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Congress to return to stack of telecom bills

Legislators will return from their summer hiatus to several bills that could change the telecom industry.

Legislators will return from their summer hiatus to several bills that could change the telecom industry, from loosening regulations on Baby Bells to protecting the privacy of cell phone owners.

The aftermath of the Telecommunications Act of 1996 left a lasting impression on the industry as well as on Capitol Hill. Many executives, analysts and trade groups increasingly believe that although the law helped spur dramatic growth, it did not work as intended.

"These new bills are a chance to refocus on the Telecommunications Act of 1996," said Ross Sealfon, a research analyst at IDC who covers telecom regulation. Congress reassembles Sept. 4.

The sweeping deregulation brought competition into the marketplace and fostered the creation of many companies that would compete for local and long-distance services. But these upstarts have mostly faded or fizzled, leaving an industry dominated by the same old players and leading some to think that new legislation might be needed.

After massive consolidation and growing familiarity in Washington with communications and Internet issues, a variety of proposed laws have surfaced to tweak the telecom sector.

Legislators, lobbyists and telecom companies have focused most of their attention and resources on the Internet Freedom and Broadband Deployment Act of 2001, a measure sponsored by Reps. Billy Tauzin, R-Louisiana, and John Dingell, D-Michigan, that allows the local phone giants, often called "Baby Bells," to get into the market for long-distance data services. The bill also would significantly ease requirements of opening their data networks to competitors.

Those that oppose the bill, mainly start-ups and long-distance carriers, believe it would shift the balance of power within the industry solidly in favor of the Bells, which counter by saying that present laws hinder them from building new infrastructure.

Other pieces of legislation may garner lawmakers' attention once the fracas over the Tauzin-Dingell bill subsides:

• The Broadband Internet Access Act, introduced in January by Sen. Jay Rockefeller, D-W.Va, would give tax credits to ISPs (Internet service providers) that provide access to rural and underserved consumers.

Laws on the floor
Lawmakers will have stacks of bills to consider when they return in September. Here are a few concerning the telecom industry that will compete for attention.

Bill Name: Internet Freedom and Broadband Deployment Act
Bill Number: HR 1542
Sponsors: Reps. Billy Tauzin, R-La. and John Dingell, D-Mich.
What it does: Eases regulations for local phone companies

Bill: Broadband Internet Access Act
Number: S 88
Sponsor: Sen. Jay Rockefeller, D-W.Va.
What it does: Gives tax credits to companies that provide Internet access in rural or underserved areas.

Bill: Location Privacy Protection Act
Number: S 1164
Sponsor: Sen. John Edwards, D-N.C.
What it does: Puts rules on how phone companies can use the location information of wireless phones users.

Bill: Spectrum Resource Assurance Act
Number: HR 2535
Sponsor: Rep. Cliff Sterns, D-Fla.
What it does: Removes limits on how much of the airwave spectrum a wireless carrier can own in a specific market.

• The Location Privacy Protection Act, introduced in July by Sen. John Edwards, D-N.C., calls for guidelines on how wireless phone service providers use subscriber location information. Current technology enables companies to find the general location of mobile phone users.

• The Spectrum Resource Assurance Act, proposed in July by Rep. Cliff Sterns, R-Fla, would lift restrictions on the amount of spectrum a wireless service provider can own within a specific market.

But for now, most of the political world is set on passing or pummeling the Tauzin-Dingell broadband measure.

"I think its chances of being enacted into law are pretty slim," said Blair Levin, a telecom analyst at investment bank Legg Mason, and a former chief of staff at the Federal Communications Commission.

Tauzin-Dingell "will pass the House easily, but it will have very rough sledding in the Senate," said Scott Cleland, an analyst at Precursor Group, who doubts the bill's chances this year.

Rural areas want broadband
Elsewhere, Congress has paid particular attention to providing low-income and rural areas with high-speed Net access.

The Rockefeller bill has enjoyed broad support in the Senate and has a good chance of moving on, insiders say.

Levin thinks legislation will come out of Congress eventually that will address the scarcity of broadband in rural areas. But there are many ways to give organizations the incentive to build high-speed Internet services, such as through tax breaks, grants, loans and other means.

"There is a chance that there will be some broadband Senate legislation, what it will look like is open to debate," Cleland said. "There is Senate consensus on the problem, but no consensus on what to do."

Privacy, please
Privacy as it relates to technology has also become a heated topic across the country, and legislators have wasted little time in responding to consumer concerns.

The main thrust of the Edwards bill is to protect wireless phone users from companies that collect and sell their location information to marketers without permission.

The measure would still permit public emergency services such as fire departments and ambulance crews to have access to the data for safety situations.

A similar bill called the Wireless Privacy Protection Act was also proposed in February by Rep. Rodney Frelinghuysen, R-N.J. The legislation calls for similar requirements that alert consumers if wireless companies collect their location data.

Edwards' bill does not have any co-sponsors in the Senate at this time, but has been referred to the Commerce Committee where it might have an inside track since Edwards is a member.

Travis Larson, a spokesperson for wireless industry group Cellular Telecommunications & Internet Association (CTIA), says that Congress might be a little too eager on this issue, and should leave it to the FCC.

"CTIA looks forward to working with everybody concerned with location-based privacy," Larson said, "but we feel that the FCC currently has authority to establish rules on this issue."

Edwards' press secretary Michael Briggs differs with this view. The FCC "has shown some interest in the area, but we're just hoping to give them more of a clear direction," he said.

Laws up in the air
Although big business can become cranky over more government rules on privacy, wireless companies warmly welcome help from legislators in freeing more spectrum for commercial use.

Wireless companies are restricted in the amount of radio spectrum they can use to carry their signals in both rural and urban markets. The regulation helps prevent any one company from establishing a monopoly in a market, and Sterns' Spectrum Resource Assurance Act would eliminate such restrictions.

"CTIA has long supported the removal of spectrum caps. Caps limit the ability of a carrier to service their customers," said CTIA's Larson.

No legislators have stepped forward yet to support the bill, but it's parked at the House Commerce Committee, which should give the bill a hearing since Sterns serves in that group and is vice chair of its telecommunications subcommittee.

Cleland believes the measure is not needed, but may serve to prod the FCC into action. "It's a significant signal to encourage the FCC to lift the cap" on spectrum limits, he said.

An uncertain future
As for the Telecom Act and whether or not it should be fine-tuned with more legislation, the debate rages on.

Levin, who helped draft the Telecom Act while at the FCC, believes a little more patience is in order because some of the legislation has yet to be implemented as companies and regulators wrangle over how to put the Act into practice. Any major changes would create more uncertainty and might delay investment further, he said.

Cleland disagrees and says the industry could use some more tweaking through additional bills.

"It would be hard for Tauzin-Dingell to produce something worse than what we have now," he said.