|Published by NetAction||Issue No. 22||December 12, 2001|
----- Do not circulate this alert after December 13, 2001 -----
Contents of this alert:
NetAction is urging Internet users to contact their member of the House of Representatives and urge them to vote "no" on H.R. 1542, the Internet Freedom and Broadband Deployment Act of 2001. Backed by the local Bell monopolies, this bill would eliminate a key consumer protection in telecommunications. It poses a threat to the continued deployment of affordable broadband and dial-up Internet services, both of which are crucial to bridging the digital divide. The House of Representatives may vote on the bill later THIS WEEK. Call committee members TODAY to urge them to vote "no" on H.R. 1542.
H.R. 1542 would free the four remaining Bell phone monopolies from their obligation to open their networks to competitors. Rep. Billy Tauzin of Louisiana, who co-authored H.R. 1542 with Rep. John Dingell of Michigan, has been pushing for a House floor vote before Congress concludes its business for the year.
H.R. 1542 has nothing to do with Internet freedom and will not promote broadband deployment. What it will do is eliminate a key consumer protection that Congress included in the Telecommunications Act of 1996: the requirement that the Bells open their local phone markets to competition before they are allowed into the long distance markets. Although this requirement is the only incentive the Bells have to treat their customers and competitors fairly, H.R. 1542 would waive this requirement for long distance data markets.
Ludicrous as it sounds, Tauzin claims that this will ensure meaningful competition. But it won't. H.R. 1542 will put the four remaining Bell monopolies in control of the nation's telecommunications and technology infrastructure, threatening the future deployment of both broadband and dial-up Internet access and of competitive telephone service. The result for consumers would be less choice, lower quality service and higher prices for everything from basic phone service to Internet access. This is already a problem for DSL users. As reported earlier, NetAction's survey of broadband users found that DSL users served by the Bells have a higher percentage of complaints than consumers served by competitors. (See http://www.netaction.org/briefings/brief21.html.)
H. R. 1542 will not promote competition.
The Bells sat on DSL technology for years, deploying it widely only after competition developed.
H.R. 1542 does not ensure that broadband services will be available
in rural communities.
Despite Tauzin's rhetoric, there is nothing in the bill that would require the Bells to deploy broadband service in rural areas. In fact, the Bells have been selling off their rural assets as fast as possible in recent years.
The Bells can't be trusted to offer broadband service if the current
restrictions are lifted.
In the 1990s the Bells promised to deploy high-speed fiber optic networks in exchange for relaxed rate-of-return regulation. But instead of delivering on those promises, they pocketed the profits.
H.R. 1542 will make it more difficult to bridge the digital divide.
With less competition, the cost of Internet access will increase, making the service even less affordable to low-income consumers.
A House vote on the bill may take place later this week. Phone your member of the House of Representatives today!
All House members can be contacted at: 202-224-3121 (Capitol Switchboard).
Or, go to: http://www.house.gov/house/MemberWWW.html for a list of representatives with links to their web sites. The site includes a search engine to locate your representative by zip code if you don't already know who it is.
H.R. 1542 was introduced in April. Tauzin's claim that allowing the Bells into long distance data markets before local phone markets are truly competitive is necessary to ensure widespread deployment of broadband, particularly in rural communities, is an old ploy. In fact, it's one the Bells have used before.
In June 2000 NetAction released a comprehensive report describing how the Bells had broken the promises they made to regulators in the 1990s to deploy high-speed fiber optic networks. (See http://www.netaction.org/broadband/bells.) In many instances the promises to deploy fiber optic networks were made in exchange for relief from important pro-consumer regulations. In many states where regulators went along with these schemes, traditional rate-of-return regulation - intended to protect consumers from profit-gouging - was replaced with incentive or price cap regulation.
The new regulatory schemes gave the Bells more profits, ostensibly to be used to build the promised fiber optic networks. But instead of building the networks, the companies simply pocketed the higher profits. This is one of the reasons that the four remaining Bell monopolies - SBC Communications, Verizon, BellSouth and Qwest Communications International - are among the most profitable companies in the nation.
If the Bells had made a good faith effort to meet the conditions spelled out in the Telecommunications Act of 1996, we might already have vigorous competition in both broadband and local phone service. But the Bells chose instead to stonewall competition by engaging in protracted legal and regulatory maneuvers, and by lobbying Congress to change the law. Changing the Act now would reward the Bells for failing to follow the rules.
In addition to threatening the future availability of affordable broadband and dial-up Internet access, H.R. 1542 could lead to higher phone bills. The bill broadly preempts state regulators, leaving the states with only limited authority over voice phone services.
Broadband Briefings is a free electronic newsletter, published by NetAction to promote policies that encourage rapid and widespread deployment of high-speed Internet access. NetAction is a California-based non-profit organization dedicated to promoting use of the Internet for grassroots citizen action, and to educating the public, policycmakers, and the media about technology policy issues.
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