Tauzin-Dingell Broadband Bill Passes House Committee - Brief Article

ISP Business, May, 2001

The Tauzin-Dingell bill, which is named "The Internet Freedom and Broadband Deployment Act of 2001" narrowly passed through the House Energy and Commerce Committee by a 32-23 vote. The bill, written by Rep. Billy Tauzin, chairman of the committee on energy and commerce, and Rep. John Dingell, fellow member of the committee, will ease regulations that require the Baby Bells to prove that their local phone market is open to competition before they can offer high-speed Internet access. The bill would also release the Bells from the obligation to lease parts of their network to competitors at wholesale prices.

The incumbent local exchange carriers (ILECs), (SBC Communications, Verizon, Qwest, and Bell South) have lined up in support of the bill. On the other side of the bill are ISPs, competitive local exchange carriers, and cable and long-distance telephone companies. They are backing a bill introduced by Cannon and Conyers, which calls for strict adherence to the Telecommunications Act of 1996. The act forced the companies to open up their network to competition. ISPs and CLECs don't have the financial clout that the incumbents have, but long-distance providers such as AT&T, WorldCom, and Sprint, which have more money, are on their side due to a recent move by the FCC. The commission gave regional telephone companies the green light to provide long-distance services in states throughout the US. As a result, long-distance phone companies are also looking to break up the Internet dominance of the telephone companies.

Tauzin and Dingell believe their bill will give broadband providers incentive to provide access in rural and other underserved areas. The Bells believe that the bill will level the playing field against the cable industry, which doesn't face as much government regulation as the telephone companies do. Tauzin believes that cable is dominant and controls 75 percent of the broadband market, which proponents of the bill believe is due to the deregulation which it looks to bring to DSL providers. Opponents of the bill believe that it will remove incentive for the Bells to open up their networks to competition, and give them an advantage in the broadband market because they are already wired to almost every home and business.

Opponents of the bill concede that it is likely to pass the House, but hope that it passes by a narrow margin, making it harder for the Senate to pass it. One battle that must be fought in the House is against James Sensenbrenner, chairman of the Judiciary Committee, who has asked that the bill come under review by the judiciary committee before it comes to a floor vote. He believes that it comes under his jurisdiction because it raises antitrust concerns, as it could make it easier for the Bells to exercise monopoly power. The request has been submitted to House Speaker Dennis Hastert, who hadn't responded as of May 15. According to the Wall Street Journal, Hastert recently went on a weekend fishing trip with Tauzin and several Bell lobbyists. If Hastert grants the request, Sensbrenner will conduct a hearing and may seek to amend the bill.

The lines that have been drawn in the battle are not accidental. According to the Center for Responsive Politics, Tauzin and Dingell received $60,000 in contributions from the telephone companies. SBC, Verizon, and BellSouth contributed a total of $9 million during the 1999-2000 election cycle, the majority of which went to the Republican Party. Conyers and Cannon received about $41,000. AT&T contributed about $4 million, 60 percent of which went to the Republican party.