HOLLINGS OFFERING OWN BROADBAND BILL TO COUNTER BREAUX

Breaux told reporters Tues. it was his understanding that his bill would get hearing in Hollings’ committee. Aide to Hollings confirmed Thurs. that committee would hold broadband hearing May 22, but Breaux probably wouldn’t get warm reception from his chmn., as Hollings called bill “nothing more than a Trojan Horse to deregulate the Bells and extend their monopoly.” Breaux and Sen. Nickles (R-Okla.) introduced their bill, Breaux said, after it was clear that one by Sen. Brownback (R-Kan.) modeled after HR-1542 by House Commerce Committee Chmn. Tauzin (R-La.) and ranking Democrat Dingell (Mich.) couldn’t pass Senate, or even clear Hollings’ committee. Committee’s ranking Republican, McCain (R-Ariz.), also is drafting broadband legislation to counter Breaux. McCain’s bill would deregulate incumbent LECs in residential areas where they were outgunned by cable but not in business markets.

Proposed Broadband Telecom Act of 2002 by Hollings would “foster the deployment and adoption of broadband services, particularly in rural and underserved areas,” statement issued by committee said. Among other things, it would: (1) Use telephone excise tax funds, currently assigned for general use to U.S. Treasury, to fund low-interest loans and grants for rural broadband. (2) Authorize National Institute of Science & Technology (NIST) to conduct best-practices study for rural broadband deployment. (3) Create pilot projects for wireless and other alternate broadband technologies in rural and underserved areas to promote competition. (4) Fund grants to NIST labs, National Science Board, NTIA and universities to develop broadband at speeds of 50-100 Mbps. (5) Fund grants to digitize library and museum collections. (6) Fund university research on useful consumer Internet applications. (7) Fund e-govt. grants. (8) Fund grants to connect under-represented colleges and communities to Internet.

Hollings said rural and underserved areas actually would be harmed by Breaux’s bill because regulatory parity called for in bill “could have a devastating impact on universal service and a disproportionate impact on rural America, because broadband services will never be eligible for universal service support as contemplated by the 1996 Act.” Breaux has called his bill alternative to Tauzin-Dingell more acceptable to Senate because it’s technology-neutral and calls on FCC to decide on how parity should be structured (although by forbidding the FCC from adding any new restrictions it would de facto force the agency to remove most ILEC obligations). Hollings in his “Dear Colleague” letter seemed to see no difference between Breaux-Nickles and Tauzin-Dingell: “Pass ‘parity’ and you create at best a duopoly between cable and the Bells in residential America and an uncontrolled monopoly in the money-rich business market. The result -- higher prices, shoddy service and less innovation -- is the exact opposite of what the Bells claim and what Congress should be promoting.”

“Senator Hollings gets it,” American ISP Assn. Pres. Sue Ashdown said Thurs. “The Hollings bill addresses the issue of demand,” she said, while “stimulating competition in an industry that the Bells would like to claim solely as their own.” She called House passage of Tauzin-Dingell “regrettable” and said “Breaux-Nickles legislation in the Senate is another giant leap in the wrong direction.”