Small Businesses Wary of Telecommunications Bill

After talking about it since January, lawmakers who oversee telecommunications finally floated a draft bill to overhaul the nations telecom rules, primarily by preventing emerging broadband services from being saddled with legacy telephone requirements.

The hands-off approach is favored by the long-entrenched service providers, such as the RBOCs (Regional Bell Operating Companies), but it is not fully embraced by all users, particularly small businesses.

The 77-page draft bill authored by the U.S. House Committee on Energy and Commerce places DSL, cable modem and other broadband services in a common, lightly regulated category and attempts to prevent access providers from discriminating among content and application providers.

However, for the entrenched telephone carriers, such as Verizon Communications Inc. and SBC Communications Inc., which still dominate local telephone markets and are poised to purchase the largest long-distance carriers, the bill does not go far enough in eliminating regulations. As their primary lobbying agenda item in this Congress, they see this telecom overhaul as an opportunity to dismantle the obligations imposed over decades to ensure consumer protection.

In the view of Tom Tauke, former congressman from Iowa and top lobbyist for Verizon, Congress should leave competition to the marketplace and follow the cable model in considering broadband services.

"The draft shows that the government-knows-best mentality is still among us," Tauke said. Speaking last week at a forum sponsored by The Progress & Freedom Foundation, in Washington, he said that an unspecified provision on network build-out requirements will create difficulties for new providers entering a market.

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The entrenched providers are trying to persuade policy-makers to craft legislation based on the premise that the marketplace is working fine and that regulators should intervene only to adjudicate complaints. "The proper role of government is to simply referee," Tauke said.

Proponents of telecom deregulation are buoyed by the U.S. Supreme Courts decision this year upholding a Federal Communications Commission decision that, unlike traditional telephone carriers, cable companies do not have to make their networks available to competitors on a nondiscriminatory basis.

User advocates, however, are not entirely satisfied with the cable model of regulation.

"Do we want to replicate the cable business for broadband?" asked Gigi Sohn, president and co-founder of Public Knowledge, a Washington nonprofit telecom advocacy group. "That is profoundly consumer-unfriendly. There can be a light regulatory touch that deals with core issues."

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