Bell Data Dereg Bill Clears House Panel

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Washington — A broadband-deregulation bill designed to help the regional Bell operating companies vie with cable for high-speed Internet subscribers cleared the House Energy and Commerce Committee last Wednesday, after the panel struggled for nearly eight hours over a host of complex amendments.

The bill (HR 1547) — which was approved in a 32-to-23 vote — may now advance to the full House. But Capitol Hill sources said that step could be several months away, due to a jurisdictional dispute with the House Judiciary Committee and a lack of consensus on key provisions that could damage the competitive position of upstart local voice and data carriers.

Other issues still to be resolved include whether the Baby Bells will face up to $20 million in fines for discriminating against various competitors and for failing to install digital subscriber line upgrades in all central offices within five years. A hearing on Bell fine legislation is scheduled for this week.

The bill, sponsored by Reps. Billy Tauzin (R-La.) and John Dingell (D-Mich.), is highly controversial, and has prompted both proponents and detractors to bombard several media markets with print and television ads.

It pits the Baby Bells on a massive deregulatory mission against competitors that claim the bill would drive them out of business and hand the Bells a monopoly in the provision of both high-speed data and traditional voice services.

Opponents also question a provision that would allow a given RBOC into the long-distance data market before it opens its local voice network to competitors, as mandated by current law.

"It's now the time to just stop the madness," said H. Russell Frisby, president of the Competitive Telecommunications Association (CompTel), moments after the committee vote.

CompTel and a diverse coalition that includes AT&T Corp. is trying to inject a little sanity into the debate — in its view — by supporting competing legislation (HR 1697) sponsored by Rep. John Conyers (D-Mich.)

The Conyers bill would nullify immediate long-distance data relief in any state in which the Bell company had at least 85 percent of local residential or business subscribers.

According to a Capitol Hill source, the Judiciary Committee is planning a hearing on the Conyers bill on May 22, but a Judiciary committee spokesman would not confirm that timeframe.

Judiciary chairman Rep. James Sensenbrenner (R-Wis.) also wants to review the Tauzin-Dingell bill, but House Speaker J. Dennis Hastert (D-Ill.) has not ruled on the request. Tauzin opposes Sensenbrenner's referral.

McCAIN: NO GUARANTEES

If the bill clears the House, Senate approval is problematic. Senate Commerce Committee chairman John McCain said he would give the Tauzin-Dingell bill a look, but offered no guarantees on anything else.

"The bill in the House in my view would be very difficult to pass through the Commerce Committee at this time," McCain said. "We think that you need a lot of balance on that issue. But if the House wants us to examine that bill when it comes over, we will certainly do so."

The Bells and their supporters insist the bill, formally called the Internet Freedom and Broadband Deployment Act, is a crucial financial incentive toward deploying fiber lines from coast to coast and preventing cable operators from maintaining or increasing their 70 percent share of the high-speed access market.

In addition to allowing long-distance relief, Tauzin-Dingell would allow the Bells to deploy high-speed Internet facilities without having to lease parts of their advanced network to competitors, although the scope of that relief is subject to conflicting interpretations.

"This bill provides the right amount of deregulation for broadband services. It rejects the application of antiquated telephone rules to a new market like broadband," Tauzin said.

"The Bells don't need legislation to offer digital service," complained Rep. Edward Markey (D-Mass.) "… What we are passing out of this committee today … (is) an unregulated monopoly."

One of the biggest battles waged last week involved changes to the Federal Communications Commission's line-sharing rules, which permit data competitors to save on payments to the Bells by leasing just the data portion of a line.

The bill would abolish line-sharing rules that apply to loops that the Bells have either fully or partially upgraded to fiber, but maintain the regulations with respect to all-copper lines.

An amendment sponsored by Rep. Bill Luther (D-Minn.) that would have preserved line sharing on fiber failed in a 27-to-27 vote. Under committee rules, amendments require a majority vote for adoption.

Tauzin and Dingell said the amendment, if it passed, would have destroyed any incentive for the Bells to deploy fiber. But opponents complained that competitors need to lease only the data portion to remain commercially viable.

"I am concerned this bill could be the death knell of an industry," said Rep. Diana DeGette (D-Colo.)

Tauzin spokesman Ken Johnson said Tauzin and Dingell need to generate more support for their line-sharing restrictions before the full House takes up the bill.

"We've got some homework to do," Johnson said. "Obviously, we want to avoid a repeat of this on the House floor. We need to do a little better job of educating members about the issue, as well as some of these potential poison-pill amendments."

Rep. Rich Boucher (D-Va.), who strongly supports the Tauzin-Dingell bill, said in an interview last week that the bill would not produce the kind of market cataclysm that foes have predicted. He called the idea that the bill would lead to the demise of data competitors "a myth."

He said digital subscriber line providers would be allowed to install their DSL facilities in a Bell central office and engage in line sharing if the entire line is made of copper. In a change adopted last week, the bill also grants them the right to resell Bell DSL services at wholesale rates for three years.

After three years, resale rates would be negotiated. That renegotiation must be at reasonable and nondiscriminatory terms.

To the extent that line sharing over Bell fiber becomes impossible, the bill would allow competitors to lay their own fiber from the central office to their own remote terminals, and then connect to a Bell copper loop that runs from am RBOC-owned remote terminal to the end user. This scheme would allow line sharing on a copper subloop, Boucher said.

In a sweeping provision, the bill would also ban the FCC and states from regulating the relationship between the Bells and competing DSL Internet-service providers. As is the case with ISPs that seek access to cable facilities, DSL ISPs would have to negotiate their way onto DSL phone networks if they want carriage.

Boucher offered, but subsequently withdrew, an amendment that would have required the Bells to strike deals with other DSL ISPs on "nondiscriminatory rates, terms and conditions."

"The [local-exchange carriers] do not oppose this," Boucher said, predicting his amendment would end up in any bill the House approves.

But Capitol Hill aides and ISP representatives maintained that Boucher's amendment was insufficient to overcome unfair business practices they may confront in their dealing with the Bells.

If DSL ISPs have a complaint about Bell access conditions, they can't turn to state or federal regulators. Their only option is to engage in expensive litigation in federal court.

"That may be true," Boucher said. But parties can often seek clearer and faster rulings from courts than from the FCC or state public-utility commissions, he added.

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