CLECs, Municipalities and Cable Unhappy with Ensign Bill
Analysis of Sen. Ensign’s (R-Nev.) telecom bill (CD July 28 p1) is yielding a common refrain: It’s a good start, but the bill won’t pass as is because of controversial provisions affecting cable, CLECs and municipalities, according to interviews with analysts and lobbyists. Furthermore, Senate Commerce Committee Chmn. Stevens (R-Alaska) is planning his own telecom bill, which he has said he'll unveil in the fall after dealing with DTV legislation. Senate sources said Stevens may gauge the response to the Ensign bill as he drafts his own legislation. Others are pessimistic that there will be time to write an omnibus bill.
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“It’s challenging trying to move something this broad,” said Paul Gallant, analyst with Stanford Washington Research Group: “I think it [Ensign bill] lays down a marker for industry sectors and other members of Congress to react to, but I am skeptical that anything that broad could be enacted this year or next.” Any telecom bill also has to address universal service fund (USF) reform, a feature not included in the Ensign bill but which Stevens has declared a priority, he said.
“Bills that fail in one Congress can become the drivers of broader legislation in another, as when various initiatives that had been bubbling for years came together and eventually produced the ‘96 Telecom Act,” said telecom analyst Blair Levin in an industry note. He noted that the House is still working on its telecom update effort, so the “debate is just beginning, in our opinion.” That update effort, led by House Commerce Committee Chmn. Barton (R-Tex.), is expected to address video franchising, VoIP and E-911 issues (CD July 14 p1).
Cable is concerned about the Ensign bill’s provisions on video franchising because they don’t require buildout obligations for new entrants, according to a cable industry source. The bill also exempts video service providers from providing leased or common carrier type access to their video service and facilities. “That’s anticompetitive,” the source said: “The Bells have made it clear that they want to cherry pick the highest most profitable areas and stop when they get the highest rate of return. That does not promote competitive choice. So we're going to have a difference of opinion on that.” But he said cable is pleased that the bill treats like services alike, a goal cable sought during discussions with Senate staff.
Municipalities also dislike the video franchising provisions because they strip power from local govts. “We have strong reservations” about the bill, said Cheryl Leanza, principal legislative counsel-National League of Cities. The approach is deregulatory, a “bookend,” but not one that she thinks could be enacted as is at the end of the day. Instead, she hope that Sen. Stevens would be more responsive to municipal issues as he writes his bill. “We've had good meetings with his staff and there’s no reason to think that Stevens isn’t attentive to regionalism and localism issues,” she said.
“I think the bill strikes a good balance of regulatory approaches,” said Braden Cox, policy analyst- Competitive Enterprise Institute: “I think one of the more controversial provisions is the section on municipal networks.” This could spark debate that would delay the bill. Also, the provision that prohibits consumers from access to any legal content over facilities that use broadband connections is also controversial. This provision, while protecting consumers from blockage of service, could crimp investment and innovation on the part of video service providers, he said. “It could dissuade companies from developing unique content,” he said.
CLECs are disappointed with the bill’s lack of regulation on access to phone networks, which it says could cripple emerging technologies such as VoIP. “The reality is there will always be more services that want access to the infrastructure,” said CompTel Pres. Earl Comstock. “But if you want competitive prices, you have to have rules requiring owners to share the pipe that was built over public rights of way,” he said. Comstock said he’s concerned that the bill fails to put any oversight mechanism to safeguard consumer interests, and notes that in the case of the cable industry, “no one has been able to work their way onto the pipe.” So he doesn’t think the situation would be any different with telecom without federal legislation to address it.
Qwest praised the bill as an attempt to “rationalize our nation’s communications policy by reducing onerous and outdated regulations and leveling the playing field for all competitors in the communications marketplace,” said Gary Lytle, Qwest senior vp-federal relations in a statement. Lytle said the bill would prompt competition in voice, video and data markets, benefiting consumers.