SENATE HEARING DRAWS NEW, UNFAMILIAR FACES TO DISCUSS TELECOM ISSUES

At least 18 of 23 senators on Commerce Committee made appearance at hearing although, depending on timing of arrival, not all spoke. Some waited through hours of testimony and questions to have their turn to query commissioners, as hearing stretched on for slightly more than 3 hours.

Hearing provided first glimpse of Sununu and Lautenberg as new members of committee, and each raised concerns about telephone service. Sununu was particularly skeptical of potential changes in FCC regulation that could hurt competition and voiced support for state regulators. saying: “When you change the rules, you change the nature of competition. And when you change the nature of the competition, you change the nature of services available to consumers.” Sununu said FCC should choose best course for competition while reviewing current proceedings. He was representative for 3 terms before being elected to Senate in Nov., voting against Tauzin-Dingell bill. Sununu wasn’t present by time question period came to him. Also, Sununu, like Lautenberg, wasn’t technically member of committee at hearing since Senate hadn’t yet passed resolution to organize structure. Resolution was passed Wed. evening.

Lautenberg waited nearly 3 hours for chance to question Powell about telephone rates. In opening statement, Lautenberg said rates for telephone service still were high nearly 6 years after passage of Telecom Act and his constituents complained to him about high rates. Lautenberg, former senator who last was in 106th Congress, voted for Telecom Act. When he asked Powell why rates still were high, Powell said that unlike cable and wireless, state PUCs had great role in setting service rates.

Sen. Lott (R-Miss.) waited for more than one hour to ask commissioners whether they believed that Telecom Act actually was working. Powell said it was, but “not in an optimal way.” “If reduction of regulations was the goal of the Act, we're still in midstream,” Powell said. Lott also asked general question about new technologies, to which Comr. Martin highlighted spectrum policy. Lott also said he had concerns about media ownership issues, particularly reductions in local news coverage.

Sen. Fitzgerald (R-O.) expressed concerns about making changes in competitive structure of telecom, saying it would be akin to “changing the goal posts in the middle of the year,” and said Powell should consider extending time of FCC review. Fitzgerald said such change in competitive rules also could affect capital funding of telecom markets for “eons” since investors would be nervous about funding ventures that could be subject to regulatory changes. Fitzgerald asked how changing classification of DSL from telecom to information service could affect competition. Powell said changing classification wouldn’t prevent ILECs from providing required access to their infrastructure. Fitzgerald also suggested stripping licenses from broadcasters (particularly radio) that continually broadcast indecent content, despite FCC fines.

Other senators not often associated with telecom issues made appearances. Sen. Smith (R-Ore.) cited letter sent to Senate Commerce Committee members by High-Tech Broadband Coalition (HTBC) encouraging FCC relaxation of UNE regulations. He said FCC regulations should continue to promote facilities-based competition. Smith also highlighted need to remain focused on broadband flag issue if DTV transition was to occur soon. Sen. Hutchinson (R-Tex.) said she supported parity for broadband deployment but “worried” about removing media ownership caps and said there should be thorough evaluation of consequences of any regulatory changes in ownership.

Presence of new senators doesn’t necessarily mean strong new interest in telecom interests on Capitol Hill, industry sources said. While several lobbyists said they were very pleased with turnout, they also acknowledged other factors might have contributed. Since Senate hadn’t passed organizing resolution, few other hearings were scheduled. Tom Wacker, NTCA dir.-govt. affairs, said many senators also liked to attend first telecom hearing of session. Fact that all 5 commissioners were present was another draw for senators, he said.

After hearing, both ILECs and CLECs said they were encouraged by hearing. John Windhausen, ALTS pres., said focus on consumers and competition by many senators was encouraging. “We were encouraged so many senators were skeptical of the direction the FCC is heading,” he said. ALTS pushed consumer issues when talking with members before hearing, he said. USTA Pres. Walter McCormick also said hearing was positive. He said senators displayed consensus that economy was biggest issue in telecom industry and that regulations were at heart of problem. “There’s broad consensus that FCC policy has to be changed,” said McCormick, who also acknowledged that there wasn’t consensus on how policies should be changed. Wacker said NTCA was concerned about how much emphasis was placed on competition at hearing, saying other solutions to telecom problems weren’t even discussed.