Copyright 2001 The Buffalo News  
Buffalo News (New York)
June 4, 2001 Monday, FINAL EDITION
SECTION: EDITORIAL PAGE, Pg.B4

LENGTH: 504 words

HEADLINE: TELECOMMUNICATIONS LAW

BODY:
Telecommunications legislation advanced recently by a House committee favors the big guns while edging out the competition. Consumers will pay, in the end, with fewer choices.

Supporters say the Internet Freedom and Broadband Deployment Act of 2001, sponsored by Reps. W.J. "Billy" Tauzin, R-La., and John Dingell, D-Mich., will help accelerate the deployment of broadband Internet services throughout the country. Broadband delivers the Internet faster, and also frees up phones while people are online.

The problem with this bill, which sounds good on its face, is that it supports a monopoly by the Baby Bells.

Fortunately, that monopoly is not felt as strongly in New York State as it is elsewhere, mainly due to the Telecommunications Act of 1996, which dealt strictly with voice communications. That law says that if a telephone company wants to offer long-distance service, it has to open its phone lines to competitors. Here, Verizon wanted to provide long-distance service, so it was obligated to open its lines to competitors.

However, such language is not written into the Internet Freedom and Broadband Deployment Act, which deals with data. That means that if this bill passes the House and Senate in its present form, the Baby Bells, or any incumbent system, will be able to expand its high-speed Internet services to rural and underserved areas without being required to open up those same data lines to Internet competitors.

In effect, as Mark Cooper of the Consumer Federation of America said, this bill would allow the Bells to maintain their local phone monopolies in almost every state and, at the same time, establish a new nationwide monopoly in the broadband services market.

The telephone companies argue that the cable industry, which holds 70 percent of the broadband market, is not subject to regulation. That point is well taken. Only 30 percent of the market is divvied up among the phone companies -- in our case Verizon, which provides Digital Subscriber Lines, satellite companies and wireless players offering fixed wireless.

The telephone companies also argue that expanding the technology requires a huge investment, and if they have to turn around and sell that technology to competitors below cost, they would have less incentive to deploy the services. Instead, their competitors would still have access to voice lines they could upgrade to provide high-speed Internet access.

Sounds good, but if this measure passes, the small guys will more than likely get priced out of the game. Instead, the focus will be on the incumbents, such as telephone companies and cable companies. Only a few facility-based competitors, those that install their own lines, will likely survive, along with smaller regionally focused companies that build their own facilities and also depend, in part, on the incumbents.

Without language that encourages competition, the Tauzin-Dingell bill is not the best way to ensure the spread of reasonably priced high-speed Internet service.

LOAD-DATE: June 6, 2001