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Telecom competition near death

If the Baby Bell lobby has its way, the 1996 Telecom Act will be rendered defunct by the current crop of lawmakers. 4/30 ReleVents hed: Telecom competition near death dek: If the Baby Bell lobby has its way, the 1996 Telecom Act will be rendered defunct by the current crop of lawmakers. By James Mathewson

Regular readers know that telecommunications competition is a pet topic of mine. I have written more than a dozen columns on the subject in the past year, and each time I find myself more outraged at how one-sided legal trends have been–in favor of the Baby Bells and against consumers and competition.

The 1996 Telecommunications Act was supposed to enable local phone competition by giving Baby Bells incentive to open up their networks fairly, and by leveling the playing fields in other ways. Most of those other field levelers face certain death (see The end of CLECs?). The last bastion of the ’96 Act is the incentive that Incumbent Local Exchange Carriers (ILECs or Baby Bells) can offer long-distance service if they prove that local phone competition exists. To date, none of the carriers have been able to satisfy the conditions of the Act, though some have subverted the rules in certain markets (Qwest and Verizon).

Yet the Baby Bells are getting impatient. They want long-distance business now, and are prepared to spend whatever it takes in soft political dollars to get the ’96 provision reversed. Fortunately, as a news item on our site today describes, it looks as though the provision will stand for a while. A bill (S. 1542) brought by House Energy and Commerce Committee Chairman Billy Tauzin and ranking Democrat John Dingell, Michigan, that would nullify the ’96 provision got a skeptical reception from other members of Congress, who are beginning to sense the growing storm clouds on the horizon from concerned constituents. (You’ve probably seen the ads in your local area that raise awareness of impending doom at the hands of the Baby Bells.)

Some of the testimony quoted in the story is worth repeating. First, Charles McMinn, chairman of Covad Communications, the last surviving third-party DSL provider, said that if the bill is passed, he would have no choice but to withdraw from the consumer DSL market, cutting off 50,000 current customers. Add this to similar numbers of abandoned Northpoint and Flashcom customers, and we have a huge chunk of angry consumers.

Second, Tauzin himself basically said, “Who cares? Give the business to cable and wireless.” That came on the heals of Tauzin trying to use his new seat atop the Commerce Committee to call a vote on the bill before the standard 48 hours of testimony, when he sensed real concern from former cosponsors of the bill. What’s the rush? He wants this thing passed before his colleagues have a chance to fully consider it, because he knows he won’t get it through if they do fully consider it.

Third, and most important, the bill’s language would cause huge administrative nightmares down the road. Basically, it separates telecommunications services into analog and digital. But in a few years, most, if not all, telephone signals will be digital (i.e., voice over IP). Enforcing this law under those conditions would be nearly impossible.

Clearly, Tauzin has not done his homework and is trying to push this thing through anyway. My guess is there are enough things wrong with this bill that it will have a hard time getting out of committee, and even if it gets out of committee and passes the full house, it will not make it past the Senate gauntlet. This is good news for the time being, but I’m afraid that the forces aligned against local telecom competition will continue to push for their most generous constituents–the Baby Bells.

James Mathewson is editorial director of ComputerUser.com and ComputerUser magazine.

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