High-Speed Internet Access Bill Put Off Until 2002

By Jeff Johnson | July 7, 2008 | 8:28 PM EDT

Capitol Hill (CNSNews.com) - A "controversial" high-speed Internet access bill, which was tentatively scheduled for a vote Friday in the U.S. House of Representatives, has been tabled until next year.

The lead sponsor of the proposal, House Energy and Commerce Committee Chairman Billy Tauzin (R-La.) says a lack of competition between broadband providers is denying high-speed Internet access to millions of people.

"Essentially, these Americans will have no access to the high-speed on-ramps to the Internet because the current backbone hubs are concentrated in the big cities and high-income urban areas of the country," Tauzin said. "At present, 60 percent of our states have only 2 or 3 backbone hubs. Several states don't have any backbone hubs at all."

"The bill is complicated, controversial among a lot of our members, and this is a busy time," said Richard Diamond, a spokesman for House Majority Leader Dick Armey (R-Texas). "A lot of members were interested in holding off so that they could think more about it, examine the bill more closely, and make a more reasoned decision."

The Internet Freedom and Broadband Deployment Act of 2001 (H.R. 1542) would repeal a provision of the Telecommunications Act of 1996 that forbids the Regional Bell Operating Companies (RBOC) from offering high-speed Internet access until they open their local phone monopolies to competition, according to a summary compiled by the Congressional Research Service.

The organized opposition to the bill, a group called Voices for Choices, says the RBOC's monopolies will only grow stronger if they are allowed to enter the high-speed Internet access market before they open their local telephone monopolies.

"Today, four phone giants ...Verizon, Qwest, SBC and BellSouth ... control virtually every home phone line in America," the Voices for Choices website claims. "There is little or no competition in local phone service, consumer complaints are increasing, local phone rates are still too high, and the future of affordable Internet access is in serious jeopardy.

"This bill will slow down high-speed Internet deployment, increase DSL prices, and go back on (Congress') promise to allow competition for local phone service," Voices for Choices concludes.

Tauzin disagrees.

"Contrary to the claims of the opposition, (the bill) does not remove the obligation of the RBOCs to open their markets to voice competition as provided under the terms of the Telecommunications Act of 1996," he said.

Tauzin says the bill, "...frees the Regional Bell Operating Companies (RBOCs) to 'build out' and offer high-speed Internet data and backbone hub services on a level playing field in competition with cable companies and current backbone providers."

Supporters of the legislation say the market for high-speed Internet service is not a monopoly and shouldn't be treated like one.

"Companies that offer high-speed Internet access over cable lines, wireless connections or satellite links are allowed to develop new services and compete free from regulation," according to ConnectUSA.org, a website created to promote the legislation. "But DSL (Digital Subscriber Line) service offered by local phone companies is ... regulated like phone service."

An analysis of the bill conducted by James K. Glassman, resident fellow at the American Enterprise Institute and William H. Lehr, associate director of the Internet and Telecoms Convergence Consortium at the Massachusetts Institute of Technology holds a dim view of the proposal.

"The Economics of the Tauzin-Dingell Bill: Theory and Evidence" agrees with Voices for Choices that Tauzin-Dingell will actually strengthen the monopolies of the RBOCs, and will drive competitors out of business. An even more dire prediction, the report argues that the bill would actually lead to an increase in regulations.

"It is highly unlikely that politicians will permit unregulated monopolists to have such power and will thus return telecommunications to strict public-utility regulation, from top to bottom," Glassman and Lehr argue.

"The Tauzin-Dingell bill, in summary, stands squarely in opposition to competition and deregulation. The result for consumers will be less choice, higher prices and poorer quality," they say.

Armey says H.R. 1542 will be brought up for a vote sometime in March 2002, after members have had sufficient time to review the details of the proposal.