The fight for control of the telecommunications networks that are the lifeblood of the Internet may be brewing in Washington, D.C., but its shaping up in the tradition of good ol boy Louisiana politics.
At the heart of the battle is the powerful new chairman of the House Energy and Commerce Committee, Rep. Billy Tauzin, R-La., a small-town Democrat-turned Republican who has built his political career with the help of close personal and financial ties to the regional Bell monopolies.
They and other telecom players have poured millions of dollars into the campaigns that brought Tauzin from the bayous of Chackbay, La., to Washington. Industry groups have also taken him on more trips than any other member of Congress. And just last year, they helped him raise $8.8 million for the House Republican colleagues who this year crowned him the telecom king.
Now Tauzin controls the legislative channel through which virtually all telecom and Internet law must navigate over the critical next two years — from phone service and the wireless broadband world of the future to Internet taxation and online privacy.
“This guy is going to determine what the Internet looks like for most people,” said Jeffrey Chester, executive director at the Center for Media Education, a public interest group. “The real threat here is that Tauzin, while giving lip service to the public interest, has only one group giving him cold, hard cash.”
What Tauzin especially wants to do is change the landmark Telecommunications Act of 1996, which was designed to open local phone markets to competitors, allow the incumbent Bells to offer long-distance service and generate competition in everything from digital video programming to data transmission. Tauzin wants to move quickly to free the Bells from restrictions on their long-distance phone and data services. Just as important, he yearns to strip the Federal Communications Commission of its authority to quash telecom mergers and to regulate telephone companies and Internet and wireless service providers.
The question is not whether Tauzin will use his hard-won new power to try to achieve his goals. He will. After all, thats what committee chairmanships are about. What most concerns an array of industry executives and consumer advocates is whether Tauzin intends to use that power to benefit the Bell companies, broadcasters and others with whom he has long had a cozy relationship — at the expense of their corporate competitors and consumers.
The flamboyant, Cajun-born amateur actor and outspoken congressman learned hardball politics at the feet of a man who has come to symbolize, for many, the worst of Louisianas insider politics — former governor Edwin Edwards — thrice indicted and recently convicted of bribery. But Tauzin insists he is his own man. He said his positions on regulatory issues and telecom law are not influenced by his close ties to the regional Bells, but the desire to bring the public more choices and lower prices.
“The most important motivation I have in all of the policy decisions were going to try to make is to make an open, free, competitive communications marketplace,” Tauzin said in an interview the day he took charge of the committee. “That means keeping government out of the business of regulating the Internet, particularly as we go broadband with services that will include not just regular data, but video and voice as well.”
Still, people in Washington are watching to see where Tauzin throws his Mardi Gras beads.
Depending on who is talking, Tauzin is many things. He is charming to the point of roguishness, a skilled lawyer who understands the nuances of political power. He is passionate about telecommunications and knows the subject better than almost anyone in Congress. He is a Beltway player who is unabashed about his ties to the industries he legislates.
And those ties run deep. Tauzins oldest son is a state lobbyist for BellSouth in Louisiana. His daughter used to lobby for the National Association of Broadcasters, another powerful trade group. Staffers have come to him from telecom lobbying jobs, and his chief of staff went to work at the regional Bells industry group. His new committee telecom counsel used to represent the Bells at a top Washington law firm.
Tauzins most influential political mentors include Edwards, now appealing the federal conviction for bribery that brought him a 10-year prison sentence. But even critics said Tauzin hews to the rules, although he sometimes strays close to the ethical line.
And whatever Tauzin does, said those who know him well, he plays to win, whether at hunting, tennis or making law.
His game this year is to free the Bells from the regulatory shackles imposed by the 1996 Telecommunications Act. That massive law, 10 years in the writing yet ambiguous in its final form, was aimed at remaking the entire American telecommunications landscape.
Much of its language sought to tear down court-imposed barriers on the regional Bell operating companies that kept them out of the then-lucrative long-distance business. The law also set out to pry open the local phone marketplace and let companies such as AT&T and new competitors offer local service. At the time it was hoped that the law — so sweeping that it included a ban on Internet pornography and new protections for a handful of burglar alarm monitoring companies — would quickly lead to a marketplace in which myriad companies could sell bundled services, such as telephone companies offering television programming and high-speed Internet connections.
By most accounts, however, the law has not achieved the open, robust competitive market in most areas. Broadband connections are rare to most homes, few consumers have a choice of local phone service and the Bells have won permission to offer long-distance in only four states.
Tauzins declaration that he wants an immediate change to that stalemate is a prospect that thrills the Bells, which believe they have been unfairly blocked from their prized markets by powerful competitors and a Democrat-controlled FCC.
“We are pleased that well at last get a chairman [who] will give us a hearing,” said Gary Lytle, acting president of the United States Telecom Association, the powerful industry group that represents the regional Bells on Capitol Hill.
But Tauzin terrifies their competitors, who think they will be crushed by the Bells if the rules are changed. Foes include AT&T, consumer groups and Internet players that view the Bell companies as virtual monopolies that still own the electronic pipes into most American homes.
“The act was intended to pry open the local phone market,” said C. Michael Armstrong, chief executive of AT&T, in a recent speech. But after five years, the Bell companies remain monopolies that —still have a tight grip on Boardwalk, and theyre closing in on Park Place.”
Those same monopolies are the ones that have used their political and financial clout to nurture Tauzins 20-year congressional career, ultimately, critics said, handing him the committee crown.
The Bells have contributed millions of dollars to Tauzin and the GOP through events he organized. They have supplied him with transportation on their corporate jets and paid his travel expenses for excursions across the country and around the world. He has taken frequent hunting trips with Bell executives.
In last years election alone, using political action committees and contributions from employee groups and individuals, the remaining four Bells — BellSouth, Qwest Communications International, SBC Communications and Verizon Communications — poured $55,200 into Tauzins personal campaign coffers; in fact, he was the top recipient of money from those interests. All told, Tauzin received $190,744 from communications and electronics industry interests in the election cycle, besting even House Speaker Dennis Hastert, R-Ill., and trailing only two other House candidates.
The telecom money was part of the whopping $1.3 million that Tauzin raised for the race in his home district. Campaign records show Tauzin funneled a sizable amount of that money, $565,704, to help fund political campaigns of his Republican friends on Capitol Hill, a move that helped him beat Rep. Mike Oxley, R-Ohio, for the Commerce Committee chairmanship.
Political players in Louisiana, such as Tauzin friend Sam Jones, mayor of Franklin, said Tauzin needed little more than a few yard signs to defeat the three independent candidates who ran against him. “It was like Curly, Larry and Moe was the opposition,” said Jones, a Democrat who said he once considered running against Tauzin.
Trey Ourso, executive director at the Louisiana Democratic Party, said he believes he could field a candidate who could beat Tauzin in his home district, which is full of registered Democrats. “But the amount of money he can raise makes it almost impossible to put anyone against him,” Ourso said.
John McGinnis, who writes a political insiders newsletter in Baton Rouge, La., disagreed that Democrats could find someone to beat Tauzin, whom he described as having a “magnetic personality” and ability to charm voters. The numbers speak for themselves: Despite infrequent appearances in his district and election night commitments that kept him out of Louisiana, Tauzin won 78 percent of the vote.
But like others, McGinnis also recognizes the impact that Louisiana-style politics have had on the congressman when it comes to taking money from entities and individuals who can profit from his attention.
“Within Louisiana politics, thats pretty well understood,” said McGinnis, who is one of those who have watched the grooming of Tauzin by his supporters. “Herschel Abbott [president of BellSouth in Louisiana] has been close to Billy for a long, long time.”
Tauzin managed his metamorphosis from conservative Southern Democrat to Republican in 1995 with little or no political fallout in his home district in the bayous west of New Orleans. House Republicans had made good on their promise that they would honor his seniority when he switched, placing Tauzin far closer to a real seat of power than he ever could have hoped to get as a conservative Democrat.
Reaching for Power
Reaching for Power
But most important, his political supporters — particularly within the telecommunications industry — had assured him and his aides of copious financial backing.
Almost immediately after Tauzins party switch in 1995, as the Telecom Act was being finalized, Republican leaders rewarded him with the chairmanship of the Commerce Committees Telecommunications subcommittee. But Tauzin faced a major roadblock in his efforts to smooth the way for the regional Bells — Tom Bliley, R-Va., who was chairman of the committee at the time. Bliley was a champion for AT&T and went so far as to deny Tauzin a seat on the conference committee that rewrote much of the act.
With Blileys impending retirement — and access to millions of dollars to spread to his Republican Party colleagues — Tauzin focused last year on winning the most crucial prize of his political life, the committee chairmanship.
Flush with good fortune as Mardi Gras rolled around a year ago, Tauzin took a moment to go after another chairmanship. Although his fellow representative, Chris John, D-La., was in line to take charge of the delegations annual February gala — known as the Washington Mardi Gras — Tauzin pulled rank on him. That gave Tauzin the opportunity to show his respect and affection for Abbott, a longtime political ally and a man whom Louisiana insiders see as instrumental in Tauzins success. Tauzin appointed him “king” of the event.
Six months later, Tauzin again picked Abbott to reign at a similar function, the showy, $400,000 blowout party to honor Tauzin during the Republican National Convention in Philadelphia. BellSouth and other big telecom players picked up the tab.
A few days later, another longtime Tauzin mentor, Sen. John Breaux, D-La., would fete Abbott a third time — tapping him to preside at the “Mardi Gras Goes to Hollywood” celebration at the Democratic National Convention in Los Angeles.
To Louisiana political watchers and to some former BellSouth executives and industry insiders, Tauzins Southern courtesy toward Abbott reflected the profound influence of the industry he regulates.
“From the minute he got here, he was BellSouths guy,” said Andrew Schwartzman, director at the Media Access Project, a consumer interest group. “And if youre a hired gun, after long enough, you think youre right. I dont know when Billy came to think that, but hes been viewing the world through the BellSouth telescope since he got here.”
Bunk, Tauzin said.
“Im not now nor have I ever been influenced by who makes those contributions to my party or to me personally,” Tauzin said. “If the Bells, AT&T, anyone else comes to me with a proposal that moves in the direction of more regulation instead of more open markets, they will not find a friend here. Im not about that. People contribute to me, I hope, I expect, because they like the work I do. I dont do the work I do because they contribute to me. Thats a big difference. And if you cant make that distinction, you dont belong here.”
Tauzin is proud of the fact that he raised $8.8 million for his political party last year, including a March dinner that brought in $7.2 million for Republican efforts to keep their majority in the U.S. House.
“Hes the kind of guy who understands hes got to have a lot of friends, and hes got to help his colleagues out there,” said Ward White, a BellSouth lobbyist and former USTA official who hunts with Tauzin on Marylands Eastern Shore. “He would sponsor fundraisers for individual members, and call up and get people he knew to attend. And if they were friends of Billy, they attended.”
Tauzins longtime spokesman and friend, Ken Johnson, said everything his boss has done is legal and conforms to all the ethical rules of campaign fund-raising. After all, Tauzins business is politics, and in politics one must raise money to campaign for election, Johnson said.
Free at Last
Free at Last
Regardless of his possible motives or the roads he took to get there,Tauzin is finally positioned to throttle the FCC and free the Bells to enter national markets for both phone and data services.
And even political opponents say Tauzin comes to the issues with more than a simple agenda to make his campaign contributors happy.
“He is very smart, and very gifted verbally,” said one high-ranking Democratic staffer. “There are very few members of the committee who understand the issue and can speak in full paragraphs without tripping over acronyms and reading off a sheet of paper.”
Still, Tauzin cant do whatever he wants, nor do it without Democratic support and cooperation in the Senate, because the issues remain contentious, and all sides have friends in powerful places.
Insiders say Sens. Ted Stevens, R-Alaska; Ernest Hollings, D-S.C.; and Majority Leader Trent Lott, R-Miss., will lead the charge for a more balanced revision of the telecom act.
Former Rep. Rick White, R-Wash., who served with Tauzin and co-founded the Congressional Internet Caucus, agreed. “Billy is a powerful advocate, but he cant get everything done by himself,” White said. “But Billy is one of the smartest guys in Congress.”
Intelligence alone has not boosted Tauzin into his powerful position. His career has been shaped by Louisiana politics that rely upon loyalty, friendship and favors.
Former Louisiana governor Edwards, who talked to Interactive Week on the day a federal judge ruled he did not have to report to a Texas prison while appealing his conviction, acknowledged his role as mentor to Tauzin. Edwards said he believed in Tauzin, and that he worked hard to help him get elected and find political allies.
“I dont know that now Billy would necessarily want me commenting on his political career, given my circumstances,” Edwards said. “Would you want Al Capone talking about what a good politician you are?”
Tauzin said he was saddened by the criminal turn in Edwards career and that “if hes made mistakes, hell pay for them.” But he also acknowledged his debt to Edwards. “Whatever you want to say about his later administrations, his first administration, the one I worked in, was very, very reform-oriented,” Tauzin said.
— Bayou Style”>
Connected — Bayou Style
Still, the seemingly incestuous connections that might raise eyebrows outside of Louisiana run deep with Tauzin.
In 1999, BellSouths Abbott endorsed Billy Tauzin III for a job as one of the state external and regulatory affairs officers in Louisiana. Those who know the younger Tauzin say he has a sound political sense, learned from his father. He earlier sold cell phones for Bell Atlantic in Washington.
The younger Tauzin said his appointment was “very forthright and well-publicized in Louisiana.” While he lobbies the state legislature, where his father got his political start, he insisted, “I never talk to my father about telecommunications.”
Until recently, Tauzins daughter, Kimberly, was a lobbyist for the NAB, another powerful entity that courted favor with Tauzin and made sizable campaign contributions to Tauzin while he was chairman of the House Telecommunications subcommittee.
Other ties abound. His former chief of staff, Wallace Henderson, came to Tauzins office in the early 1980s from the Cellular Telecommunications Industry Association — which recently changed its name to the Cellular Telecommunications & Internet Association — and is now a lobbyist for the Bell-dominated USTA.
It was Henderson who originally steered Tauzin toward telecommunications when he first came to Congress. Tauzin said a visit to one of the first satellite TV conventions in Omaha, Neb., left him “fascinated” with the issue. “I just fell in love with the whole concept of technology and communications and began working on that on the committee for that reason,” he said.
Henderson is not the only key Tauzin staffer to perform the Beltway dance, moving between the Hill and industry groups with which they have dealt during their congressional stints.
Late last year, when it was clear he had the inside track for the Commerce Committee chairmanship, Tauzin hired Jessica Wallace as his staff counsel and recently named her to oversee telecommunications issues for him as counsel to the Commerce Committee. Wallaces previous post was at the prominent lobbying law firm Verner, Liipfert, Bernhard, McPherson and Hand, where her telecommunications clients included BellSouth and SBC.
With Tauzins backing, Dan Mattoon, BellSouth vice president for congressional affairs, was named to the National Republican Congressional Committee to ramrod fund-raising, Mattoon helped Tauzin with a dinner last March that raised $7.2 million for the GOP. Big-name contributors — sponsorships started at $100,000 — included AT&T, Bell Atlantic, BellSouth, SBC and others that got a seat at the head table with Tauzin.
Tauzin also likes to spend leisure time with lobbyists. He spends considerable time hosting Bell lobbyists and fellow lawmakers at his 233-acre retreat in the marshlands of Maryland that he bought for $165,000 in 1993 and uses for hunting and fishing. Tauzin said he simply enjoys hunting and does it as a retreat from the pressures of Capitol Hill. “I do it for me,” he said. “Anybody else wants to join me, theyre welcome.”
The hospitality works both ways. The Center for Public Integrity last year identified Tauzin as the member of Congress who has accepted more industry-sponsored free trips than anyone else — a total of 42, worth $77,000, in four years. Among them was a visit to Paris with his wife and a son for a week before Christmas, 1999. Instinet, the online stock brokerage subsidiary of Reuters that announced its plans to go public that week, paid for the airfare and three days food and lodging. Time Warner, just three weeks before announcing merger plans with America Online, paid for the rest, according to official records filed by Tauzins office.
Despite the long list of ties to industry, Tauzin strongly disputed any suggestion that they influence his views or votes. Tauzin said anybody examining his record of more than 30 years of politics, from the Louisiana House to the U.S. Congress, would conclude that he is independent.
“The cable industry has always been a big supporter of mine. Who took on the cable industry in 1992 to help create satellite television” Who stood up on the floor and fought everybody — the leadership of both parties, the Rules Committee, the leadership of the Commerce Committee? Cable has, was before and has since been a supporter of my efforts here. But I took them on when I thought they were wrong. And Ill take on the Bells when I think theyre wrong. Ill take on anybody if I think theyre wrong,” he said.
Washington opponents, however, insisted the ties are the outward signs of strong influence bought by contributions.
“Billy is clearly going to be the quarterback who helps the Bell interests reach their objectives,” the CMEs Chester said. “He may yell at them during hearings, but theyll be sharing a Dixie beer and a bowl of gumbo over at his house later that night.”
Cajun at Heart
Cajun at Heart
In Louisiana, friends said, Tauzins personal charisma and outgoing nature are characteristic of his Cajun background.
Tauzin came to politics on his own, according to his backers. His father and grandfather were electricians in the bayou. He grew up as an avid hunter and fisherman, with a theatrical flair. He went to Nicholls State University in Louisiana, where he dabbled in theater, and later to the University of Louisiana, where he earned a law degree.
Marie Bergeron, a now-retired radio reporter and personality from Thibodeaux, La., met Tauzin when he was in student government in high school and she interviewed him.
“He stood out even then,” Bergeron said. “I followed him for years. People just love him. I remember when I needed a guest on my radio program and didnt have one, Id go out on the balcony, which was over the town square, and look for Billy. He never hesitated. “Hold on,” hed yell. “Ill be right up.”
She also watched as Edwards, whose political career ended in scandal, shepherded Tauzins political career.
Tauzin was Edwards floor leader in the Louisiana Legislature when Edwards succeeded in forcing a constitutional convention that made sweeping political and social reforms in Louisiana. Tauzin and Edwards former assistant and adviser, Breaux, were as close as anyone to the former governor.
Bergeron and others said there was fallout later between Tauzin and Edwards after Tauzin, already in Congress, jumped into the 1987 race for governor, believing that Edwards would not run again. When Edwards did get into the race, it eroded Tauzins power base and he lost. That set the stage for Tauzin to remain in Congress and pursue a different kind of power.
“They are both smart, charismatic guys,” Tauzin aide Johnson said of his boss relationship with Edwards. “But theres one big difference: Billy Tauzin plants tomatoes in his back yard, not mason jars full of cash.”