Bells finally get their bid for deregulation before House

Wednesday, February 27th 2002, 12:00 am

By: News On 6

(WASHINGTON) - Four regional Bell telephone companies worked years and laid out millions of dollars for advertisements and campaign contributions trying to win the right to sell long-distance Internet services without opening their networks to competition.

Now they're about to find out whether the effort was worth it.

The House on Wednesday was considering a bill that essentially would allow the Bells - Qwest, Verizon, SBC and BellSouth - to sidestep key provisions of the 1996 Telecommunications Act, which required them to open their markets to competition before they could provide long-distance service.

Upstart Internet providers and big long-distance players like WorldCom and AT&T, which also owns cable TV companies, oppose the legislation, contending that the Bells are trying to dominate the Internet access field the way they do local phone service.

But supporters of the bill, authored by Reps. Billy Tauzin, R-La., and John Dingell, D-Mich., say it would increase competition among so-called broadband providers, boosting quality and lowering prices, and bring the service to more rural areas.

``It essentially says to state and local government that you can regulate telephone all you want, but keep your hands off the Internet,'' Tauzin said, claiming that the bill would help create more than 1.5 million jobs.

Relatively few of the nation's Internet users subscribe to high-speed Internet access, which is mostly provided by cable TV companies. The service typically is offered in high-density and metropolitan areas.

These connections, dozens of times faster than the standard telephone dial-up that most people use, make it possible for consumers to download huge data files quickly or watch videos on their computers.

The two sides have accused each other of holding up the arrival of next generation of Web service to homes and stifling the Internet economy, spending more than $10 million on nationwide newspaper, radio, television and online pitches.

``The good news is that the Tauzin-Dingell ads will stop after this,'' Tauzin said, referring to the common name for the bill.

Rep. John Conyers, D-Mich., one of the leading opponents of the measure, doubted Tauzin's employment numbers.

``Without the current rules, many competitors will be forced into bankruptcy and many start-ups will close,'' Conyers said. ``How that results in new jobs is a very interesting concept.''

House Republicans on Tuesday narrowed the number of amendments that could be added to the bill, fighting to help its future. An almost identical bill failed to reach the House floor last year.

One amendment, championed by Conyers and Rep. Chris Cannon, R-Utah, would preserve state authority to regulate the Internet services sold by the Bells and ensure that Bell competitors maintain access to existing lines.

``There is not a single competitor that supports the bill,'' Cannon said.

At least one amendment, supported by the Federal Communications Commission, is expected to pass easily.

That change would increase the fines the Federal Communications Commission could impose on the Bells. Current fines for violating telecommunications law are capped at $1.2 million per violation. Under the amendment, that cap would jump to $10 million, or $20 million for repeat offenders.

The Bells argue that they need the change because they are regulated by the FCC and individual state boards. Cable Internet providers are not, and the Bells _ which provide a competing high-speed service called Digital Subscriber Line _ say that's unfair.

The cable TV companies counter by saying the telephone network was subsidized by the government. Cable lines, on the other hand, were financed completely by private investment.

In the past two years, many competitors entered the DSL market to sell high-speed service and connect to the Bell lines. But a large number of them, including Covad, Winstar and Northpoint, have filed for bankruptcy or gone out of business entirely.

A proposed amendment would protect the competitors' access to existing high-speed access. The competitors say that change would protect the present market, but throw future markets into question.

Even though the bill is expected to pass the House, it faces a tougher time in the Senate. Both Senate Commerce Committee Chairman Ernest Hollings, D-S.C., and ranking Republican John McCain of Arizona oppose the measure.

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The bill is H.R. 1542.

On the Net:

Congress: thomas.loc.gov

Anti-bill Voices for Choices: www.voicesforchoices.com

U.S. Telecom Association: www.usta.org