‘MILD’ DASCHLE LETTER CHARACTERIZED BY CLECs AS BELL LOSS
Letter from Senate Majority Leader Daschle (D-S.D.) was praised by all sectors of telecom industry, but many said noncommittal letter from powerful senator represented loss for Bells’ lobbying effort. In letter sent Wed. to FCC Chmn. Powell, Daschle urged quick completion of triennial review of unbundled network elements (UNEs). He didn’t recommend action, and said clearly that letter wasn’t not intended to do so. Consumer advocates and CLEC representatives said Bells had mounted intense lobbying campaign in recent weeks to win support for changes in UNE regulations. Although SBC and USTA said they were pleased with letter, many suggested it fell far short of what Bells wanted. Some said it essentially signified that Senate had finished work on telecom issues in 107th Congress.
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CLECs said they had been worrying for weeks about Bells’ lobbying efforts with Daschle. CompTel Pres. Russell Frisby said CLECs were concerned that Daschle could introduce “pro- Bell” resolution that would have urged quicker resolution of triennial review and made specific requests on UNE or TELRIC pricing structures. “Instead, they got a mild letter that everyone could agree with,” Frisby said. “The Bells are claiming a victory, but I don’t see it. After putting in hundreds of man-hours trying to get some bill or resolution from Congress, the Bell side should be embarrassed with the results.” Gene Kimmelman of Consumers Union said Bell lobbyists “didn’t deliver” Tauzin-Dingell bill for bosses and were getting letters “just to show they've delivered something.” ALTS Pres. John Windhausen said letter represented “high0water mark” for Bell lobbying of Senate in current Congress.
Daschle letter urged FCC to finish triennial review, which is examining UNEs. “Concerns that the FCC has failed to demonstrate leadership are understandable,” he wrote: “A number of important policy matters await resolution.” Letter mentioned Jan. 2, 2003, deadline ordered by U.S. Appeals Court, D.C., for portion of triennial review. Action on that and other policy questions “could bring some essential clarity to market conditions in the telecommunications industry,” Daschle wrote. Those issues are important to both incumbent and competing telephone services, he said.
Daschle urged FCC to act in accordance with aims of Telecom Act to promote “economic growth, job creation, capital investment, competition and reasonable prices.” But he also said Commission should “keep in mind” needs of rural and underserved areas and “do everything necessary” to ensure that phone rates don’t rise and that universal service remains intact. He highlighted general state of telecom industry, mentioning jobs lost and lack of investment in sector that represents about 1/6 of total U.S. economy. “A shortage of capital could make it difficult to maintain the existing network, let alone make the investments necessary to expand access to affordable broadband services,” letter said.
RBOCs praised Daschle for urging Commission to act on triennial review. SBC Communications Vp-Federal Relations Timothy McKone, said letter showed “clear initiative” by Daschle. McKone cited recent concerns of some members of Congress that UNE-P pricing was “draining revenues from the telecommunications industry.” On Sept. 16, 104 members of House signed letter to Powell urging changes in TELRIC and UNE-P pricing that incumbents said were below their costs to maintain lines. He said recent activity on Capitol Hill showed “Commission has clear bipartisan support from Congress to make needed regulatory changes.” USTA Pres. Walter McCormick said he was pleased that Daschle “added his powerful voice to the crescendo calling on the FCC to act quickly to stem the job loss and economic paralysis by acting quickly” to complete review of UNE regulatory regime.
SBC spokesman disagreed with notion that letter was loss for Bells. He said Windhausen letter to Powell said “even setting a deadline on these FCC proceedings has the effect of weighing in on the merits.” Spokesman said: “When you have a strong voice from the Senate calling for action, that’s a good thing.” Windhausen admitted he would have preferred no letter from Daschle and no triennial review, but letter’s strong support for low prices and competition was encouraging. “Since CLECs generally offer prices that are 10% to 30% cheaper than the Bell companies, this letter clearly advises the FCC not to reduce the ability of CLECs to offer these services,” he said. Windhausen said letter helped Bells on timing, since they had been lobbying for quick action on triennial review, but hurt them on substance, since it didn’t specifically address issues in review.
Letter shows Powell will have very little political cover in Senate should he try to change UNE regulations significantly, CLECs and consumer advocates said. NASUCA Exec. Dir. Charles Acquard described letter as “yellow light to Powell with a red-light camera behind him.” Clear statements against raising prices will make Powell second- guess drastic UNE changes since they probably would lead to price increases, Frisby said. Letter also could affect other proceedings, he said. Current broadband proceeding at FCC probably would hurt universal service, he said, which could cause Powell to reflect again on that issue. Kimmelman also said letter didn’t give Powell cover. He said FCC rejection of UNEs would be “leading us back to a monopoly” and if agency wasn’t going to regulate wholesale pricing, then it must regulate retail pricing.