Telcos Criticize Barton Bill’s Franchising Provisions
Telcos and ISPs dislike elements in House Commerce Committee Chmn. Barton’s (R-Tex.) telecom bill released last week, according to House sources who've met with industry representatives. But staffers said the draft was intended to elicit comment, with changes made if need be. Final comments are due Sept. 28, after which the bill will be set for markup, predicted in mid-Oct.
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Parts of the draft threaten to “deny consumers of many of the benefits that today’s technology and marketplace can deliver,” Verizon Exec. Vp Tom Tauke said Wed. at a Progress & Freedom Foundation conference. One passage essentially would mandate a redesign of the set- top box for Verizon’s FiOS video service that launches today (Thurs.), he said.
The draft raises red flags because customers’ gear costs could climb, the box could fall prey to viruses and it could complicate copyright protection of content, Tauke said. He also questioned a placeholder in the draft for build-out requirements. “The good news is that nothing is there -- the bad news is that somebody apparently believes there should be something there,” he said: “Before we've entered the horse race, some on Capitol Hill are adding weight to the horse and adding length the track.” Most on Capitol Hill don’t agree with that mentality but “it never hurts to ground key players in the realities of the market,” he said.
The 77-page draft contains “dreadful, dreadful ideas” ranging from a new wholesale ISP licensing requirement to new requirements for disabled access to the Internet, said U.S. Internet Industry Assn. Pres. David McClure. He said he takes comfort from the knowledge that this is only a staff draft and “the reality is that what’s going to emerge for consideration is going to look nothing like the draft.” “There are too many problems… It’s just unworkable,” McClure said. The main task is diagnosing why there’s “so much distrust of our ability to handle a marketplace driven by consumers,” he said: “It’s not like we're stumbling blind here.”
Tauke’s vision of telecom reform reflects an understanding that “this wired and wireless broadband space is an interstate market, a national market, subject to jurisdiction of the FCC,” he said. The FCC role in broadband would be to address market failures, and its guide for action on complaints would be the High Tech Broadband Coalition’s connectivity principles. An FTC model might work because FTC doesn’t try to set rules shaping a market’s development, Tauke said. “Just as big change is usually hard for us as individuals, it’s also difficult for the body politic,” Tauke said: “We know that the game where ‘government rules’ and consumers are passive beneficiaries won’t work in the real world.”
Others had a different take on telecom reform. Today’s franchising method is far from perfect but isn’t the barrier to entry some allege, said NCTA Senior Vp-Law & Regulatory Policy Dan Brenner. He accused Verizon of advocating a “no rules” environment with ad hoc jurisprudence where “everything is subject to complaint.” Brenner said this model for reform would eliminate program access and eliminate the 5% franchise fee compromise. The system Tauke and allies urge would mean “every single kind of commercial dispute” would have to come before the FCC, he argued. Chmn. Martin has made clear he won’t open the window for a dispute resolution free-for-all, Brenner said, endorsing “generalized principles” rather than “enforceable doctrine.” There’s plenty of work to do on other reforms to Title 6, he said.
Any net neutrality requirements would entail “massive regulation” and mounds of paperwork, Public Knowledge Pres. Gigi Sohn said, adding that it’s not enough for the Commission to enforce and referee in an already cloudy environment. Now that the FCC has deregulated DSL, its jurisdiction is even less certain, she said. Sohn said she hasn’t heard anyone champion sweeping rewrite like 1996’s Telecom Act, but “the notion that consumers should be able to go where they want to go on the Internet, attach the equipment they want to attach without restriction or degradation” should be paramount. As evidence she cited the now infamous Madison River-Vonage port-blocking controversy. But PFF Senior Fellow Adam Thierer said he is weary of pundits extracting lessons from Madison River. That case involved a very small telecom provider and a “stupid decision,” he said, calling the ruling not indicative of what’s going on in the industry: “Let them meddle, let them make stupid decisions.”