New Congress, Same Deregulation Issues

Impact on telecom policy, RBOCs push awaited as GOP takes the reins in Senate.

The GOPs gains in Congress this election are likely insufficient to cause major upheavals in telecommunications policy, but the slight Republican majority in the Senate could boost deregulatory efforts of RBOCs.

And because Regional Bell Operating Companies still control the vast majority of the local telephone market six years after the passage of the landmark Telecommunications Act, opponents of deregulation say that would reduce competition.

The most evident change in the dynamic on Capitol Hill will be seen in Senate committee chairmanships, which will revert to Republicans after a year of Democratic control. For the most part, to pass any new laws, the Senate will continue to have to work in a bipartisan fashion because the majority remains exceedingly thin, but Republican-driven measures now have a greater chance of at least coming to a vote.

In the telecom realm, the 107th Congress (which returns for a brief lame-duck session) devoted much of its agenda to the so-called broadband deployment initiatives brought by RBOCs. Although the House in February passed the Tauzin-Dingell bill, which would release incumbent carriers from some obligations to lease portions of the local network to rivals at regulated rates, the measure was stymied in the Senate by commerce committee Chairman Ernest Hollings, D-S.C.

In the 108th Congress, Sen. John McCain, R-Ariz., will take back chairmanship of that committee. While McCain has not voiced a strict position on the deregulatory initiative, he is also not a vociferous critic of RBOCs. But even with potentially more support—or at least less antagonism—from the commerce committee, RBOCs are likely to find it hard to rally votes for the controversial proposal.

"It never gets easier in the next Congress. It always gets harder. You develop a Sisyphus complex," said Julian Epstein, former minority chief counsel and staff director for the House Judiciary Committee. Speaking at a roundtable hosted by the Competitive Telecommunications Association in Washington last week, Epstein said many House members who voted for the Tauzin-Dingell bill did so reluctantly and will be even more reluctant to vote for a similar measure in the next Congress.

"The last thing I think the White House wants to get bogged down with are a bunch of distractions," Epstein said. "This [telecom initiative] does not fit into their agenda in any way. It divides their party, and it divides our party."

The Republican majority gives President Bush greater power to drive his agenda, but controversial telecom legislation is unlikely to emerge near the top. The White House is likely to try to keep its message simple and focus on priority issues that are achievable, said Steve Perry, CEO of The Dutko Group Inc., a lobbying company, in Washington.

Advocates of RBOCs rivals (known as CLECs, or Competitive Local Exchange Carriers) say they are not very worried, even though they have lost a powerful ally at the helm of the Senate commerce committee. Russell Frisby, president of CompTel, said the election has not significantly changed the landscape in Congress. "You will see the same old battles and a similar dynamic as in the last session," Frisby said, adding that the arena to watch is the Federal Communications Commission, which is deliberating over several proceedings that could affect CLECs ability to compete.

Unlike Hollings, McCain is not a vocal critic of the FCCs own deregulatory proposals, which analysts at Legg Mason Inc.s telecom group, in Washington, said they see as providing greater leeway to FCC Chairman Michael Powell on a deregulatory agenda.