Broadband Rivals See Victory

RBOC, long-distance camps claim Bush comments back their cause.

Trying to read the smoke signals billowing from the Bush administration last week for clues about the federal governments plans for promoting broadband services, each telecommunications camp saw a victory for its side.

RBOCs (Regional Bell Operating Companies) and their rivals, including the major long-distance companies and Competitive Local Exchange Carriers, have been locked in a legislative battle for two years over the future of regulations governing data services. The RBOCs want the government to eliminate requirements forcing them to give rivals access to local networks at regulated terms, which they consider unfair. The RBOCs secured support in the U.S. House of Representatives in the form of a bill sponsored by Reps. Billy Tauzin, R-La., and John Dingell, D-Mich.

The bill is stuck in limbo, however, because of stiff opposition in the Senate, where critics view it as a way to reduce competition by preventing rival service providers from gaining access to customers.

Throughout the heated debate—which is periodically punctuated by radio and newspaper advertisements—the White House has remained quiet and noncommittal. Last week, however, at an economic forum in Waco, Texas, President Bush spoke at length about broadband and its importance to the economy.

"In order to make sure the economy grows, we must bring the promise of broadband technology to millions of Americans. My administration is promoting investment in broadband," Bush said. "But government at all levels should remove hurdles that slow the pace of deployment."

Bush said that the White House will work to prevent new access taxes on broadband, and he noted that the Federal Communications Commission is considering policies to encourage high-speed Internet services. He did not say, however, whether he supports eliminating rules forcing the RBOCs to allow rivals to use local networks at regulated terms.

"The statement was worded vaguely enough to appeal to a lot of constituencies," said Patrick Brogan, an analyst with The Precursor Group, in Washington. "Its a very divided issue, and there are so many constituencies. I cant say its clear to me where the White House stands."

Nonetheless, the RBOC and the long-distance camps raced to shape victory out of Bushs words. AT&T Corp. emphasized the comment regarding investment, seeing it as support for promoting competition among carriers.

"President Bush has struck the right chord today in his recognition that the keys to expanding investment in broadband technology is to ensure robust competition and create demand," said Washington-based AT&T spokeswoman Claudia Jones in a prepared statement. "We look forward to being part of the discussion about the best ways to spur broadband demand, create competition and ensure that the right broadband policies are in place to help the economy grow."

Meanwhile, BellSouth Corp. deciphered the presidents words to mean support for doing away with regulations targeted at RBOCs.

"The presidents declaration today is most welcome," said Hershel Abbott, BellSouth vice president for governmental affairs, in Washington. "It demonstrates the growing realization in official Washington that the same rules ought to apply to every company that offers broadband high-speed Internet access services to the American public."