Major Reform of Telecom Act Proposed

by Roy Mark

Legislation calls for eliminating many current state and federal rules for delivering advanced communications services.

WASHINGTON -- Sweeping legislation to deregulate the U.S. telecommunications market finally hit Congress today. Long awaited and much anticipated, the bill calls for stripping away many of the current federal and state rules for the delivery of voice, video and data services.

Introduced by Sen. John Ensign (R-Nev.) and co-sponsored by Sen. John McCain (R-Ariz.), the Broadband Investment and Consumer Choice Act aims to level the playing field between telephone, cable and satellite companies while opening the door for the delivery of emerging broadband services.

Ensign's bill specifically calls for eliminating state and local franchise requirements for all video providers, including telephone companies moving into the field. Existing cable franchises would cease to exist upon enactment of the bill.

Ensign said state and local authorities would be protected from financial losses under his bill by requiring video providers that use existing rights of way to pay local authorities a fee of up to five percent of gross video revenues.

Broadband services, regardless of technology platform, are largely freed from federal and state regulation at both the wholesale and retail levels. The bill further states that consumers may not be denied access to any legal content provided over the facilities used for broadband communications, including Voice over IP port blocking.

"Americans' ingenuity and creativity can provide more choices for consumers if government bureaucrats will get out of the way and allow our companies to compete," Ensign said at a Capitol Hill press conference. "Technology is moving forward but current laws are not."

As for interconnection fees between broadband providers and facilities-based providers, the legislation says the parties are required to establish "commercial arrangements." The Federal Communications Commission (FCC) would only intervene if they fail to reach an agreement.

The legislation also targets state and local governments considering establishing their own broadband networks. Under the bill, local municipalities must give the private sector notice before going into business for themselves and allow non-government providers to bid on the project.

"We need to modernize our communications laws. Instead of stifling, government-managed competition, we need to move to market-controlled forces," Ensign said. "We need to get the investment dollars flowing."

Ensign cited the cell phone industry as a model of innovation with minimum government regulation. "This is the type of competition we want between cable and telephone companies," he said.

Incumbent telephone companies will be required to continue to provide unbundled access to their copper lines until 2011 and to make narrowband communications available for resale at rates established by the FCC.

The FCC also retains the authority granted in the 1996 Telecommunications Act to require service providers to comply with wiretapping requests. In addition, Ensign's bill retains prohibitions on obscene Internet materials.

The bill does not, however, deal with reforming the Universal Service Fund (USF), an issue Ensign said he was leaving to Senate Commerce Committee Chairman Ted Stevens (R-Alaska).

Ensign's legislation drew a flurry of statements in support of telecom reform.

"Senator Ensign has produced the most deregulatory communications bill ever introduced in Congress, and, commendably so, in light of the vast marketplace changes that have occurred since passage of the 1996 act," said Randy May, a senior fellow at the Progress and Freedom Foundation.

Roger Cochetti, group director for U.S. public policy at the Computing Technology Industry Association, added, "Since the Telecommunications Act of 1996, the convergence of markets, the rapid advance of information and communications technology, and the ubiquity of the Internet have pushed the 96 Act to its limits.

Cochetti said while the Telecom Act did much to update the nation's regulatory structure, "It is timely and appropriate that we revisit that landmark legislation."

This article was originally published on Wednesday Jul 27th 2005