Bush and Kerry tout broadband expansion: both candidates make aggressive campaign pledges, but details may be left to legislators

America's Network, Sept 1, 2004 by Tania Anderson

While the country itself may be sharply divided about the upcoming national election, most telecom industry observers believe there just isn't a whole lot of difference on the telecom stands of George W. Bush and John Kerry.

Analysts and Washington observers say because of their history with telecommunications, either man is likely to have Congress take the lead on these issues. Both have shown little interest in telecommunications during their years in office, as well as on this year's campaign trail.

"It's not entirely clear to me the difference between a Kerry and Bush administration," says Adam Thierer, director of telecommunications studies at the Cato Institute, a non-profit public policy research foundation with a Libertarian bent headquartered in Washington. "Action will be more driven by Congress and the administration will decide how much input to have."

On the campaign trail, both Bush and Kerry say they want to expand availability of broadband, though they'd take slightly different approaches. Bush has left telecom matters largely to the courts and the FCC during his first term. Kerry's voting record, meanwhile, suggests no great change in the status quo.

Two years ago, for example, Kerry co-sponsored the Auction Reform Act of 2002, which requires the FCC to oversee competitive bidding for the auctioning of spectrum. The bill passed unanimously in the House and Senate and became law in June 2002. In 2000, Kerry voted in favor of legislation, introduced by Sen. Conrad Burns, R-Mont., that would establish a loan program to finance the installation of local television broadcast signals, including high-speed Internet access and National Weather Service warnings, in unserved or underserved areas of the country. That bill passed the Senate 97-0 but then stalled in the House. Kerry also voted for the landmark Telecommunications Act of 1996, but then wanted to repeal sections of it that criminalized the distribution of information about abortion over the Internet.

TELECOM REFORM

Most of the heavy lifting after a new administration and Congress are in place will involve the refreshing of the outdated Telecommunications Act of 1996. Lawmakers will be looking at what worked in the 1996 legislation and what didn't as they work to make it more relevant for today's industry.

"No one wants to get into a wholesale rewrite of the act," says Grant Seiffert, vice president of external affairs and global policy for the Telecommunications Industry Association, a Washington trade organization. "It's a challenge with old rules versus new technologies."

The overall question that policy makers face is whether to maintain government-managed competition in the industry or move toward a more market-based environment.

"How do you move our economy--because lots of jobs are at stake--forward if you maintain an old-fashioned regulatory model and don't focus on a more market-based model?" says Ed Merlis, senior vice president of government and regulatory affairs at the United States Telecom Association (USTA), a Washington trade organization. "The next administration will have to come up with their recommended policies to influence what Congress should do."

Legislators will also deal with how telecommunications is regulated. State and local authorities and federal agencies have struggled with the issue for several years. The industry, backed by Republican lawmakers, has been largely opposed to new state and local regulations.

"There has always been a strong role for state regulators in policing telecom policy," Thierer notes. "The question is how far can Congress go in terms of preemption."

Thierer said preemption came into play during Reed Hundt's reign over the Federal Communications Commission during the 1990s when states attempted to impose infrastructure-sharing requirements on cable networks. The FCC put a stop to it.

The next administration will also have to tackle the various sets of rules that apply to telecommunications operators, including cable companies, wireless providers and information services providers.

"Every single one of those entities is regulated under different sets of rules," Thierer says. "All these sectors are now converging and competing head-to-head."

BROADBAND BATTLE

Broadband has been the only visible telecom issue to gain any traction in the campaign. Both Bush and Kerry support measures to increase access to broadband, especially in rural areas of the country. Bush said the entire country should have access to high speed Internet access by 2007. He has ordered federal agencies to make it easier for broadband providers to get access to federal land, and he supports banning any Internet taxes. Bush is also pushing for increasing spectrum for wireless broadband.

Kerry's broadband plan includes a tax credit to broadband companies providing access in rural areas of the country. The Massachusetts senator had tried to get legislation passed in 2001 that would have given broadband companies a 10% tax credit for the expense of bringing broadband to rural areas. The bill died in committee. Kerry co-sponsored legislation in 2003 that would have treated broadband access fees as a tax deduction. That legislation also stalled.