The Baby Bells last week came within 24 hours of a major victory on Capitol Hill, but a sudden collapse in political support doomed pro-Bell broadband legislation in the House until next year.
The House was expected to vote on the bill Friday, but key lawmakers balked at casting a tough vote on a divisive deregulation bill that has little hope of clearing the Senate, according to sources.
After days of tense negotiations, the drive to pass the controversial measure came to a quick end, causing an aide to House Majority Leader Rep. Richard Armey (R-Texas.) to release a statement confirming that no vote would occur on Friday.
"The leadership has decided to move the vote on broadband to a date certain after we return next year," the Armey aide said. "The likely date would be March."
The legislation, sponsored by Reps. Billy Tauzin (R-La.) and John Dingell (D-Mich.), proposed to help the Bells by allowing them to immediately enter the long-haul data market and shield their broadband networks from government-imposed sharing requirements with their competitors.
AT&T Corp., state regulators, local governments and various other Bell rivals waged an aggressive campaign against the bill, including radio and TV spots that castigated the measure as senseless deregulation and a job killer.
The Bells countered with their own media buy, in which they declared that the legislation would add $500 billion to gross domestic product through new investment and would counter cable's broadband dominance.
"It's obviously a huge defeat for the Bell monopolies," said AT&T spokesman Jim McGann. "Probably one of the key factors is really the overwhelming outcry by state [regulators]."
Verizon Communications Inc., the Baby Bell that operates from Maine to Virginia, pushed hard for the legislation and plans to resume the fight next year.
"We continue to believe this is very important to the country, so we will persevere," a Verizon spokeswoman said.
Tauzin spokesman Ken Johnson said House approval was inevitable early next year.
"This was a delay, not a defeat," Johnson said. "We have the votes to pass it and we have the champagne ordered."
The National Cable & Telecommunications Association declined to oppose the bill — despite opposition of cable operator AT&T — because the measure wouldn't regulate cable-modem service.
Word spread Thursday that Tauzin attempted to lure cable into formally endorsing the bill by threatening to add a cable-access amendment if the industry stayed on the sidelines.
"We haven't seen any such amendment. To our knowledge, nothing was filed," an NCTA spokesman said. "If an amendment were to change that, we would have to oppose the amendment."
Johnson declined to comment on whether Tauzin attempted to add a cable-access provision.
Senate passage has always been problematic, due to the opposition of Senate Commerce Committee chairman Ernest "Fritz" Hollings (D-S.C.). He favors splitting the Bells into wholesale and retail operations.