WASHINGTON—The wireless industry continued to push for pre-emption, Sprint Nextel Corp. urged inclusion of special-access reform and Sen. Ted Stevens (R-Alaska), chairman of the Senate Commerce Committee, floated a network-neutrality compromise Tuesday as the Senate Commerce Committee held a hearing on the latest version of telecommunications reform.
CTIA President Steve Largent appeared at Tuesday’s hearing to plead again for the wireless industry’s top telecom-reform priority as the latest Senate draft bill did not include pre-emption.
“Ironically, while Congress is working to increase competition and innovation for other sectors via a national framework, regulatory bodies at the state level are attempting to take wireless far back into the 20th Century by imposing disparate and burdensome state-by-state restrictions. The innovative national approach applied to the wireless industry in the 1993 budget act has proven its incredible value and is one which recognizes that the consumer is the best regulator,” Largent told the senators.
Pre-emption of state regulation has been CTIA’s top telecommunications-reform priority, and the wireless trade association has been scrutinized and criticized for not being able to convince lawmakers to include it.
The House of Representatives passed its version of telecommunications reform last Thursday without a pre-emption provision.
While CTIA presses for wireless pre-emption, state regulators are pushing back hard. “We are concerned and raise the issue today because the wireless industry has launched an aggressive lobbying effort to create a technology-specific pre-emption standard for their telecommunications services. From our point of view, it makes little sense to eliminate scores of consumer protections at the state level solely on the basis of the particular technology used. In the case of wireless, it makes even less sense because the industry has prospered so well under the division of authority that now exists,” said Philip Jones, commissioner with the Washington Utilities & Transportation Commission and chairman of the federal legislative subcommittee of the National Association of Regulatory Utility Commissioners.
NARUC believes telecommunications reform should put in place what it calls “functional federalism.”
“A federal framework should look into the core competencies of agencies at each level of government—state, federal and local—and allow for regulatory functions on the basis of who is properly situated to perform each function most effectively,” said Jones. “In that model, states excel at responsive consumer protection, efficiently resolving intercarrier disputes, ensuring public safety, assessing the level of competition in local markets and tailoring national universal service and other goals to the fact-specific circumstances of each state.”
Amendments on wireless pre-emption are expected to be offered when the Senate Commerce Committee considers the bill June 22.
Wireless pre-emption wasn’t the only wireless issue on display at the Tuesday hearing. Sprint Nextel pushed for special-access reform.
Special access is a term to describe the dedicated lines used to carry traffic from a wireless base station to a mobile switching center and/or onto the public switched telephone network. Since these lines are typically local, incumbents control them. Sprint Nextel told the senators that 99 percent of the special-access lines it uses are controlled by Bell operating companies.
“Sprint Nextel would very much prefer to have the option of obtaining these dedicated circuits from someone other than the BOCs who, after all, are the parents of our largest competitors Cingular Wireless L.L.C. and Verizon Wireless,” said Robert Foosaner, Sprint Nextel senior vice president of government affairs and chief regulatory officer.
Special-access reform was included in the Democratic staff draft, but has not been included in the Republican drafts. This issue is expected to be considered as part of the mark-up process when amendments are offered.
On the thorny subject of network neutrality, Stevens hinted at a compromise, where the Federal Communications Commission would be given the authority to resolve consumer complaints of discriminatory behavior, but businesses such as Google Inc. and Yahoo Inc. would be forced to litigate the issue, probably using antitrust principles.
“We should let the FCC deal with net-neutrality problems with consumers and let the big providers hire lawyers,” said Stevens.
Stevens wants to remove the artificial distinction between information services and telecommunications services. Telecommunications services are regulated while information services generally are not. Since digital subscriber lines were recently declared to be information services, network-neutrality proponents believe that content providers soon will be charged more for using the bigger pipes being built. “Communications is communications and not to be treated differently if they are telecommunications or information services,” said Stevens.
The original bill introduced May 1 has the FCC studying whether network operators are prioritizing the content traveling over their networks. Based on comments he made at the hearing, Stevens apparently still likes this approach, but Democrats oppose it. On the House side, Democrats tried unsuccessfully to include language that would prohibit blocking, degrading and/or restricting access to content—things that are done routinely by wireless operators today.
The White House has signaled that it is also opposes net neutrality.
Network neutrality has become so controversial that senators on the panel expressed fears that it could sink the entire telecommunications-reform effort. “There is so much good in the broader bill, it would be a shame if network neutrality ruined it,” said Sen. Gordon Smith (R-Ore.).
