Broadband Bills Movin' On Up
By Stephen Barlas
from the March 19, 2001 issue of Broadband Week
WASHINGTON -- Congress may soon be acting to boost smaller broadband network providers by cutting their regulatory burdens.
One of the first significant pieces of telecommunications legislation to move through the current Congress is a bill to reduce FCC regulation for all but the five biggest incumbent LECs, to help small and mid-sized operators redeploy capital from regulatory matters to network expansion.
The full House is to vote on H.R. 496, sponsored by Rep. Barbara Cubin, R-Wyo., by the end of this month. Cubin's bill cleared the House Energy and Commerce Committee by a unanimous voice vote on Feb. 28.
Sen. Conrad Burns, R-Montana, chairman of the Senate Commerce communications subcommittee, which is the bill's next stop, plans a companion Senate measure dubbed FASTNET. "This will free up capital for high-speed Internet service buildout," Burns told the U.S. Telecommunications Association on March 8. "That is very important to small business in Montana."
Burns declined to predict when the bill would get voted on in his subcommittee. "I am not going to get into timelines," he stated.
The Cubin bill makes life easier at the FCC for what are referred to as "2 percent companies," that is, ILECs serving fewer than 2 percent of the nation's 135 million access lines. That includes everyone except Verizon, SBC, BellSouth, Qwest and Sprint.
The Cubin bill significantly would deregulate the 2 percenters, partially by eliminating some specific reporting requirements. For example, to make it easier to provide broadband services the bill enables smaller companies to introduce "new" services by filing a tariff on one day's notice. "The FCC will not have the authority to approve or disapprove the rate structure for such services shown in such tariff," the bill states.
David Zesiger, executive director of the Independent Telephone and Telecommunications Alliance, which represents non-Bell ILECs, contends the FCC will retain oversight over the rates for those "new" services. As to what services qualify as "new," the bill is a little foggy. Zesiger says an ILEC could add higher-speed broadband access to its current service lineup and call that "new." Or the ILEC could change the pricing structure of a service, or bundle DSL with other services, and call the entire offering "new."
James Ogg, chairman and CEO of the Local Telecommunications Division of Madison River Communications, says the Cubin bill will help his company reallocate capital from regulatory projects and put it toward expanding its broadband network. The company has about 200,000 access lines, making it about number 15 out of the nation's 100 ILECs. Madison River, which provides services in Illinois, North Carolina and various markets of the southeastern United States, offers DSL to about 80 percent of its access lines and has about 6,000 DSL customers. "That number is growing very, very fast," he says.
But Ogg emphasizes that it will be very costly to expand DSL availability to the remaining 20 percent of the access lines. "The money we save on reports we don't have to file is money we can put into capital projects," he says.
So far, no real opposition to the Cubin bill has arisen. The USTA, which represents midsize ILECs and the Bells, supports the bill. "Any deregulation for any telephone company is better than no deregulation," USTA spokesman David Bolger says.
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