Does this bill effectively re-open the Telecommunications Act of 1996?

• No. This bill addresses issues that were never debated, or even contemplated, five years ago, and essentially supplements the Act to reflect the current state of technology.

• H.R. 1542 does not roll back any of the market-opening requirements in the Act. Bell companies still must comply with all network unbundling and resale rules that are necessary for local telephone competition to take hold.

Does this bill allow the Bell companies to make an end-run around the Telecom Act’s Section 271 checklist for entry into the long distance business?

• No. This argument is a red herring. While it is absolutely correct to say that, in a digital world, a voice "bit" is indistinguishable from a data "bit," the bill’s provision allowing the Bell companies incidental interLATA relief for data services will not allow them to get a foothold in the voice long distance market.

• Here’s why:

1. The only way for Bell companies to offer voice long distance under our bill is by using packet-switched, or "IP telephony." The experts say IP telephony is not a viable service, and won’t be for at least 3-5 years.
   
2. Even if you assume IP telephony was viable today, our bill prohibits the Bell companies from marketing voice long distance service. The Big 3 long distance companies, AT&T, MCI, and Sprint, spend hundreds of millions of dollars in marketing costs each year to acquire each new customer. It would be infeasible for the Bells to gain a foothold in that market without spending a single dollar.
   
3. Finally, even if the Bell companies could market the service, they are also prohibited under H.R. 1542 from charging customers for it. There is no market incentive to acquire customers who don’t pay for the service.

• The Bottom line is Bell companies will still have a strong incentive to meet Section 271 checklist – it’s the only way to effectively compete with the major long distance companies for voice long distance customers.

• H.R. 1542 does not specifically mandate open access for cable. However, it would permit local cable franchise authorities to order open access, so long as they are otherwise legally permitted to do so.