Congressional aides predict telecom reform soon

Late-2006 target date is eyed

WASHINGTON - The U.S. Congress should pass some kind of telecommunications reform by late 2006, four congressional staffers focused on telecom issues predicted Wednesday, but the group couldn't agree on what kind of reform is needed.

The four, part of a panel discussion on telecom reform at a Broadband Policy Summit in Washington, D.C., discussed a range of options for telecom reform, including exempting VOIP (voice over Internet Protocol) from most traditional telecom regulations, creating a new regulatory category for advanced Internet communications and reforming how telecom carriers pay each other for network interconnection.

In an industry where video, voice and data are increasingly sent over the same network, Congress needs to focus on whether these "silos" of regulation are needed, said Mike O'Rielly, senior legislative assistant to Senator John Sununu, a New Hampshire Republican. Sununu in 2004 pushed a bill that would exempt VOIP from most state and national telecom regulations, but the bill did not pass through Congress.

"I'm an eternal optimist," O'Rielly said of the possibility of telecom reform happening soon. "I think this can be done, if not this year, early next year."

Earl Comstock, president and chief executive officer of competitive telecom carrier trade group CompTel/ALTS, said policy makers had good reasons to regulate some telecom providers differently from others, based partly on which providers enjoyed near monopolies. "The silos are a convenient creation for some people who want to change the [telecom] statute," Comstock said.

Others on the panel predicted meaningful telecom reform could take much longer than O'Rielly's goal. Howard Symons, a telecom lawyer with Mintz, Levin, Cohn, Ferris, Glovsky & Popeo PC, said initial discussions that led to the 1996 Telecommunications Act started about 20 years earlier.

Speakers on the telecom reform panel disagreed with each other on what needs to be done, with O'Rielly pushing for limiting regulation for VOIP and a Democratic aide suggesting VOIP should face some minimal regulations. VOIP should be required to provide enhanced 911 emergency dialing service, as well as to comply with law enforcement wiretapping requests, said Amy Levine, a legislative aide to Representative Rick Boucher, a Virginia Democrat. Telephone customers, whether they use traditional wireline service or VOIP, expect services such as 911, she said.

O'Rielly questioned how Congress or the U.S. Federal Communications (FCC) could require VOIP services to comply with wiretapping laws, when Internet data service has not faced those regulations. "How do you reconcile that?" he said.

One of the big issues facing Congress and the FCC is regulatory parity between cable-modem broadband service and DSL (Digital Subscriber Line) offered by incumbent telecom carriers, panelists agreed. Through the '96 Telecom Act and later FCC rulings, large incumbent telecom carriers have been required to share their networks with competing ISPs (Internet service providers), while cable providers have been free from those regulations.

Incumbent carriers, including Verizon Communications, have pushed for Congress to eliminate these network-sharing rules, saying they give telephone carriers little incentive to improve their networks and offer customers faster broadband. During the summit, Verizon Senior Vice President Kathryn Brown called for an end to network-sharing rules and to local cable franchising restrictions that complicate her company's efforts to provide video services in multiple cities.

“We should not lock the future of broadband in the regulatory shackles of the past,” Brown said.

Beyond anything Congress can do, a group of ISPs has sued for access to cable networks, asking courts to overturn the FCC's March 2002 ruling allowing cable providers to close off their networks to competitors. That case -- Brand X vs. FCC -- was argued before the U.S. Supreme Court in March, and a ruling is expected shortly.

"Regardless of what happens in the Brand X case, someone will come to Congress asking for a fix," Levine said.

Competitors of the large telecom incumbents fear that moves toward regulatory parity between cable and DSL could mean fewer options for customers, said Comstock of CompTel/ALTS. "The reality is there will always be fewer networks than people seeking to provide services over those networks," he said.

When asked what kind of telecom reform was coming, the legislative aides tended to avoid concrete answers. Most agreed that reform of intercarrier compensation and the Universal Service Fund are needed. The fund is a federal program that provides money for telecom services in rural and poor areas. Levine suggested that the Universal Service Fund could be expanded to include funding for broadband if VOIP providers are required to pay in.

Most also agreed that a bill encouraging broadcasters to move from using analog spectrum to DTV (digital television) broadcasts would be among the telecom-related bills that moves through Congress quickly, maybe as soon as this year. In May, Representative Joe Barton, a Texas Republican and chairman of the House Energy and Commerce Committee, floated draft legislation that would force a transition to DTV by the end of 2008. A transition to DTV would free up wireless spectrum for advanced services such as wireless broadband.

Currently, broadcasters are required to make that move by the end of 2006 or when 85 percent of homes in their market have DTV-ready television sets. With millions of TV sets that don't support DTV still in use in the U.S., a full transition could take several years under current law.

Some congressional Democrats have called for subsidies for U.S. residents who can't afford new DTV equipment, but Barton's draft bill does not include a subsidy. "What happens to those gazillion television sets out there that aren't capable of receiving digital signals?" said Symons, the telecom lawyer. "In a world where we're paying $2.75 for a gallon of gas, can senators justify subsidizing TV sets?"

Symons questioned if Democrats want a guarantee that every TV set will work before a DTV transition happens.

"I think 'every TV' is a probably a little of bit of an exaggeration," said Rachel Welch, Democratic counsel for the Senate Commerce Committee. "But they certainly like a guarantee that TVs will work right."


Copyright © 2005 IDG Communications, Inc.