Bells Win Round 1

By Caron Carlson  |  Posted 2002-03-12 Print this article Print

The major local telephone companies succeed in securing a victory in the U.S. House of Representatives with the passage of the Internet Freedom and Deployment Act, known as the Tauzin-Dingell bill; now lobbyists are gearing up for a tough Senate battle.

In one of the most aggressive lobbying campaigns in recent Washington memory, the major local telephone companies succeeded late last month in securing a victory in the U.S. House of Representatives with the passage of the Internet Freedom and Deployment Act, known as the Tauzin-Dingell bill.

The RBOCs (Regional Bell Operating Companies)—Verizon Communications Inc., SBC Communications Inc., BellSouth Corp. and Qwest Communications International Inc.—are now escalating the lobbying battle in the Senate, but key senators overseeing telecommunications have denounced the bill in terms ranging from subtle to profane (Commerce Committee Chairman Ernest Hollings, D-S.C., described it last month as "blasphemy"). The opposing camp, made up primarily of long-distance companies, CLECs (Competitive Local Exchange Carriers) and independent broadband providers, is bracing for the next round of lobbying.

Politics aside, the legislation sponsored by Reps. Billy Tauzin, R-La., and John Dingell, D-Mich., would eliminate regulatory barriers that the RBOCs argue discourage them from building out their broadband infrastructures. Federal Communications Commission rules ban the Bells from providing long-distance services in their local markets until they satisfy regulators that their markets are open to competition. In addition, the FCC regulates the rates that Bells charge competitors to lease last-mile connections. The Tauzin-Dingell bill would exempt broadband services from those restrictions.

If the Bells cant overcome the weighty opposition in the Senate, they may gain relief from the FCC. Early last month, the FCC proposed rules that could change the regulatory categorization of broadband services offered by the Bells, treating them not as the traditionally regulated telecom services but as information services, which are subject to far less federal oversight.

Following the House vote Feb. 28, BellSouth Vice President Herschel Abbott said the measure would enable the company to expand its data network. "Having this sort of connectivity will pave the way for the high-tech industry to begin a new burst of innovation and help the nations economic recovery," Abbott said, in Atlanta. The other Bells greeted the news with similar positions.

Not all Bell customers are enthusiastic about the prospect of relieving incumbent carriers from competitive obligations. "This one worries me," said Kevin Baradet, network systems director at Cornell Universitys Graduate School of Management, in Ithaca, N.Y., and an eWeek Corporate Partner. "If they can set co-location [and leased-line] rates for other providers, they can make it so the competitors cant make any money."


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