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To: Sir Auric Goldfinger who wrote (1192)	5/10/2001 8:04:28 PM
From: Jon Taulbee	Read Replies (1) \| Respond to of 1226

House Committee Approves Bill Which Opens Up High-Speed Internet Service Associated Press WASHINGTON -- A measure that would make it easier for the Baby Bells to offer high-speed Internet access won approval 32-23 from the House Commerce Committee. The bill's sponsors -- Committee Chairman Billy Tauzin (R., La.) and Rep. John Dingell of Michigan, the committee's top Democrat -- say the legislation will bring the next generation of Web services to more Americans, especially those in rural and underserved areas. The bill would free SBC Communications Inc. (SBC), Verizon Communications Inc. (VZ), Qwest Communications International Inc. (Q) and BellSouth Corp. (BLS) to carry Internet traffic in their calling region without having to first meet strict government requirements that they open their local-phone markets to competition. The measure also covers important parts of the Bells' network that provide new online services. The companies wouldn't have to make those portions of the networks available for lease to rivals. Instead, competing businesses would have to build their own equipment. With those regulations loosened, the Baby Bells say they would have greater economic incentive and capability to bring high-speed Internet connections -- which is dozens of times quicker than standard dial-up service -- to consumers nationwide. Only a small fraction of Web users, mostly in cities and dense areas, have such capability now. To hold the Baby Bells to that pledge, the Commerce Committee included an amendment in the bill that would set benchmarks for the companies to meet in rolling out new Internet services to communities. The amendment says the local- phone giants would have to be able to provide high-speed Internet service in 20% of their central offices, or main telephone-switching centers, within a year. The target grows by 20 percentage points each year until full service must be reached within five years. The Baby Bells could use their phone lines to deliver the fast connections and meet the requirements, or employ other technologies -- like satellite or wireless capabilities -- to provide customers in hard-to-reach places with Internet service. "It does in fact ensure that center cities and rural areas won't be left out," Rep. Tauzin said. The Baby Bells pointed out that the cable industry, their chief competitor in the market for high-speed Internet service, doesn't face such requirements for offering service. "That certainly concerns us," said SBC's John Emra. But the companies scored a major victory when a measure that would have forced them to share high-speed Internet equipment with rivals was defeated. "The sole purpose of this bill is to kill local competition," said H. Russell Frisby, head of CompTel, a trade association that represents rivals of the Baby Bells. He said consumers would suffer with higher rates and fewer choices for their Internet and phone services. John Windhausen Jr., president of the Association for Local Telecommunications Services, which represents Bell competitors, said the split committee vote signals that the bill could face an uphill battle before the full House. "This is far from a done deal," he added. Backlash to the Commerce Committee's bill resulted last week in another House proposal which takes an opposite tack. The measure was written by two members of the House Judiciary Committee, whose chairman has already flagged his antitrust concerns regarding the Commerce Committee's proposal. The Judiciary bill reigns the companies in further by preventing the Baby Bells from selling long-distance service in their markets if competitors have 15% or less market share of the local-phone business. The bill also clarifies that antitrust provisions pertain to the companies and sets up a process to quickly resolve disputes with competitors trying to connect to the Baby Bells' networks. Penalties would increase for failure to interconnect. Finally, the legislation would bar taxes on broadband services and provide direct loans and loan guarantees to spur deployment in underserved areas. The Judiciary measure is likely to face stiff opposition, but could be used as one tool to block Rep. Tauzin's proposal. Copyright (c) 2001 Dow Jones & Company, Inc. All Rights Reserved Copyright (C) 2001 Dow Jones & Company, Inc. All Rights Reserved.