Senate Democrats Oppose Easing Internet-Data Rules on Baby Bells
Associated Press
WASHINGTON -- Senators who oversee the telecommunications industry signaled their firm opposition to a House measure that would loosen the reins on the nation's Baby Bells.
The legislation, sponsored by House Commerce Committee Chairman Billy Tauzin ( R., La.) and ranking Democrat John Dingell of Michigan, would make it easier for the four regional Bell companies to carry Internet traffic long-distance within their regions.
It essentially would allow the Baby Bells -- Qwest Communications International Inc. (Q), Verizon Communications Inc. (VZ), SBC Communications ( SBC) and BellSouth Corp. (BLS) -- to sidestep key provisions of the 1996 Telecommunications Act, which required them to open their local-phone markets to competition before they could provide voice or data long-distance service.
The Commerce Committee approved the Tauzin-Dingell bill last month, but the momentum driving the bill toward a vote by the full House hit a bump last week after the Judiciary Committee rejected the measure. House leaders must decide the next step.
Even if the bill clears the House, key Senate Democrats indicated Tuesday the measure would face an unwelcome reception there.
New Commerce Committee Chairman Ernest Hollings (D., S.C.) took aim at the Baby Bells for seeking to undo portions of the 1996 law that they lobbied Congress to enact. "The ones who begged for this thing are putting up a Broadway show here in Washington," he said at a hearing on local-phone competition. "All we've got to do is enforce the law."
Sen. Byron Dorgan (D., N.D.) said the Senate will slow down some of the speed the Tauzin-Dingell measure picked up in the House. "I don't think the Senate is prepared to pass" the bill, he added.
Rep. Ed Markey (D., Mass.) urged the senators to send a strong message that the bill would not make it through the Senate. He testified before Sen. Hollings' committee that doing so would give the Baby Bells an incentive to open their markets quickly to rivals. Rep. Markey has been a vocal opponent of the Tauzin-Dingell measure.
Rivals to the Baby Bells also want senators to publicly oppose the bill. They say the measure has created uncertainty in the financial markets and has helped to freeze up funding for new companies.
"Everybody started wondering whether the (1996 Act) was going to be overturned," said Clark McLeod, chairman of McLeodUSA Inc. (MCLD), which competes against the Baby Bells in 25 states. "You get the stock market nervous about Congress."
The Baby Bells insist that competitors have still managed to snag a sizable chunk of their market share. Government statistics show that rival local-phone firms now control about 8.5% of the nation's phone lines -- double the number they had at the end of 1999.
BellSouth executive Margaret Greene said competition has flourished since Congress passed 1996, but said the government hasn't eased its restrictions on the Baby Bells as the law had promised. "Every aspect of our business is micromanaged," Ms. Greene said. "We are as far away from deregulation as you can possibly imagine."
The Baby Bells say the Tauzin-Dingell measure would give them greater financial incentive to introduce high-speed Internet access to all parts of the country. That argument resounds with lawmakers from rural states where many residents can't get fast connections.
AT&T Corp. (T), which has campaigned heavily against the bill, says the Baby Bells can already offer fast Internet service in rural areas. "This is a transparent effort to exploit digital divide concerns," AT&T Chairman Michael Armstrong told lawmakers. The long-distance giant competes against the Baby Bells in the market for high-speed Internet service.
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