Telcos Lobby for Expanded Broadband Role

As businesses continue to clamor for better broadband access in rural areas, the government has been left in the odd position

As businesses continue to clamor for better broadband access in rural areas, the government has been left in the odd position of being both a champion of, and hindrance to, telecommunications deployment efforts.

The dichotomy, which has federal regulators mulling carriers expansion plans even as politicians promote incentives for new services, has left the industry and its users in a two-horse race with no clear favorite. Whether the government can help most by taking a more active role in promoting broadband expansion or by simply getting out of the way largely depends on which segment of the telecom industry you ask.

At last weeks gathering here of the U.S. Telecom Association—the lobbying group for ILECs (Incumbent Local Exchange Carriers)—industry officials made their case for easing the restrictions they say are stifling broadband expansion to rural areas.

"From the perspective of a company that has employees scattered in rural areas, broadband has not been adequately deployed," said Peggy Davis, who manages network technology for Paccar Inc., in Bellevue, Wash. "We have dealerships in rural areas, and while some are large enough to use frame relay or T-1, others have to use dial-up."

For Paccar, which sells trucks from far-flung dealerships ranging from Alaska to the Ozarks, efficiently connecting dealers, remote workers and telecommuters requires more high-speed data options.

The long-entrenched local telephone companies are trying to convince lawmakers that they can best spread such advanced data services to all reaches of the country by using existing facilities. However, the telcos are barred from providing long-distance—that is, interLATA—data services without approval from the Federal Communications Commission, which also must grant its consent before they can provide long-distance voice services. The FCC demands that a telco must first open its local market to competition before it is granted permission to enter other markets.

The FCCs chairman, Michael Powell, last week at the conference cautioned USTA members against lobbying his agency for more regulatory relief than Congress has already authorized. "There are [rules] I know are wrong in my own heart and mind, but they were passed by Congress," Powell said. "If I want to legislate, I can go run for office."

So instead, the industry has lined up an imposing cadre in the U.S. House of Representatives this year to help it clear regulatory obstacles out of its data delivery path.

At the USTA meeting, several key House members from both parties sympathized with the groups efforts to move further into the advanced data services market. Rep. John Dingell of Michigan, the ranking Democrat on the Commerce Committee, said he and Committee Chairman Billy Tauzin, R-La., will reintroduce legislation that calls for allowing incumbent telephone companies to provide long-distance data services, which withered in the last Congress for lack of support.

"This is our best hope for giving a real shot in the arm to the New Economy, to e-commerce," Dingell told ILEC executives. "Its my hope that with your help we can put the American economy back on track."

But the incumbents chief competitors—new entrants to the local exchange arena that are funded by long-distance carriers—are fighting the incumbents efforts to provide long-distance broadband.

"Businesses only concern is a competitive market, and the only issue is how we get there," said Colleen Boothby, attorney for the Ad Hoc Telecommunications Users Committee, in Washington. "The question is: Are you sacrificing the development of a competitive market for more rapid deployment if you let the BOCs [Bell Operating Companies] loose?"

According to Rep. Rick Boucher, D-Va., who serves on two committees addressing broadband concerns, the Tauzin/Dingell legislation should be a slam-dunk on the House floor, where it is likely to pass early in the session.

"[And] its pretty clear we have a president who would sign this bill, and strong momentum in the House can have a positive effect on it in the Senate," Boucher said.

The Senate, however, may have other ideas for promoting broadband services in rural areas, and it is far from certain the ILEC initiative will find sufficient support in the upper chamber. Senators are focusing on tax incentives, loans and subsidies to encourage the broadband build-out. Among the alternative ideas floating in the Senate are several bills introduced by Sen. Hillary Rodham Clinton, D-N.Y., who is pushing for state and local government bond offerings and other incentives.