|Published by NetAction||Issue No. 23||February 19, 2002|
* * * Circulate this alert until February 27, 2002 * * *
A bill that would eliminate key consumer protections in telecommunications is scheduled for a floor vote on February 27, 2002, in the House of Representatives. NetAction is urging Internet users to contact their House representative today to urge a "no" vote on H.R. 1542, the Internet Freedom and Broadband Deployment Act of 2001. The bill 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. In addition, state regulators have warned that the bill could exacerbate the decline in service quality that consumers have experienced under deregulation. (See: http://www.naruc.org/tauzin_dingell.pdf.)
H.R. 1542 would free the four remaining Bell phone monopolies -- SBC Communications, Verizon, BellSouth and Qwest Communications International -- 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, is an unabashed Bell supporter.
One of the key consumer protections that Congress included in the Telecommunications Act of 1996 was the requirement that the Bells open their local phone markets to competition before they are allowed into the long distance markets. 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, giving the Bells control of the nation's telecommunications and technology infrastructure and threatening the future deployment of both broadband and dial-up Internet access, as well as 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.
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.
H.R. 1542 will undercut efforts to address consumer complaints
about declining service quality.
According to the National Association of Utility Regulatory Commissioners (NARUC), H.R. 1542 could also lead to additional litigation over state jurisdiction.
News reports indicate a floor vote is scheduled for February 27, 2002. Calls to all House members are urgently needed.
All House members can be contacted through the Capitol Switchboard: 202-224-3121. Or visit http://www.house.gov/house/MemberWWW.html to look up your Representative's direct House or District phone number. (If you don't know who represents your district, the site includes a zip code search tool to locate your Representative.)
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 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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