Broadband Battle Moves to Hill

Posted: 07/1999

Broadband Battle Moves to Hill
By Kim Sunderland

Both houses of Congress are poised to consider proposed legislation that attempts to
tackle the thorny issue of broadband, which seems possessed by few and desired by the
masses.

Broadband is transmission equipment with a greater bandwidth than a voice-grade line
that enables it to carry numerous voice, video and data channels simultaneously. The
classic broadband channel is a coaxial cable television cable. But the most common are the
baseband variety, which have the capacity for only one really fast channel. And everybody
wants that channel access, largely to deliver high-speed Internet access to consumers.

The Federal Communications Commission (FCC) is tangling with how to separate cable and
the Internet. FCC Chairman William E. Kennard says the FCC has the authority to prevent
discrimination by cable companies offering high-speed Internet service, but the federal
agency isn’t sure about how to do it. Earlier this year, the FCC decided not to conduct a
formal study, but instead continues monitoring the evolving market for broadband services.

Internet service providers (ISPs) and various consumer groups want more action now, and
say the FCC should prohibit cable companies from requiring cable customers to buy Internet
services from them if they also buy high-speed Internet access from them.

Roughly 2 percent of all American homes are served by networks capable of providing
high-speed data service, says Sen. John McCain, R-Ariz., chairman of the Senate Commerce
Committee. "Of this tiny number, most get high-speed Internet access through cable
modems," he adds. "Most cable modem subscribers are unable to use their own
[ISP] unless they also buy the same service from the cable system’s own [ISP]. This
arrangement puts high-speed Internet service beyond the reach of Americans not served by
cable service, and limits the choices available to those who are."

While the FCC mulls the problem, the debate has gotten hotter on Capitol Hill, where
McCain and two Virginia congressmen have introduced separate but related bills designed to
make access to high-speed Internet connections more widely available.

On the House side, Reps. Robert Goodlatte, a Republican, and Rick Boucher, a Democrat,
have introduced measures that would reduce the regulations on incumbent local exchange
carriers (ILECs) deploying high-speed Internet access, especially in non-urban areas. In
introducing their bills, each Virginia congressman referred separate but similar versions
to both the House Judiciary and Commerce committees. Rep. Goodlatte says House rules don’t
allow either committee to block both bills, so this move gives an overall bill a better
chance of making it to the House floor. Both committees plan hearings on both versions of
the bill, according to sources.

Rep. Goodlatte has introduced the Internet Freedom Act (HR 1686), while Rep. Boucher
has unveiled the Internet Growth and Development Act (HR 1685), both designed to get the
FCC out of the business of regulating the Internet, they say. The proposals would
eliminate FCC regulations that allegedly inhibit the development and rollout of broadband
services in non-urban and rural areas, and ensure consumer choice for broadband services
through open competition.

Congressman W.J. "Billy" Tauzin, R-La., chairman of the House telecom
subcommittee, at press time was planning to introduce a broadband plan. Tauzin isn’t happy
with the Goodlatte-Boucher proposals because he thinks they’re too regulatory, relays his
press secretary Ken Johnson. Johnson explains that Tauzin, Goodlatte and Boucher are
trying to get to the same spot, "but we’re taking two different roads to get there.
There may be some common ground, but we haven’t found it yet."

Meanwhile, presidential hopeful Sen. John McCain, R-Ariz., has introduced the Internet
Regulatory Free-dom Act of 1999 (S.1043) in an effort to "eliminate unnecessary
regulation that impedes making ad-vanced Internet service available to all Americans at
affordable rates," according to a copy of the bill.

Generally, the bill proposes that cable television operators provide open access to all
ISPs. Specifically, McCain says the nation’s local telephone companies are "ready and
willing, but they are not able" to upgrade their lines to provide advanced high-speed
data service, "at least not as fully able as the cable companies are," he adds.
Under his bill, local telcos wouldn’t be required to provide deep discounts to other
companies that lease a big volume of high-speed telephone lines.

McCain and Tauzin are against FCC requirements that ILECs set up separate subsidiaries
to provide advanced services. The commission has proposed excluding advanced services from
the unbundling and resale requirements of the Telecommunications Act of 1996 if they are
offered by a separate subsidiary of the ILECs. By allowing the ILECs to set up separate
subsidiaries to provide in-state long distance data services, the FCC says it’s giving
them a big incentive to build high-speed networks.

"There are only two ways to get broadband to all homes in America … an upgraded,
rebuilt cable system and an upgraded, rebuilt phone system," agrees Atlanta-based
BellSouth Corp.’s CEO and Chairman Duane Ackerman. "The upgraded, rebuilt telephone
network is not being encouraged in the same fashion [as cable]. That’s not a good thing
for consumers."

But the Bell companies are making inroads. For example, this spring, Prodigy
Communications Corp., White Plains, N.Y., and Bell Atlantic Corp., New York, formed a
strategic alliance to provide high-speed digital subscriber line (DSL) access for Prodigy
customers in Bell Atlantic’s service area. DSL is the fastest-growing type of high-speed
telephone connection and this partnership enables Prodigy customers to gain access to the
Internet at higher speeds through Bell Atlantic’s DSL service.

Solomon D. Trujillo, chairman, president and CEO of Denver-based US WEST Inc., however,
claims his company needs McCain’s legislation to become law to extend its high-speed
Internet services to an additional 2 million customers within one year.

On the flip side, cable TV operators, including AT&T Corp.–which is about to
become the largest cable operator in the United States with its planned MediaOne
acquisition and takeover of cable giant Tele-Communications Inc.–say McCain’s legislation
would slow their deployment of high-speed services. AT&T and the cable industry oppose
regulating cable’s high-speed Internet services, and instead prefer voluntary arrangements
with companies.