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McCAIN SAID TO BE CONSIDERING DSL DEREGULATION BILL

Senate Commerce Committee ranking Republican McCain (Ariz.) is about to draft broadband bill that would deregulate incumbent local exchange carriers (ILECs) on DSL regulations, but only where it involved residential service, we're told. Hill source familiar with situation told us senator and his staff were “working very diligently” on possible legislation, motivated in part by fact that Sen. Breaux (D-La.) may be introducing broadband legislation as soon as this week.

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Breaux’s bill, much like HR-1542 by House Commerce Committee Chmn. Tauzin (R-La.) and ranking Democrat Dingell (Mich.) and similar legislation introduced by Sen. Brownback (R-Kan.), probably would free ILECs from burden of interconnecting competing DSL carriers to their newly installed broadband equipment. Specifically, Breaux’s bill would instruct FCC to develop regulatory parity for all broadband services within 90 days. McCain expressed concerns at recent Senate Commerce Committee hearing that Tauzin- Dingell placed too much focus on only one sector of broadband. McCain’s bill, when drafted, would look at “all platforms,” Hill source said.

Bill would attempt to introduce regulatory parity between DSL and cable modem services but limit deregulation to residential market. That approach recognizes fact that cable, for most part, has near-universal penetration in residential markets but has much less penetration to businesses. By deregulating ILEC DSL service only in residential markets, Hill source said, Bells could provide stronger competition to cable, which dominates residential broadband market, but those same ILECs would not be given additional advantage in business market, where Bells have more infrastructure.

Other broadband platforms are likely to be addressed in bill, we're told, including wireless, although other than spectrum issues it isn’t as clear that there are regulatory hurdles to deployment. Source said regulatory parity would be goal for all platforms, including wireless and satellite. McCain also intends to examine impact on voice services if ILECs shift to packet-switched voice services, with intent of ensuring that consumers receive the same assurances for voice service they do now.