[July 28, 2005]

Industry Reactions to Ensign Bill Mixed

By TED GLANZER
TMCnet Communications and Broadband Columnist

It did not take long for industry to weigh in on Sen. John Ensign's deregulatory telecom legislation that was introduced before the Senate on Wednesday.

There's a lot to talk about.

Indeed, the Broadband Investment and Consumer Choice Act of 2005 (BICCA) calls for sweeping changes as to how communications services are regulated, substituting "stifling government managed competition" with a market-based approach in which consumers choose the best products and services at the best prices.


The light regulatory touch, according to Sen. Ensign, will spur investment, competition, and innovation in the marketplace.

Predictably, telecom carriers lauded the bill, which would eliminate the requirement to obtain local franchise agreements to provide video services. Thus, telcos such as Verizon and SBC would be able to launch their IP video services more quickly.

Additionally, the bill does not require video service providers to build out their systems in any particular manner.

"We applaud Senator Ensign for introducing legislation to bring our communications laws into the 21st century," Peter B. Davis, Verizon senior vice president for government relations, said in a prepared statement. "The Ensign bill puts consumers first by enabling people to choose from the expanding array of choices made possible by changes in technology and the marketplace."

While the legislation would eliminate the requirement for telcos to obtain local franchise agreements, states would have the option to collect up to 5 percent of telcos' video revenues.

The cable industry also had kind words for the legislation because it "seeks to promote competition and innovation and treats like services alike," according to National Cable and Telecommunications Association President Kyle McSlarrow.

The legislation also contains several provisions prohibiting broadband service providers from blocking voice over Internet Protocol, or any legal content for that matter, from consumers.

Not everyone in the industry, however, viewed the bill through rose-colored glasses.

Indeed, one industry association that represents competitive telecommunications companies vehemently opposed the legislation, going to far as to conclude that "the American economy would suffer" if it became law.

"Overall, the bill is a big step backward," Earl Comstock, president of CompTel, continued. "It would re-monopolize communications networks resulting in fewer choices, less innovation and higher prices for consumers. Nascent technologies such as VoIP would be killed in the cradle under this regime because entrepreneurs would be denied the nondiscriminatory access to infrastructure they need to deliver their cutting edge products and services."

Ensign's bill does not eliminate municipal broadband deployment. If a municipality chooses to offer broadband services to its residents, it must first give notice to and permit non-government entities to bid to provide the service. Preference must be given to non-government entities in the bidding process.

Municipalities that already offer broadband services to their residents and businesses would be grandfathered.

"The provision rests on numerous false assumptions," municipal broadband expert Jim Baller, of Washington, D.C.-based The Baller Herbst Law Group, said in a statement. "Furthermore, the procedures set forth in the bill are unnecessary, unworkable and counterproductive. At best, they would result in time-consuming, expensive, burdensome, and contentious delays and possibly years of litigation. Such procedures have no place in a bill that is intended to speed up America’s recovery of its leadership in the emerging broadband-based global economy."

Additionally, the grumbling at the grassroots level started almost immediately. Indeed, the definition of "broadband communications service" drew the ire of a group of people who monitor telecommunications regulations so much that it set off an e-mail chain that has carried on for the better part the last two business days.

Specifically, the bill defines broadband service as the transmission of communications at greater than 64 Kbps, which is slightly – and only slightly – faster than dial-up.

As one member of the group stated in an e-mail, "We all have broadband!"

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Ted Glanzer is assistant editor for TMCnet. For more articles by Ted Glanzer, please visit:

http://www.tmcnet.com/tmcnet/columnists/columnist.aspx?id=100033&nm=Ted%20Gl
anzer

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