to the most dominant carriers in the telecommunications industry," as put by International Communications Association Counsel Brian Moir.

    While state regulators, telecommunications resellers, facilities-based competitors and others tended to have their own reasons for opposing the bill, two themes emerged. The first is that allowing Bells to send data long-distance removes the Telecom Act incentive for them to open their networks to competitors. Bells can earn the right to send both data and voice long-distance in a given state if they prove to the FCC they have unbundled their networks.

    "Getting into the data market is a big incentive," said Brad Ramsey, general counsel for the National Association of Regulatory Commissioners. "Otherwise they wouldn't be putting up such an effort" to pass the Tauzin-Dingell bill, he said.

    The other concern that surfaced repeatedly is that the bill also seeks to protect broadband equipment on a Bell network from being subject to unbundling and interconnection requirements.

    "The bill seeks to close emerging markets to competitors," said Association for Communications Enterprises (ASCENT) President Ernest Kelly. He said the Bells "would cheerfully concede outmoded, legacy services to competitors in return for monopoly privileges over the future of the industry."

    Bells beg to differ
    Bells maintain that the Telecom Act was never meant to apply to DSL-related equipment, much of which has been installed in recent years and is not part of the legacy phone equipment being considered by legislators.

    In addition, Bells point out that competitive DSL providers still would be able to connect to the Bell companies' local phone networks and lease lines.

    They also deny that the Tauzin-Dingell bill would remove any incentives to open their networks to competitors.

    "Local phone companies would still be required to comply with all the market-opening provisions contained in the Act," said SBC lobbyist John Emra. In addition, he said the Bells would still want to meet FCC requirements to provide voice long-distance so they can gain the additional revenue.

    "The Bells have spent five years and billions of dollars opening their local markets, and they've just now begun to see the fruits of that labor," with SBC authorized for long-distance in three states and Verizon in two, said Emra. "They're not about to pull back now."

    Uphill battle for Bell bashers
    Even the most ardent opponents of the Tauzin-Dingell bill concede that it should have a fairly easy path in the House Commerce Committee. In the last Congress a nearly identical bill was co-sponsored by a majority of the House but was never voted on because former House Commerce Committee Chairman Tom Bliley opposed modifying the Telecom Act and blocked the bill.

    Full passage in the House and success in the Senate seem less certain, however.

    "Several senators have expressed strong reservations" to the bill, said Steve Ricchetti, co-chairman of Voices for Choices. His group is one of several, including the Competitive Broadband Coalition, that have brought together companies, trade associations and consumer groups in opposition to the bill. For now at least, all of these disparate coalitions seem to be working together fairly well.

    "We all talk regularly among the different groups," said Comptel Senior Manager Bonnie Van Fleet.

    Wednesday's hearing has a long list of witnesses, but the highlight could be a face-off between AT&T General Counsel Jim Cicconi and Verizon Senior Vice President of Government Relations Thomas Tauke. Tauke, a former congressman himself, has proposed expanding the bill to include other broadband technologies and possibly improve the bill's ultimate chance of passage.