On October 26, 1999, Senator Brownback released a staff working draft of legislation that amends crucial pro-competition provisions in the 1996 Telecommunications Act. However well intentioned, this legislation could cause great harm to the deployment of broadband services. The importance of competition in the data communications marketplace is highlighted by the fact that data communications now constitute well over half the communications carried by the public telephone network. And, in three to four years, data communications will represent 90% of the traffic on the public network.

The Brownback revised draft:

1. Repeals two essential market-opening provisions in the Telecom Act. One, the requirement that the incumbent local exchange carrier (ILEC) provide access to data communications networks equipment and facilities. Two, the ILEC obligation to permit the resale, at a discounted price, of the ILEC’s data communications services. The repeal is implemented when 70% of the ILEC’s local loops are capable of carrying digital subscriber line services.
2. Mandates total deregulation of higher-speed data communications services based on the presence of just one broadband competitor.
3. Repeals the pro-competitive requirement that incumbent local exchange carriers (ILECs) provide access to the incumbent’s telecommunications equipment that is housed in enclosures (i.e., “remote terminals”) outside of telephone company buildings.
4. Repeals the pro-competitive requirement that incumbent local exchange carriers permit the resale of their data communications services.

The Competitive Broadband Coalition shares Senator Brownback’s goal of widespread availability of broadband services. Encouraging and enhancing competition is the best method for accelerating the availability of broadband services. Vigorous enforcement of the Telecom Act’s pro-competitive provisions—requirements that GTE and the Bell companies open their monopoly local telephone markets and networks to competition—will broaden the geographical reach of high-speed data communications services.

Brownback Legislation Unnecessary

Unfortunately, Senator Brownback’s legislation would set back deployment of broadband facilities and services. Repeal of the Telecom Act’s interconnection requirements for ILEC data communications services would do great harm to broadband competition. The history of competition for telecommunications services also demonstrates the importance of requiring ILECs to permit the resale of their telecommunications services. Allowing the incumbent local telephone company to prohibit the resale of its services will impede consumer choice of broadband services.

FCC Already Exempted ILEC Data Networks From Act’s Market Opening Requirements

The FCC has already largely exempted telecommunications equipment used for high-speed data communications services from the Telecom Act’s interconnection requirements. Also, the FCC exempts ILEC bulk offerings of high-speed connections to the Internet sold to large Internet Service Providers from the Telecom Act’s requirement that ILECs offer telecommunications services for resale at a discount. SBC and Bell Atlantic can take advantage of another additional loophole: for services offered through their separate affiliate, SBC and Bell Atlantic, can deny competitors access to network equipment facilities and prohibit the resale of those services. Consumers and businesses clamoring for high-speed connections to the Internet provide the RBOCs and GTE all the incentive they need to rapidly deploy local broadband telecommunications services. Recent announcements by SBC and GTE of accelerated plans for building broadband telecommunications facilities demonstrate that no legislation is necessary to further the deployment of broadband telecommunications and Internet access services.

Competitors Require Access to ILEC Facilities and Equipment

Competitive firms rely on facilities and services provided by the monopoly Bell Companies and GTE pursuant to the pro-competition requirements of the Telecom Act. In most instances, the most efficient means for a competitor to serve its consumers is to co-locate its equipment with the incumbent local telephone company. Under today’s rules, if space is available, a competitor can co-locate its equipment in an incumbent local telephone company’s building or in a remote terminal (an equipment enclosure in the street, on a telephone pole, or underground). This co-location requirement is essential for facilities-based competition to take hold and thrive in the local telephone marketplace. Competitive providers of broadband telecommunications services are requesting collocation in thousands of ILEC buildings. The repeal of the RBOCs’ and GTE’s obligation to co-locate competitor’s equipment in remote terminals would drastically curtail consumer choice of local broadband telecommunications services.

Competition in Internet Access Service Marketplace Threatened

Deregulating an ILEC’s data communications services based on the presence of just one competitor gives the ILEC the ability to:

1. Raise the price of high-speed connections to the Internet to an unaffiliated ISP
2. Discriminate against non-affiliated Internet Service Providers.

The Brownback approach to deregulation would permit an ILEC who faces any new niche competition to bar all Internet Service providers from using the ILEC’s high-speed data communications services. The 7,000 Internet Service Providers are then left using slow, technologically obsolescent, analog telephone lines. Thus, consumers would have only one choice for broadband connections to the Internet, the incumbent telephone company.

In summary, robust competition for broadband telecommunications and Internet access services will develop if Congress focuses on vigilant and vigorous enforcement of the pro-competition provisions of the Telecom Act.

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The Competitive Broadband Coalition members include the Association of Communications Enterprises (ASCENT), the Association for Local Telecommunications Services (ALTS), AT&T, the Commercial Internet eXchange Association (CIX), CompTel (Competitive Telecommunications Association), Cable & Wireless, Information Technology Association of America (ITAA), Montana Telecommunications Association, Personal Communications Industry Association (PCIA), Sprint, Touch America and WorldCom. More information can be found at http://www.competitivebroadband.org/1041/home.jsp