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AFTER MANY PROMISES, TAUZIN-DINGELL BILL CLEARS TELECOM PANEL

Despite 14 dissenting votes, House Telecom Subcommittee cleared bill to deregulate Bell provision of data services (HR- 1254) Thurs., but not before members made several changes and extracted promises from bill’s sponsors to incorporate several more at full Commerce Committee markup. Sponsors, Committee Chmn. Tauzin (R-La.) and ranking Democrat Dingell (Mich.) did manage to fend off amendments that would have gutted bill, and both sides left claiming 6-hour markup was victory for measure’s long-term chances.

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“We weathered the toughest amendments today,” said Tauzin spokesman Ken Johnson. “Most of the amendments [that Tauzin and Dingell promised to work on], if we can reach a compromise, will help the bill, not hurt it… Given what’s at stake, [markup] was a little smoother than we expected.” “It’s all good,” agreed USTA Pres. Gary Lytle. “We would have liked a few more votes, a little less contention on several issues… [but] a win is a win is a win.” However, CompTel Pres. Russell Frisby said events made bill even less likely to “fly in the Senate.” He said it was important that markup “focused on the key issue” -- contention that Bells essentially would get full Sec. 271 long distance relief from bill because voice traffic soon would be indistinguishable from data, which bill would deregulate.

Markup followed long night for Telecom panel and especially staff, many of whom were up into early morning drafting hurried amendments. As result, on several points compromise appeared to be reached but legislative language was deemed inadequate. Tauzin-Dingell opponents continued to harp on what they saw as unnecessary haste to markup, and Rep. Gordon (D-Tenn.) began session with motion to postpone it until next week. “This is wrong to go forward today,” he said, saying he had waited until 2 a.m. and still hadn’t seen all amendments. His motion was tabled 17-10.

Panel cleared 2 amendments by Rep. Cox (R-Cal.) late in session; impact still was being sorted out. More straightforward of 2 would prevent FCC from imposing fees, charges or tariffs on Internet services. That would seem to include universal service collections, said aide to Rep. Markey (D-Mass.), who suggested point was to make bill even less palatable for Senate by making Internet telephony off-limits for universal service. Other would prohibit subsidies on high-speed services, including those under universal service sections of Telecom Act, that weren’t available to all providers of high-speed service. Amendment “raises some questions” regarding its effects on e-rate, Markey aide said. Meanwhile, Markey managed to incorporate amendment that would prevent Bell companies from offering long distance voice service without getting Sec. 271 clearance, even if they wanted to do so free.

It still wasn’t entirely clear what markup’s upshot would be, since staff now will have to draft language satisfying several other compromises. “This bill needs a lot more work if it ever is to be useful,” Rep. Harman (D-Cal.) said, echoing sentiments heard from many members. “Next week we'll make major changes if we are to adopt it.” Tauzin had hoped to have full Commerce Committee markup next week, but Johnson acknowledged that’s now “unlikely.” Among amendments Tauzin promised to help through Commerce markup was one to restore line-sharing requirements, as expected (CD April 26 p1). Sec. 4 of Tauzin-Dingell bill currently would remove FCC rules requiring incumbent LECs to make partial lines available to data LECs that seek to provide only DSL service and not voice. Without those rules, data LECs would have to purchase entire line, including voice component that they're not using, increasing their costs. Rep. Largent (R-Okla.) introduced amendment that would have eliminated all of Sec. 4, and Tauzin persuaded other panel members, many of whom said they needed to see line-sharing back in measure, not to vote for cut that drastic, saying it would kill entire bill. Largent amendment failed 19-14 thanks to members such as Rep. Cox (R-Cal.) and Wilson (R-N.M.) who voted against it despite saying they supported Largent’s efforts. Wilson and Rep. Luther (D-Minn.) withdrew somewhat narrower amendment that would have eliminated only part of Sec. 4. “There’s a consensus on the Committee that we want to keep line-sharing,” Wilson said. Frisby said he was glad to hear that, but amendment “hasn’t happened yet.”

Another amendment still to be finalized was by Telecom Subcommittee Chmn. Upton (R-Mich) that would increase FCC’s fining authority tenfold to $1 million per violation, with $10 million cap. Panel did approve narrower amendment to increase fines by Rep. Stearns (R-Fla.) that applied only to situations in which Bells violated requirements to offer access to ISPs. Upton’s amendment, which also would offer FCC doubled fining authority for repeat offenders and give Commission expanded cease-and-desist authority, drew widespread support. Rep. Harman (D-Cal.) said she would like to see Upton introduce it as separate bill. Upton said his amendment still was “work in progress” and he was refining it to, among other things, make sure stiffest penalties applied to “willful” violations and not clerical errors. It’s expected to broaden bill’s appeal beyond Bell companies and their supporters. For example, Rep. Stearns (R-Fla.) said AARP supported Tauzin- Dingell bill with Upton amendment. However, Markey said it was important that fines go to companies victimized by Bells’ anticompetitive behavior, or they would be only “posthumously vindicated.” Rep. Wilson (R-N.M.) offered alternative idea to use fines for program to encourage broadband service in rural areas, rather than “swelling government coffers.” Dingell said penalties should be “increased across the board” for violations of FCC rules. Repeating his mantra of previous day, Rep. Pickering (R- Miss.) said Upton amendment was “meaningless” since underlying bill would remove many of rules for FCC to enforce.

Among other amendments still to be reconsidered: (1) By Rep. Davis (R-Va.) to set “bright-line” performance standards for incumbent LECs. “This is exactly what we need,” Tauzin said. (2) Another by Davis to increase minimum data speed of services exempted from regulation by bill to 1.5 Mbps from current 384 kbps. Tauzin said he would be willing to examine increase, but said 1.5 Mbps clearly was too high. Davis said 384 kbps “doesn’t even support good streaming video… For these waivers [of regulation], we ought to get more.” Markey said it was good public policy to give Bells incentive to raise transmission speeds to qualify. (3) By Rep. Rush (D-Ill.) to require Bells to build out data networks to poor urban and rural areas. Bells have said bill is necessary to give them incentive to do so, and Rush said “this would hold them true to their word.” His amendment would require Bells to submit build-out plans to state PUCs, including expected price of service. “An amendment of this kind is needed,” Dingell said, and Tauzin agreed that it was important for bill to include “some accountability.” “I'm not sure we shouldn’t make commitments,” Lytle told us, “but I want to see them.” He said there also was problem that cable, satellite and other broadband providers didn’t face such requirements, but “we feel [Rush’s] concern.” (4) By Rep. Eshoo (D-Cal.) to require FCC to keep service reporting requirements for LECs. (5) By Rep. Terry (R- Neb.) to set 60-day timeline for state PUCs to consider interconnection disputes.

Tauzin aggressively used germaneness point-of-order motions to exclude amendments’ consideration where possible, including on Upton’s. Johnson told us biggest issue was avoiding having bill referred to another committee -- specifically Judiciary Committee. On other side, opponents introduced series of amendments on variety of subjects that they eventually withdrew without votes, including one by Wilson that would require structural separation of Bell companies’ wholesale and retail units. It wasn’t clear how many of those anti-Bell amendments would return in full Committee.