Copyright 2002 Times Publishing Company  
St. Petersburg Times (Florida)
February 22, 2002, Friday, 0 South Pinellas Edition
SECTION: EDITORIAL; EDITORIALS; Pg. 20A

LENGTH: 961 words

HEADLINE: Broadband captives

BODY:
 America, hold on to your wallets and give up hope for accessible high-speed connections to the Internet. A telecommunications bill in the U.S. House of Representatives would turn the so-called Baby Bell telephone companies into monopolistic bullies that make former parent Ma Bell look like a 98-pound weakling. The bill, sponsored by conservative Rep. Billy Tauzin, R-La., and liberal Rep. John Dingell, D-Mich., would gut the competitive mandates of the Telecommunications Act of 1996 and put the fate of high-speed Internet access over phone lines in the hands of local phone companies, which would have no incentive to lower prices or innovate.

Tauzin and Dingell have titled their bill the "Internet Freedom and Broadband Deployment Act." In truth, their bill would ensure little freedom for captive consumers and would likely slow broadband deployment, the fast connection to the Internet that many believe could spur the economy by billions of dollars a year if enough households connect.

Deregulation of the telecommunications industry has followed a jagged course. The breakup of Ma Bell in 1984 was intended to bring competition to long-distance calling, and it did. Today, consumers have many choices for a long-distance carrier, and prices have plunged. The government's effort to spark competition for local phone service and high-speed Internet access over phone lines, however, has been a failure. The villains in that battle are the local phone companies - mainly the original Baby Bells.

A main goal of the Telecommunications Act of 1996 was to spur competition for local phone and Internet services. The effort was met with a wall of noncompliance by the Bells. Rather than competing with each other, they merged, so that only four phone companies exist from the original seven Baby Bells and GTE. Locally, GTE was acquired by Bell Atlantic (as was Nynex) to form Verizon, the behemoth that serves the Tampa Bay area.

The law says the Bells have to cooperate with other companies that want to compete over existing phone lines. To ensure cooperation, the law says the Bells can't offer long-distance or Internet services until they allow competitors into the local phone markets. At first, it appeared some of the Bells were complying. New startup companies began to offer local phone service and high-speed Internet connections, and the future looked bright, briefly. But behind the scenes, the Bells were undermining the effort. They sued the Federal Communications Commission over its interpretation of the law, and the new competitors have accused some of the Bells of spying on them, double-billing their customers and providing degraded service to those who switched.

The Bells have successfully resisted competition. Before the 1996 act was passed, they had 94 percent of local phone business. Now, they have about 93 percent. However, the act threatened their control of the lucrative DSL (digital subscriber line, or high-speed) access to the Internet. So rather than opening themselves to competition, the Bells set out to change the law.

The Tauzin-Dingell bill (HR 1542) would change the 1996 act and allow the Bells not only to provide high-speed Internet access over their telephone lines, but also to exclude competitors. In addition, the FCC would be prohibited from regulating the phone companies' new monopoly. Currently, some consumers are able to connect to the Internet through their TV cable or satellite dish, but many Americans are at the mercy of the local phone company for such services, and the cost is prohibitive.

The Bells say they will be motivated to expand high-speed Internet service to more customers if they don't have to compete with other companies, but that defies logic. Monopolistic power usually raises costs, creates artificial shortages and stifles innovation. "There is no real consumer choice without competition, and there is no real competition without competitors," concluded a study of the law by telecommunications experts William H. Lehr and James K. Glassman (available online at http://ebusiness.mit.edu). By comparison, only through real competition did consumers gain lower costs and more choices for long-distance and wireless telephone services.

The Tauzin-Dingell bill is expected to be voted on by the House next week. It has many supporters, and for good reason. The telephone industry, led by the Bells, upped its contributions to political candidates to almost $ 21-million in 2000. "The industry knew (the bill) was going to be considered, and they were going to put all they could behind it to make sure it came out the way they wanted it to," Steven Weiss, spokesman for the Center for Responsive Politics, told the Washington Post.

The phone industry also hedged its bet. It convinced the FCC to propose a recent rule change that would accomplish the same outcome as the House bill - allowing the Bells to gain a monopoly in high-speed Internet services over phone lines. So supporters of competition will have to fight a two-front battle.

The former Baby Bells, like Frankenstein's offspring, have grown into more dangerous monsters than the parent. The companies have stifled competition for local phone service. Now they want to create a new monopoly for Internet connections that will harm consumers and the overall economy. This gift is being offered up by a compliant Congress and FCC, but it should not be tolerated.

Members of Congress who say they care about their constituents should oppose the Tauzin-Dingell bill. And everyone who has been overcharged and treated shabbily by the local phone company should let Congress and the FCC know that the federal government should be making the bullies play fair, not helping them fleece America.



LOAD-DATE: February 22, 2002