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House OKs rural broadband bill

To encourage delivery of high-speed data services to rural and underserved areas, members vote for a bill that would lift regulatory burdens from small local phone companies.

    WASHINGTON--The U.S. House on Wednesday gambled that freeing small phone companies from regulations will encourage them to invest in broadband for their customers in remote areas.

    The House passed a bill by Rep. Barbara Cubin, R-Wyo., that would lift regulatory burdens from small local phone companies. A similar bill by Cubin passed the House last year as well but fell short in the Senate.

    This year Cubin says the fate of her legislation will be different. She has tweaked her proposal to protect consumer phone rates and to prevent a company benefiting under the bill from retaining that protection if it grows too large through mergers.

    Broadband access in underserved areas such as rural communities and poorer neighborhoods has been a hot topic here, as politicians continue to grapple with what has been dubbed the "digital divide" in the age of the Internet. Cubin says her bill is the easiest way to close the digital divide.

    "Lessening the burdens on small and midsize telephone companies will help those companies streamline their business plans and shift more resources to deploying advanced telecommunications services for consumers," Cubin said.

    The bill doesn't require these companies to use freed resources for launching broadband services, but Cubin is convinced they will do so to tap into a potentially lucrative market.

    The proposal applies to any phone company that controls less than 2 percent of U.S. phone lines, meaning it applies to just about every local exchange carrier except the Baby Bells. Should the bill become law, these small operators, many of them rural cooperatives, would reap a laundry list of benefits.

    For one, the Federal Communications Commission would have to evaluate every regulation on the books affecting these so-called 2 percenters and eliminate any that interfered with the spread of broadband. In addition, any carrier-related rules written by the FCC could not be applied to 2 percenters until the agency did a thorough review to ensure they wouldn't do harm or otherwise delay their broadband plans.

    "The current regulatory framework for incumbent local exchange carriers is, to say the least, antiquated," said House Commerce Telecommunications Committee Chairman Fred Upton, R-Mich.

    He said FCC rules use a "one-size-fits-all" approach that does not reflect the disproportionate burden of paperwork and other chores on a mom-and-pop phone company vs. a Baby Bell.

    Upton also praised the fact that the bill would require the FCC to act on mergers of 2 percenters within 60 days and on petitions for reconsideration or waiver of FCC rules within 90 days. That language is similar to what is expected to be in FCC reform legislation to be introduced in Upton's own subcommittee.

    Other windfalls for 2 percenters in the bill are as follows:

    • A 2 percenter would only have to give the FCC one day's notice before launching a new interstate telecommunications service.

    • The same one day's notice applies if the carrier wants to change its rates.

    • No 2 percenter could be required to set up a separate affiliate, as some in Washington are considering for incumbent carriers. The idea of a separate affiliate is to have the local network, or "local loop," controlled by a disinterested party to which all phone companies, including the incumbent, could go for access.

    The legislation has moved quickly by Capitol Hill standards, but it runs the risk of meeting the same fate as it did last year, languishing in the Senate.