HOUSE PASSES TAUZIN-DINGELL WITH ANTITRUST AND ENFORCEMENT ITEMS

Cannon-Conyers was withdrawn by its sponsors in procedural attempt to force up-or-down vote on amendment. Goal was to later recommit Cannon-Conyers which, if motion to recommit had passed, would have disconnected it from Towns- Buyer. However, House rejected that move, paving way for Towns-Buyer to be attached to HR-1542 while killing Cannon- Conyers.

Bill approved by House was manager’s amendment by Tauzin and House Judiciary Committee Chmn. Sensenbrenner (R-Wis.). That amendment, as modified by Towns-Buyer line-sharing measure, would ensure that antitrust laws weren’t given back seat to Telecom Act in resolution of telecom disputes.

USTA Pres. Walter McCormick praised House passage of Tauzin-Dingell, expressing eagerness to work with Senate and Bush Administration for its enactment: “With the vote today, House members took a giant step toward economic recovery, increased innovation and expanded consumer choice.” AT&T spokesman said rule leading to death of Cannon-Conyers was rigged to favor Bells. He said Tauzin was afraid Cannon- Conyers would interfere with his plans to move bill through House with minimal difficulty, since it was referred out of committee by such narrow margin: “He came so close to disaster in his committee last spring that he was determined not to give his opponents another opportunity on the floor. It’s a travesty.”

Rep. Dingell (D-Mich.), co-author of bill, rejected that notion on House floor, asserting that Cannon and Conyers weren’t deprived of their ability to offer the measure: “This is the normal process” that had been part of parliamentary procedures throughout the history of Congress.

House 421-7 also passed FCC enforcement amendment by House Telecom Subcommittee Chmn. Upton (R-Mich.) and Rep. Green (D-Tex.). Upton-Green amended HR-1542 by bolstering FCC’s fining authority and by doubling financial penalties that agency could levy on violators of Telecom Act. Group of 7 Republicans voted against Upton-Green: Reps. Baker (La.), Jones (N.C.), Hefley (Colo.), Otter (Idaho), Paul (Tex.), Skeen (N.M.), Simpson (Idaho).

Tauzin said amendment “completes the package in a big way… It doesn’t just give the FCC the ability to punish the Bells… it enables to FCC to order the violator to cease and desist… It’s a reminder that [the Bells] cannot ignore obligations to open up their markets.”

Upton-Green also would: (1) Raise cap on fines for violations to $10 million from $1.2 million. (2) Raise cap on daily fines for continuing violations to $1 million from $120,000. (3) Double daily forfeiture penalties imposed on repeat violators to $2 million, capped at $20 million. (4) Require report to Congress on impact of increased penalties within year of enactment.

Bill’s passage provoked dismay among CLECs and immediate plaudits from Bell companies, with both sides having statements lined up for release as soon as final vote was taken. While legislation faces uphill battle in Senate, BellSouth Vp-Govt. Affairs Herschel Abbott said it would give his company “the ability to expand and upgrade a high-speed data network that already is available to 70% of our customers, to homes and businesses that are further from our central offices.” He was optimistic that bill could pass Senate. Qwest Vp-Federal Policy & Law Lauren (Pete) Belvin said House passage of Tauzin-Dingell bill “could place our DSL service on an equal regulatory footing with cable modem services which today dominate the high-speed Internet access market.”

Covad decried action on floor that it said denied straight up-or-down vote on Cannon-Conyers amendment that would have preserved regulatory protections for CLECs. Covad said that maneuvering around Cannon-Conyers amendment was “a dark-of-night procedural gambit that demonstrates the Bells can only win the day by brute force, not substance.” It said that besides opposition to bill by Senate Commerce Committee Chmn. Hollings (D-S.C.), Sens. McCain (R-Ariz.) and Burns (R- Mont.) also had voiced concerns about legislation. ASCENT Pres. Ernest Kelly said House-passed bill “marks a sad day in the short history of competition in telecommunications service.” He called it “harsh blow to an industry that is already under terrific duress.” ALTS Pres. John Windhausen said “controversial vote” on HR-1542 should put measure to rest: “The bill passed the House with far fewer than the 300 votes that its authors predicted a few months ago, and is dead on arrival in the Senate.” He also said bill’s backers “were forced to accept several amendments as a condition of acquiring those votes,” showing there was concern about impact on competitors. “By pushing the Tauzin-Dingell bill through the U.S. House of Representatives, the Bell companies are attempting to drive a stake through the heart of the Internet economy,” said WorldCom CEO Bernard Ebbers.

Verizon Senior Vp-Public Policy & External Affairs Thomas Tauke said final vote “sends a strong message to the U.S. Senate and the Federal Communications Commission that the status quo is not good enough for the American consumer or the American economy.” Consumer Federation of America chastised House for what it described as giving in to special interests. CFA Research Dir. Mark Cooper said: “Instead of standing up for ordinary consumers and rejecting Tauzin- Dingell, the House caved under intense lobbying by allowing the Bell monopolies to construct this roadblock to the high- speed lanes of the information superhighway. For the sake of consumers and the future of competition, the Senate needs to show more backbone. NCTA noted it never had opposed Tauzin- Dingell or sought regulation of broadband competitors: “Broadband competition between cable modem service and DSL is already fierce, and we expect such competition to continue. NCTA strongly believes that marketplace competition is the best way to foster the availability of broadband services to all Americans.”