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Tauzin-Dingell Easily Passes House

The House of Representatives passed legislation today that would allow regional Bell companies to enter the broadband market, limit access of their DSL circuits to competitors and impose a ban on Federal Communications Commission (FCC) or state regulation of the rates, conditions for, or entry into high-speed Internet service.

The Internet Freedom and Broadband Deployment Act (H.R. 1542), also widely called Tauzin-Dingell after its authors, Billy Tauzin (R.-La.) and John Dingell (D.-Mich.), passed on a 271-158 vote after a long afternoon of often rancorous debate and arcane parliamentary maneuvering. Despite the support in the House, the chances of passage in the Senate appear remote.

Senate Commerce Committee Chairman Ernest "Fritz" Hollings (D.-S.C.), whose committee would control the legislation, vowed to block the bill after a press conference in which he called Tauzin-Dingell "blasphemy." A number of other senators have indicated the bill has little chance of success.

The House vote came after an almost two-year, multi-million dollar lobbying and advertising campaign that pitted the four regional Bell operating companies against cable and long distance companies, competitive local exchange carriers (CLECs) and consumer groups.

The Bells contend they need legislative relief from certain provisions of the 1996 Telecommunications Act that prohibit them from providing a competitive broadband product, i.e., DSL, to cable modems. Under current law, the Bells can not move into the lucrative high-speed market until first proving they have opened their local voice markets to competition.

The regional Bells also complain that CLECs, which Dingell called "non-investing parasites," are a drain on their profits since the 1996 Telecommunications Act requires the Bells to make their lines available to CLECs at below market costs.

Opponents counter that Tauzin-Dingell is tantamount to creating new Bell monopolies.

Tauzin, the primary author of the legislation and the chief architect of the political maneuvering for the bill, said H.R. 1542 would free broadband deployment from the "grip of bureaucratic regulation" and a "fight for consumers."

"This bill unleashes the creativity of these companies (the Bells) to unleash the power broadband throughout this country," said Tauzin in a podium-pounding opening statement. "It's about the Internet, not the old telephone companies. Broadband is the engine that will drive the Internet into the future."

Rep. Anna Eshoo (D.-Calif.) argued that the "Bells don't need any legislation to offer broadband services. It stifles innovation because the Bells have never been known for innovation."

Also raising objections in the first hour of debate was Rep. Louis Slaughter (D.-Ny.Y.), who said, "This bill says monopolies, not ratepayers know what it is best. This is an extraordinary handoff of power."

One amendment added to the bill would increase penalties to $1 million a day from the current $120,000 a day the FCC can impose on telecoms not complying with the provisions of the 1996 Telecommunications Act. The amendment also increases the ceiling on the penalties to $10 million from the current $120,000 and gives the FCC the ability to issue cease and desist orders.