April 16, 2001, 10:48 AM — Businesses already swimming in broadband uncertainties may find the waters further
muddied by upcoming legislation designed to set the Baby Bells free from long-distance
data transport regulations.
With the telecom industry, and most notably the DSL sector, embroiled in financial
crisis, Reps. W.J. "Billy" Tauzin (R-La.) and John Dingell (D-Mich.)
are expected soon to unleash a bill that would allow the Baby Bells to provide
high-speed data services across regional boundaries.
The impending bill has Capitol Hill aflutter with political wrangling that
harkens back to the Telecom Act of 1996, which imposed strict regulations on
local phone companies' ability to provide long distance voice/data service.
Proponents of the current pro-Bell measure argue that the bill would remove
regulatory restrictions hampering broadband deployment. Detractors say it would
amount to a nail in the coffin for many CLECs (competitive local exchange carriers)
and DSL companies.
The bill is expected to mirror the "Internet Freedom and Broadband Deployment
Act of 1999," sponsored by Tauzin, who is chairman of the House Committee
on Energy and Commerce.
The 1999 bill sought to keep the U.S. Federal Communications Commission from
regulating high-speed data service. It would also have prohibited the FCC from
making incumbents, or Baby Bells, offer "unbundled access" to their
networks.
A Washington trade group took a preemptive strike against the upcoming legislation,
saying it would "just put a spike through the heart of the [DSL] industry,"
which already has a tough time accessing the Bells' infrastructures to provide
service.
In a letter circulated throughout Congress, the Computing Technology Industry
Association (CompTIA) argued that the bill could "roll back the clock of
a monopoly-dominated industry."
For users, all of the broadband regulatory and economic uncertainties are adding
up to real headaches.
"I'm not so sympathetic to the smaller companies anymore," said Elliott
Sloane, CEO of a New York public relations company, which was shut out of DSL
service when bankrupt NorthPoint Communications Group shut down service to ISPs
after liquidating assets.
"My goal today was just to get up and running," Sloane continued.
Faced with DSL distress, Sloane opted for a costly month-to-month contract
with his building's service provider to wait out his broadband options. "I
would be in favor of setting some minimum standards," he said simply of
lawmakers' attempts to straighten out the broadband market.
CTO Ken Riley's 50-employee company, Thinkwell, an Austin, Texas-based electronic
textbook publisher has also been stung badly by broadband. Fed up with DSL outages,
Riley chose a T1 with a price tag that is not so dear that it "justifies
the headaches that go along with DSL."
But because of the Bells' poor track record for customer service, Riley said
he's also leery of the new legislation. "I think before the Bells are given
more authority to do anything, they need to clean up their act," he said.
"They are providing horrendous services at ridiculous rates. At the end
of the day, you really are held hostage."
The Bells, of course, paint a picture of themselves as hostages to current
telecom laws. In a session last week, officials from Baby Bell Verizon Communications
Inc. and economist Alfred Kahn, who chaired a panel examining the California
Energy Crisis, pressed that case to Congress.
Kahn argued that broadband competition has suffered from the combination of
the Bells' having to share lines with competitors along with their inability
to transmit long-distance data within their territories.
Those requirements "are anticompetitive and disrupt competition by imposing
rules to remedy a monopoly situation that does not exist in the market for broadband
services," Kahn said in a statement.
Denver-based Qwest's senior vice president for policy and law, Steve Davis,
said that Congress' mood lately on broadband has the company hoping for relief.
"I think there is a reasonable likelihood that legislation will move forward
which would assure that regulation does not deter broadband services,"
Davis said.
Counting Baby Bell blessings
While DSL companies struggle, Merrill Lynch & Co. Inc. last week included
three Bells in its top telecom service provider picks. Each is vying for a piece
of the much-coveted long-distance data services market.
* Verizon
