WASHINGTON-Proponents of a bill that would allow the Baby Bells to offer long-distance data services pointed to the largely deregulated wireless industry as a positive example of deregulation.
“Broadband is a nascent market that does not need regulation. What it needs is the ability to thrive, similar to what happened with the wireless industry when government stayed out of its way. Wireless thrived in the absence of regulation and broadband will as well. But broadband needs to be deregulated,” said Rep. Billy Tauzin (R-La.), chairman of the House Commerce Committee.
Verizon Communications and SBC Communications Inc., the largest beneficiaries of the data-relief bill, also used wireless as an example of what they said can happen if deregulation comes to the data market.
“The inescapable conclusion is that the cellular industry-and cellular consumers-benefited greatly from deregulation. In a deregulated environment, subscribership rose and prices dropped. The high-speed Internet market today is in a similar position as the cellular industry was more than 10 years ago,” said Thomas J. Tauke, Verizon senior vice president for public policy and external affairs.
“Congress need look no further than to the wireless market for confirmation that these principles will benefit consumers and competition. In the early 1990s, Congress decided that a competition model (rather than a regulatory model) should be used for the wireless market. Hence, neither the [Federal Communications Commission] nor the states regulated the prices, terms or conditions in that market and there are no requirements for wireless providers to unbundle their networks or to assist their competitors’ entry into the market. As a result, investment in the wireless market has exploded, prices have fallen dramatically, and consumers have benefited from the robust competition in that market by seeing more choices, more innovation and lower prices,” said Paul K. Mancini, SBC vice president and assistant general counsel.
When the telecom act passed, the Baby Bells became subject to a 14-point checklist to prove they had opened their local markets to competition in a particular state before entering that state’s long-distance market. To date, the FCC has approved Bell long-distance entry in five states and is reviewing SBC’s application for Missouri and Verizon’s application last week for Connecticut.
“People love competition when they go into someone else’s backyard to compete rather than when people want to come into your backyard to compete,” said Rep. Thomas Barrett (D-Wis.), noting the lack of cooperation between Baby Bells and the long-distance industry.
Tauzin, along with House Commerce Committee ranking member, Rep. John D. Dingell Jr. (D-Mich.) have worked toward data relief for the Baby Bells for several years. Last week’s hearing was the fifth since passage of the Telecommunications Act of 1996. The prospects for passage of the data-relief bill in the House increased when Tauzin ascended this year to chairman of the House Commerce Committee.
The bill would remove the 14-point checklist for data services, but keep them in place for voice.
Opponents have cried foul. “This legislation is highly flawed for three key reasons-it’s un-digital, unnecessary and unfair,” said Rep. Edward Markey (D-Mass.), ranking member of the House telecommunications subcommittee.
“This bill is a sham. You cannot separate voice from data. If you can’t separate voice from data, how can you offer data-relief?” asked Rep. Chip Pickering (R-Miss.).
While prospects of the bill in the House improved greatly, the prospects in the Senate are still dim. “It cannot pass the other body,” warned Pickering.
Also, four senators wrote to the FCC last week urging more, not less, scrutiny of long-distance applications.
