Round one in the battle of the broadband titans goes to the Bell Operating Companies, whose mammoth lobbying effort over the past year secured them a victory on the House floor yesterday with the passage of the Internet Freedom and Deployment Act, also known as the Tauzin/Dingell bill.
The opposing camp, led by long-distance carriers and competitive local exchange carriers, is further mobilizing to make sure the measure does not roll through the Senate as well. Although 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 this week as "blasphemy"), the Bells are expected to press the Senate to take up the House bill in conference.
Politics aside, the legislation would eliminate regulatory barriers that the Bells argue discourage them from building out their broadband infrastructure. Current FCC rules ban them from providing long-distance services in their own local markets until they satisfy regulators that their markets are open to competition. Additionally, the FCC regulates the rates that Bells charge competitors to lease "last-mile" connections. The Tauzin/Dingell bill would eliminate broadband services from those restrictions.
Following yesterdays vote, BellSouth Vice President Herschel Abbott said in a prepared statement that the measure will give the company the ability 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.
Not all Bell customers are enthused by the prospect of relieving the incumbent carriers from competitive obligations, however. "This one worries me," said Kevin Baradet, network systems director at Cornell Universitys Graduate School of Management and eWeek corporate partner. "If they can set collocation [and leased-line] rates for other providers, they can make it so the competitors cant make any money."
Others worry that once relieved of competitive obligations, the Bells may not make the expansive broadband investments theyve told lawmakers they plan to make. Although the incumbent carriers had digital subscriber line technology more than a decade ago, they did not begin deploying it in earnest until after the Telecommunications Act of 1996 spurred a myriad of CLEC DSL providers into business.
"The RBOCs may not elect to deploy the capital to upgrade their networks," said David Schaeffer, CEO of Cogent Communications Inc. in Washington, D.C. "Ultimately [the bill] is somewhat anti-competitive. I think it means fewer choices and higher prices."
The measure has gained notoriety for the huge sums of money both camps have spent on lobbying, including radio, television and newspaper advertising, over the past year. For some telecom users, the brazen and astronomical politicking behind this legislation casts it in an unfavorable light. "Once the vote goes down, Id like to see next to each of their names how much each has been paid by the telcos," Baradet said.