Frequently Asked Questions on
"Tauzin-Dingell" (H.R. 1542)
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 Actīs 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 billīs 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.
- 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 wonīt be for at least
3-5 years.
- 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.
- 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 donīt pay for
the service.
- The Bottom line is Bell companies will still have a strong incentive
to meet Section 271 checklist - itīs the only way to effectively compete
with the major long distance companies for voice long distance
customers.
How does the bill address the cable "open access" question?
- 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.
While open access may be a worthy
policy goal, the bill accepts the proposition that for most cable
systems it is technologically infeasible to build into the distribution
platform. Thatīs why the legislation makes sure the telephone platform
remains open, so consumers will have a choice.
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