Copyright 2000 Federal News Service, Inc.
Federal News Service
July 26, 2000, Wednesday
SECTION: PREPARED TESTIMONY
LENGTH: 1598 words
HEADLINE:
PREPARED TESTIMONY OF PETER PITSCH COMMUNICATIONS POLICY DIRECTOR INTEL
CORPORATION ON BEHALF OF THE INFORMATION TECHNOLOGY INDUSTRY COUNCIL (LTI)
BEFORE THE SENATE COMMERCE, SCIENCE AND
TRANSPORTATION COMMITTEE
SUBJECT - S. 2902; THE BROADBAND
INTERNET REGULATORY RELIEF ACT
BODY:
Mr.
Chairman and Members of the Committee,
My name is Peter Pitsch and I am
Communications Policy Director for Intel Corporation. I am here today to testify
on behalf of ITI, the Information Technology Industry Council. ITI is the
association of the leading information technology companies, including computer
hardware and software manufacturers, networking companies, and Internet services
companies, lTI member companies employ more than 1.2 million people in the
United States and exceeded $633 billion in worldwide revenues
in 1999.
On behalf of ITI and its member companies, I would like to
thank you for this opportunity to testify before your Committee and express our
support for S. 2902, the Broadband Internet Regulatory Relief Act, introduced by
Senator Brownback. ITI believes that the rapid deployment of affordable
broadband technology is a key component to continuing the dramatic growth of the
Internet and e-commerce. Consumers don't want to wait 15 minutes, or even one
minute, for a website to download - they want high-speed Internet services that
will make their online experience more convenient. There is no doubt that the
Internet economy has grown faster and larger than anyone imagined. Today,
according to recent study by the University of Texas, the Internet economy is
valued at over $500 billion and is growing at an astounding 62%
a year. Moreover, the impact of the Internet on our lives and our businesses has
been tremendous. According to Duke University, 56% of U.S. companies will sell
their products online by 2000, up from 24% in 1998. But for this growth to
continue we need to have policies that support competition and encourage
companies to develop the necessary high-speed infrastructure.
The core
telecom policy mission of ITI is to promote the rapid deployment of affordable
broadband technology, providing all consumers access the full potential of the
Internet. In pursuit of our policy goal, ITI has adopted the following broadband
principles:
1) Markets, not regulators, should drive the deployment of
broadband technology. To that end, ITI supports the deregulation of the
telecommunications industry and the continued non-regulation of information
services.
2) Market-based competition among all channels of the
communications marketplace is the best way to promote rapid deployment of
broadband technology.
3) Government intervention in the market is
appropriate only where a competitive bottleneck exists.
4) ITI does not
endorse any single broadband technology and believes deployment of multiple
technologies will benefit consumers.
Consistent with these principles,
lTI is proud to endorse S. 2902, the Broadband Internet Regulatory Relief Act of
1999. lTI believes that this bill, if enacted, will encourage rapid deployment
of advance services to consumers through deregulation without diminishing
competition for broadband services. Furthermore, ITI believes this legislation
is another important step in removing barriers to competition in the
telecommunications markets, which in turn will stimulate investment, spur
technological innovation, reduce prices, and increase consumer choices.
ITI believes that S. 2902 would eliminate many of the incumbent local
exchange carriers' (ILECs) disincentives to deploy digital electronics and
transmission facilities to consumers. Specifically, by eliminating
interconnection and unbundling requirements for new packet-based equipment and
fiber loops deployed to residences, this legislation removes a deployment
disincentive that ILECs face--being required to allow competitors unbundled
access to this new high-speed equipment. ITI believes that removing this
disincentive will lead ILECs to deploy more quickly high-speed services such as
DSL, bringing the benefits of broadband technology to more
consumers. At the same time, ITI believes that eliminating these requirements
will not undermine the ability of other competitors to provide their services so
long as ILECs continue to comply with the collocation and loop provisioning
rules. Unlike the existing local loop, ILECs do not have a legacy advantage in
newly installed advance services and this equipment is readily available to
competitors and ILECs alike.
While S.2902 removes significant regulatory
barriers, ITI is satisfied that it provides important safeguards to ensure the
removal of those barriers has the desired effect and does not adversely impact
competition. First, to get deregulated a ILEC must meet important build-out
benchmarks. Essentially, it must make advanced services available to 80% of its
customers within 3 years and 100% of its customers within 5 years. Moreover,
obtaining these goals will significantly increase the number of households
served by DSL-capable loops which could benefit all
competitors. Second, deregulation is conditioned on the ILECs complying with
Commission and state collocation and loop provisioning rules, which will ensure
competition can continue to thrive, lTI has long maintained that it is important
that the competitive local exchange carriers (CLECs) have access to the ILECs'
loops and central offices. Indeed, in December 1998, it reached an accord with
the ILECs that conditioned deregulation of their advanced services on their
making these essential facilities available to the CLECs. Finally, in the case
of new fiber loops, ILECs can be required, upon request, to maintain the
existing copper local loop, so competitors do not lose access to the home
capable of providing advanced and other telecommunications services.
In
sum, lTI believes that S. 2902 take a sensible step-by-step approach to
eliminating regulatory barriers that will encourage rapid deployment of advance
services to consumers through deregulation and competition. ITI's support of
S.2902 is one part of a consistent set of policies that we believe will increase
the deployment of a variety of competing broadband technologies.
For
example, lTI has recently endorsed S. 2698, the "Broadband Internet Access Act
of 2000", introduced by Senator Moynihan. This technology-neutral legislation
would provide tax incentives for the deployment of broadband technology to urban
and rural areas that today are often not served by high-speed services, as well
as for the build- out of very high-speed, next generation broadband services to
residences. Like the legislation before us today, S.2698 recognizes the need for
this investment in our IT infrastructure so all Americans can realize the
opportunities of broadband technology and the Internet. However, S.2698 does not
eliminate the need to make necessary regulatory reforms addressed in the current
bill, S.2902.
In the area of high-speed cable access, ITI has supported
the Federal Communication Commission's decision to forego regulatory action to
mandate cable access. Last year, ITI wrote to FCC Chairman Kennard in support of
the Commission's amicus brief in AT&T v. City of Portland. ITI argued that
because cable Internet access is an emerging service and the providers currently
lack market power in the Internet access market, they should not be subject at
this time to open network requirements. Furthermore, ITI agreed with the
position taken by the FCC that the question of whether cable companies should be
required to open their cable modem services should be addressed at the federal
level. Apart from legal arguments over federal and local jurisdiction, ITI
believes that there are compelling economic and business reasons for developing
a national policy on this important issue.
ITI has also advocated
regulatory relief for ILECs before the FCC. Last year, lTI argued, and the FCC
agreed, that certain high-speed DSL equipment installed by
incumbent local phone companies should not be required to be unbundled. ITI
submitted comments to the FCC on this particular matter because we believe that
it will enhance the competitive growth of the broadband market by providing an
incentive for ILECs to deploy DSL quickly. At the same time,
however, the FCC also agreed with the position taken by ITI that the local loop
must remain open to all competitors.
As you can see, ITI has been
actively involved in broadband policy issues. ITI has not sided with one camp or
another, but instead it has supported and opposed the positions of all of the
major players at one time or another. Throughout this policy process, lTI has
supported the same basic goal; namely, rapid deployment of widespread,
affordable broadband for consumers.
We would encourage the Committee to
be as forward-looking as possible when it examines broadband issues. As we all
know, the telecommunications debates of the latter part of the 20th century
often involved pitting entrenched business interests against each other, or they
focused on the competitive deficiencies of one communications medium or another.
We have today a far different landscape, one that has emerged only in the last
several years. With the Internet achieving status as a mass medium, consumer
demand for broadband data service has grown exponentially. All major
communications infrastructure providers should be incented to meet that demand
even if, in practice, that means the government will be loosening some of the
regulatory restrictions that may have made sense in a prior era. As this debate
continues, I would urge you to turn to ITI and the high-tech community as an
impartial voice on these important issues.
On behalf of ITI, I would
like to thank the Committee for its time, and I would be glad to respond to any
questions.
END
LOAD-DATE: July 28, 2000
