This story appeared on Network World at

http://www.networkworld.com/columnists/2005/080805bradner.html

'Net Insider

Making Verizon giddy

By Scott Bradner, Network World, 08/08/05

Scott Bradner

The first public step on a potentially long road to a replacement for the Telecommunications Act of 1996 has now been taken. Sen. John Ensign (R-Nev.) just introduced the Broadband Investment and Consumer Choice Act of 2005, which would replace large parts of the older act. I don't think anyone could claim with a straight face that this is a balanced proposal.

If anyone somehow thought that, they would have been quickly corrected by the almost giddy reaction from traditional carriers, such as Verizon, and their trade associations. The 72-page bill introduced by Ensign, chair of the Senate Commerce Committee's Technology, Innovation and Competitiveness Subcommittee, is far from all bad - but also far from all good.

The bill removes most facilities-based telecom and satellite TV providers from any state, federal or local regulation such as regarding prices or quality. The most mentioned effect of this is that local governments would not be able to stop video service deployment by telephone companies.

The only exception is that incumbent local exchange carriers (ILEC) would have to continue to make available their copper access loops and sell telecom services at wholesale rates to competitors for a while. Providers of broadband (defined as anything more than 64K bit/sec) would not be able to block customer access to legal content or services, including VoIP. But they could offer a special reduced-access service for those that want blocking. Under the bill, the ILECs would have to offer a basic telephone service at current rates throughout their territories, with the quality characteristics defined by the FCC, at least until 2010.

The bill does not actually ban municipally owned networks but it does put restrictions on them that will be hard to overcome, so the effect is about the same. What the bill does not do is back away from the old and restrictive service-based thinking. The bill still refers to broadband, telephone, satellite TV and video services and treats them differently.

Other than requiring that ILECs offer basic telephone service, because of the historical importance of such a service, and sell access to their copper access loops, because of the regulated monopoly under which this was installed, there should be almost no regulations.

Half of this bill could go away if it just said the above and that governments could not control what services different connectivity providers wanted to offer.

The bill also should state that connectivity providers could not restrict or affect the performance of customer access to legal services offered by third parties, except in a provider-neutral way to protect their network. The same logic should apply to controlling local rights of way, which the bill addresses only for video services providers.

The proposal does not address the Universal Service Fund, state or local taxes on broadband services or services provided over broadband. Neither does it address wiretapping legal intercepts (or other law enforcement needs) and any final bill will need to do so. This is an interesting first step, but I will say that the image of a giddy Verizon does something unpleasant to my stomach.

Disclaimer: Even though being giddy at Harvard is not all that uncommon, I know of no university view on the giddiness level of phone companies.