POLITICS - The Gore Glitch?

By Brody Mullins, National Journal
© National Journal Group Inc.
Saturday, June 05, 1999

	      Republican presidential hopefuls are exploring whether an 
adept challenger could portray Al Gore as a threat to the growth 
of the Internet--and turn one of the Vice President's strongest 
issues against him. GOP advisers insist that more Americans would 
enjoy high-speed Internet service and more companies would have 
access to cyber customers if the Federal Communications 
Commission--which the Republicans view as Gore's pet agency--had 
not proposed regulations that discourage the powerful Baby Bell 
phone companies from building high-speed lines for Internet 
access. 
	     The new, ultrafast lines, called ''broadband'' in 
industry lingo, can carry information dozens of times faster than 
those in place today. But they would also require expensive 
upgrades to the traditional phone infrastructure. 
	     Already, millionaire publisher Steve Forbes has tried to 
link the government regulations to Gore. Campaign Manager Bill 
Dal Col has promised that the Forbes campaign will ''clearly 
point out all the roadblocks and impediments that the inventor of 
the Internet has put in its very path.'' 
	     Meanwhile, advisers to Texas Gov. George W. Bush and Sen. 
John McCain of Arizona are examining how much traction the 
Internet issue may have in the presidential campaign. While 
strategists acknowledge that the issue will not be a big concern 
for most voters, they believe it could play well with certain 
groups, including high-tech campaign contributors, residents of 
rural areas, and suburban swing voters. 
	     At the heart of the issue are regulations, generated by 
the 1996 Telecommunications Act, forcing the Bell companies 
either to create separate Internet subsidiaries or to share their 
lines with competitors and lease out valuable parts of their 
networks at rates the Bells consider too low. As a result, most 
of the Bells have refused to build these billion-dollar networks, 
arguing that to do so would be to give their competitors a free 
ride. The Bells say that the regulations should apply only to 
their monopoly voice networks and not to the nascent broadband 
market. But the five FCC commissioners have proposed applying the 
regulations to both networks--and refused to use their authority 
to limit the restrictions. 
	     ''These regulations are designed to limit (the Bells') 
power in the local voice market, but they are mistakenly being 
applied to the entirely different advanced data market,'' said 
McCain. The Arizona Republican blames the regulations for 
preventing all but 2 percent of U.S. households from gaining 
access to high-speed service. In rural states, such as early 
presidential battlegrounds Iowa and New Hampshire, the percentage 
is even lower. 
	     Republicans are not the only ones who believe the 
regulations inhibit the Internet's growth. Roy Neel, a longtime 
Gore adviser and now the top lobbyist for the Bells at the U.S. 
Telephone Association, said nationwide high-speed Internet 
service ''is simply not going to happen in the short term unless 
(the Bells) are allowed to build and operate networks in an 
efficient way. (The Bells) already have facilities in just about 
every home and business and are in the best position to upgrade 
them for broadband services.'' 
	     Another potential problem for Gore is the charge that the 
FCC has created an uneven playing field by imposing the rules on 
the Bells' phone lines but not on cable lines. By allowing AT&T 
Corp. to enter the broadband market through its purchase of cable 
giants Tele-Communications Inc. and MediaOne Group, the 
government is fostering a cable monopoly in the broadband 
Internet market, some Republicans reason. Critics say AT&T will 
ignore low-income households and high-cost rural areas for years 
while it recoups its multibillion-dollar investment in cable from 
lucrative businesses, urban customers, and residents of affluent 
areas. 
	     ''A year from now, we may have one choice for (high-speed 
Internet service) instead of 5,000 for (traditional Internet 
service),'' said Gregory C. Simon, a former White House domestic 
policy adviser to Gore and now a lobbyist for the OpenNet 
Coalition, which wants to require cable companies to open their 
networks to competitors as the Bells already do. 
	     The broadband regulations have generated interest among 
those in Congress who consider themselves plugged into Internet 
issues. A number of bills have been introduced in both Houses 
that would remove the regulations on the Bells, and one bill in 
particular would require cable companies to share their networks 
with Internet providers. 
	     How can a Republican candidate justify blaming Gore for 
the regulations? After all, they were implemented by the FCC, an 
independent regulatory agency. Neel and Simon, for example, blame 
the FCC for approving regulations that are ''out of line with the 
Vice President's vision.'' 
	     Republicans counter that the Clinton-Gore Administration 
nominated the five FCC commissioners. And Gore--as the 
Administration's telecommunications guru--''has to be held 
accountable for his appointments,'' said Rep. W.J. ''Billy'' 
Tauzin, R-La., the chairman of the House Commerce Committee's 
telecommunications panel and an informal adviser to the Bush 
campaign. 
	     Furthermore, the telecommunications industry has seen 
Gore's stamp on FCC regulations since early in his first term, 
when the Vice President was instrumental in nominating his high 
school friend and longtime adviser Reed Hundt in 1993 to head the 
agency as it prepared to implement the landmark and long-awaited 
Telecommunications Act of 1996--which would spawn the 
controversial regulations. Though Hundt's replacement, William E. 
Kennard, does not enjoy a chummy friendship with Gore, he has, so 
far, followed Hundt's lead. 
	     ''Clearly the FCC is getting its marching orders from the 
White House,'' said Tauzin. The GOP strategists think that by 
linking Gore to the broadband regulations, they may find the 
Achilles' heel in Gore's otherwise tech-savvy reputation. ''Gore 
has some vulnerability there,'' said Tauzin, who plans to 
introduce legislation to remove the regulations. And Thomas J. 
Tauke, an informal Bush adviser and top lobbyist for Bell 
Atlantic Corp., said that a number of Republican candidates are 
''beginning to focus on the issue.'' 
	     Republicans hope to use that focus to siphon off some of 
the high-tech money that might otherwise go into Gore campaign 
accounts. Telecom equipment makers such as Lucent Technologies 
Inc. and Nortel Networks (Northern Telecom Ltd.) are prime 
targets, as are such major computer manufacturers and chipmakers 
as Compaq Computer Corp. and Intel Corp. ''It doesn't take a 
rocket scientist to see that computer makers and chipmakers want 
to sell more computers and therefore need less regulation on 
broadband networks,'' said an official at BellSouth 
Telecommunications Inc. 
	     Tauzin, who visited Silicon Valley in mid-May to explore 
fund-raising opportunities for Bush, found that high-tech 
executives are pleased that Gore ''can talk broadband issues 
well.'' But talking the talk is not the same as walking the walk, 
Tauzin pointed out, adding: ''They are not quite happy with the 
way he walks.'' Tauzin said that companies dislike the FCC 
regulations and Gore's stance on legislation that would limit Y2K 
computer liability and raise export restrictions on encrypted 
software. 
	     Republican candidates are also examining whether 
broadband politics could interest rural-state voters, who are 
less likely to have access to high-speed Internet service. The 
issue may be a double-barreled victory for Republicans: By 
decrying a government regulation that may hamper the availability 
of broadband services in rural areas, a candidate would 
simultaneously be exhibiting the anti-regulatory credentials that 
tend to appeal to voters in conservative primaries. 
	     Suburban voters are a third target group. Demographic 
studies show that suburban residents are most likely to have 
Internet access and are also more likely to be aware of the 
issue, said Tauke, a former Iowa congressman. ''Whether it is a 
college student, yuppie, or soccer mom . . . they are the ones 
who are the most active in the usage of the Internet and take the 
greatest part in the world of e-commerce. If they become aware 
that they can get a better service and aren't, interest in the 
issue will spread from a relatively small one to a broader 
group.'' 
Gore's Defense 
	     But the Gore campaign maintains that the Internet Vice 
President is immune to attacks on the FCC regulations because 
voters credit him with the Internet's rapid growth. At least, so 
say a half-dozen current and former Gore advisers. ''I don't 
think they will actually have any significant effect on Gore,'' 
said Simon, the former White House aide. 
	     Just in case, the campaign is prepared to fire back. ''Al 
Gore's policies have created the greatest explosion in broadband 
investment that any country has ever seen,'' said Hundt, the 
longtime Gore aide and former FCC chairman. 
	     According to Hundt, Gore will claim that his policies 
have created the best information economy in the world--and the 
lowest costs for Internet access--resulting in an information 
economy ''that is the primary creator of the economic miracle of 
low inflation and high employment, high growth, and high 
productivity.'' 
	     Hundt also predicted that Gore will point to three 
actions that have accelerated the construction of high-speed wire 
line, wireless, and cable networks: Gore will take credit for 
championing the Telecommunications Act of 1996, which unleashed 
hundreds of upstarts into the local phone market; and for the 
Omnibus Budget Reconciliation Act of 1993, which created today's 
competitive wireless industry by authorizing the FCC to auction 
the wireless airwaves. Hundt thinks that Gore will highlight the 
FCC's role in scuttling AT&T's acquisition of Baby Bell SBC 
Communications Inc. in 1997--a veto that Hundt administered as 
FCC chairman--led ''directly'' to the long-distance behemoth's 
decision to invest $ 90 billion to enter the high-speed Internet 
market via cable. According to Hundt, ''Those three actions are 
almost precisely a vindication of the commitment to build an 
information superhighway that Gore has undertaken.'' 
	     GOP and Gore strategists agree that the presence of 
McCain in the presidential race will elevate Internet policy in 
the national debate. ''McCain will make it an issue just by being 
in the race,'' said Neel. As chairman of the Senate Commerce, 
Science, and Transportation Committee and the only Republican in 
the Senate to vote against the Telecommunications Act, McCain has 
gained unique credibility on the issue by fighting the FCC 
regulations at every turn. 
	     McCain, who shies from making personal attacks, told 
National Journal that he will highlight the regulations on the 
campaign trail, but will not hold Gore accountable for them. 
Instead, he blames Congress for enacting the 1996 law and the FCC 
for improperly implementing it. 
	     While other GOP candidates will tie Gore to the 
regulations, McCain has promised to emphasize that the rules have 
created a ''digital divide'' in American society between those 
who are connected to the Information Age and those who have been 
bypassed. 
	     McCain practiced his populist message in a mid-May speech 
as he introduced a bill to allow the Bells to skirt the broadband 
regulations. ''Information Age telecommunications services can 
serve as the great equalizer, eliminating the disadvantages of 
geographic isolation and socioeconomic status that have carried 
over from the Industrial Age. But unless these services are 
available to all Americans on fair and affordable terms, 
Industrial Age disadvantages will be perpetuated.'' 
	     Campaign strategists in both parties say the current 
battle over Gore's support of a program to hook up schools and 
libraries to the Internet by 2000 could foreshadow how voters 
will react to broadband Internet issues in the presidential race. 
The program, which is known as the e-rate, has been a lightning 
rod for attacks on Gore's overall Internet policies. Last year, 
McCain led the fight to abolish the program, saying it was funded 
by an illegal $ 2 billion tax on phone bills--dubbed the ''Gore 
tax.'' As a result, the FCC sliced nearly $ 1 billion from its 
funding. 
	     But now it's back. On May 27, the FCC restored the $ 1 
billion--inciting Republicans who claimed that more than 95 
percent of the money will pay for ''bureaucratic overhead and 
ripping up walls, repairing carpets, and even putting in new 
computers,'' according to a Republican National Committee press 
release. But legislation to kill the program has stalled in both 
chambers and McCain has quietly removed himself from the attack-- 
perhaps sensing an early Gore conquest. 
	     If the e-rate battle is a harbinger of the broadband 
battle to come, it shows that GOP efforts to paint Gore as the 
Internet's regulator may succeed only in taking the gloss off 
Gore's high-tech finish. On the other hand, given the rising 
importance of the Internet to middle-class suburban voters, a 
skillful Republican candidate could find this election's key 
voting group--the ''cyber moms.'' 
	     Brody Mullins covers telecommunications for National 
Journal Group's CongressDaily.