“Good Morning.  I would like to welcome our guests this morning and thank Members for attending this important hearing.  Today, this committee will hear testimony regarding the Internet Freedom and Broadband Deployment Act, legislation that I introduced yesterday with Mr. Dingell and many of our colleagues.  I am delighted that we are conducting this hearing today so that all of the members of this committee may participate in a discussion of the bill’s merit.  And I am also delighted that Chairman Upton will mark the bill up in his subcommittee tomorrow.

“Mr. Dingell and I have worked with many of our colleagues for the past two years attempting to finish the deregulation begun by the Telecommunications Act of 1996.  In 1999, we introduced H.R. 2420, a bill to deregulate the provision of high speed data and Internet access services.  We reintroduced that bill yesterday, and this hearing will mark the beginning of a process through which the 107th Congress will consider this legislation.

            “Broadband services offer consumers new ways to communicate, learn, do business, and entertainment themselves.  But broadband services are not nearly as available as their slower, dial-up counterparts.  While broadband deployment has begun to speed up in urban and densely-populated suburban areas, broadband deployment is almost nonexistent in rural areas.

            “Many of the reasons for the disparity in the deployment of broadband services are economic.  Broadband is a capital-intensive investment, the costs of which can be recovered more rapidly if they are being spread over more, and more-lucrative, customers.  But that does not mean that Congress should not be concerned about the disparity in deployment.  Areas in which broadband services are not available are in jeopardy of being left out of the Information Age.  Internet-dependent businesses will not locate in rural areas if broadband is unavailable.

            “To give carriers a greater economic incentive to deploy broadband services more rapidly everywhere in the United States, Congress needs to complete the deregulation begun by the Telecommunications Act by deregulating broadband services.  Currently, there are regulations imposed upon the broadband services and facilities provided by incumbent local exchange carriers (ILECs) that are not imposed upon any other broadband carriers. 

            “ILECs must provide their facilities, even brand new facilities, on an unbundled basis to competitors at regulated prices.  ILECs must resell their broadband services to competitors at wholesale rates, which no other carrier is required to do.  In addition, the Bells are prohibited from offering long-distance data services, which deprives them of the efficiencies that can be gained from offering end-to-end services.

            “These restrictions give the ILECs little incentive to deploy new services and facilities.  Why spend the money to roll out broadband when your competitors can use your own network to take your customers?  These types of rules might have made sense for basic telephone service.  But cable companies control 75 percent of the broadband market, so the ILECs cannot be considered dominant by any stretch of the imagination. 

            “I am not suggesting that we subject the cable companies to the same rules that are currently being applied to the ILECs.  I applaud the cable companies for aggressively rolling out broadband services and I hope that government continues to stay out of their way so that the cable companies can continue to do so.  But what it means is that ILECs should have deregulatory parity with cable companies in the broadband market. 

“Broadband is a nascent market that does not need regulation.  What it needs is the ability to thrive, similar to what happened with the wireless industry when government stayed out of its way.  Wireless thrived in the absence of regulation and broadband will as well.  But broadband needs to be deregulated, and we have introduced this bill to accomplish that goal.

            “This bill provides the right amount of deregulation for broadband services.  It rejects the application of antiquated telephone rules to a new market like broadband.  And it seeks to maximize investment and innovation in new facilities. 

            “After many strong years of growth, our tech sector is experiencing very difficult times.  How can we help stimulate the tech sector?  If we deregulate the broadband market, we will witness an acceleration in broadband deployment.  As we will hear today from witnesses like Peter Pitsch of Intel and Tim Regan of Corning, an acceleration in broadband deployment is exactly what the tech sector needs to get itself back on its feet.  Broadband services will bring new opportunities to many of our constituents.  And the deployment of broadband facilities will hopefully restore what has become the most important sector of our economy.

            “I look forward to testimony from our witnesses today.  And I look forward to my colleagues’ participation in this extremely important debate.”