NetAction Notes

IN THIS ISSUE:

ACTION ALERT: Bill Threatens Broadband Internet Access

(Date of alert: May 2, 2001)

* * * Circulate this alert until May 8, 2001 * * *

Contents of this alert:

1. Oppose H.R. 1542 (The Internet Freedom and Broadband Deployment Act of 2001)
2. Why this bill threatens broadband Internet access
3. Talking points
4. Who to contact in Congress
5. More background

1) Oppose H.R. 1542

NetAction is urging Internet users to contact members of the House Commerce Committee and urge them to vote "no" on H.R. 1542, the Internet Freedom and Broadband Deployment Act of 2001. 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 Energy and Commerce Committee could vote on the bill as early as next week. Call committee members TODAY to urge them to vote "no" on H.R. 1542.

2) Why this bill threatens broadband Internet access

As we reported in Broadband Briefings No. 18, 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 put the bill on a fast track to passage in the House.

Despite its name, H.R. 1542 will not ensure Internet freedom or 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.

3) Talking points

• 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.

4) Who to contact in Congress

The House Energy and Commerce Committee may be voting on H.E. 1542 as early as next week. Calls to committee members are urgently needed. A list of committee members and their office phone numbers is included below.

5) More background

H.R. 1542 was introduced on Tuesday, April 24, was the subject of a hearing on Wednesday, April 25, and was approved on Thursday, April 26, by a 19-14 vote of the Internet and Telecommunications Subcommittee of the House Energy and Commerce Committee. The full Energy and Commerce Committee is expected to hear the bill next week.

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.

About NetAction Notes

NetAction Notes is a free electronic newsletter, published by NetAction. NetAction is a California-based non-profit organization dedicated to promoting use of the Internet for grassroots citizen action, and to educating the public, policy makers, and the media about technology policy issues.

To subscribe to NetAction Notes, send a message to: . The body of the message should state: subscribe netaction
To unsubscribe at any time, send a message to: . The body of the message should state: unsubscribe netaction

For more information contact NetAction by phone at (415) 215-9392, by E-mail at

Copyright 1996-2003 by NetAction. All rights reserved. Material may be reposted or reproduced for non-commercial use provided NetAction is cited as the source.