|Published by NetAction||Issue No. 20||June 8, 2001|
(Date of alert: June 8, 2001)
Contents of this alert:
NetAction is asking Internet users to contact members of the House Judiciary Committee and urge them to oppose 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 Judiciary Committee is scheduled to vote on the bill on June 13 and has the authority to amend the bill to ensure that it won't stop prosecutors from suing the Bells for violations of antitrust law. Call committee members TODAY to urge them to amend the bill to protect consumers from potential antitrust violations. (To check the bill's status, see http://thomas.loc.gov.)
As we reported in Broadband Briefings No. 19, H.R. 1542 would free the four remaining Bell phone monopolies from their obligation to open their networks to competitors. The bill is co-sponsored by Rep. Billy Tauzin of Louisiana and Rep. John Dingell of Michigan. After it was approved by the House Energy and Commerce Committee, it was referred to the House Judiciary Committee at the request of Committee Chairman F. James Sensenbrenner of Wisconsin, but only for the limited purpose of reviewing provisions related to antitrust enforcement.
Reports on the Judiciary Committee's June 5 hearing on H.R. 1542 indicate that Chairman Sensenbrenner is considering adding an amendment to clarify that state prosecutors would retain authority to prosecute the Bell monopolies for violations of antitrust laws. While this would be a slight improvement, the bill would still be bad for consumers and Internet users.
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. Rather than ensuring meaningful competition, 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.
The Judiciary Committee's ranking Democrat, John Conyers of Michigan, reportedly declared at the June 5 hearing that he was "slightly stunned by the nerve" of the Bell monopolies' request to change the 1996 Act. Recent developments in the industry underscore just how outrageous this effort is.
According to one recent report, more than three dozen competitive telecommunications companies have gone out of business since last fall, leaving about 500,000 customers without dial tone. Growing numbers of consumers and businesses have also lost Internet access because broadband and dial-up Internet service providers have gone under. Allowing the Bells into long distance data markets now will only exacerbate this trend and strengthen the Bells' control of the industry.
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.
The House Judiciary Committee is scheduled to vote on H.R. 1542 on June 13. Calls to committee members are urgently needed. A list of committee members and their office phone numbers is included below, along with the Committee's fax numbers. If you are a constituent, contact your district representative. If your district representative is not on the Judiciary Committee, contact Rep. Sensenbrenner (Republican) or Rep. Conyers (Democrat).
Fax number for Republican committee members: 202-225-7682
Fax number for Democratic committee members: 202-225-7680
|Republican Members||Phone Number|
|James Sensenbrenner, chair||202-225-5101|
|John Conyers, ranking member||202-225-5126|
|Sheila Jackson Lee||202-225-3816|
H.R. 1542 was introduced on April 24, rushed through the Internet and Telecommunications Subcommittee of the House Energy and Commerce Committee, and narrowly approved by the full House Energy and Commerce Committee by a vote of 32-23 on May 9. It was subsequently referred to the Judiciary Committee at the request of Rep. Sensenbrenner.
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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