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Wow. Is this Senator Hollings a secret FOIB member?

Or maybe the split that I was advocating is just plain common sense.

Being a socialist, I took it further by nationalizing the local loop / wholesale side of the business. But within reasonable confines this guy has the right frickin’ idea.



Legislative Update: A new bill aims to split the Bells

Industry nosedive aside, telecom is–and has long been–a house divided. To foil a fall, most now agree, the Telecom Act of 1996 must be amended. But how? Therein lies the discord. It’s the scrappy CLECs vs. the mighty RBOCS vs. anti-Bell AT&T–to simplify the schism(s). But on Capitol Hill, where (officially) the battle is being waged, the matter has become increasingly complex. We’ve seen aisle-crossing-with co-sponsored bills-and now, House-hopping as focus shifts to the Senate. 

Earlier this month, the new chairman of the Senate Commerce Committee, Sen. Fritz Hollings (D-SC) entered the fray armed with S-1364, a bill that would split the Bells into separate wholesale and retail companies. They call it structural separation. Its aim? To prevent the Bells from hindering competition through control of the local loop. That control would instead be given to independent spin-off companies that would lease lines not only to the Bell retail units but also to competitive carriers. 

As the local dominant carriers, the Bells would have to put their wholesale and retail operations in separate divisions within a year of S-1364’s enactment. If, within another year, they violate competitive provisions of the ’96 Act, the FCC could force them to fully separate the operations into separate subsidiaries.

CompTel, the Competitive Telecommunications Association, is supporting the measure. 

“CompTel has long maintained that separating the Bells into wholesale and retail units is the only way to ensure that Bells give up their local phone monopolies,” said CompTel president H. Russell Frisby, Jr. in a recent press release. “Given the Bells’ refusal to honor their legal commitments to open their local networks as codified in the Telecommunications Act of 1996, there really is no other choice.” 

The Hollings bill would also give the FCC more power to fine dominant local phone companies when they fail to open their networks to rivals. The bill extends the statute of limitations for a violation from one year to five years. 

“Given the lack of competition in the local markets, the intransigent behavior of the Bell companies, and concerns about poor service quality, we are left with no choice but to adopt measures that will ensure Bell compliance with the 1996 Act,” Hollings said in a statement. 

He and the bill’s co-sponsors, Sens. Ted Stevens (R-Alaska) and Daniel K. Inouye (D-Hawaii), have built-in opposition to S-1364 in the sponsors and supporters of HR-1542, a piece of telecom legislation introduced earlier this year. 

Sponsored by House Energy and Commerce Committee Chairman Rep. Billy Tauzin (R-La.) and Ranking Member Rep. John Dingell (D-Mich), HR-1542 proposes to ease regulations in the ’96 Act, allowing the Baby Bells to enter long-distance data markets without opening portions of their local network to competitive use. The Tauzin-Dingell bill passed the House Energy and Commerce Committee but was voted down by the House Judiciary Committee. That action did not kill the bill, however; it merely “recommended” against its passage. 

In-House opposition to HR-1542 came when Reps. Chris Cannon, R-Utah, and John Conyers, D-Mich. introduced alternative legislation, HR-1697/1698, to counter what they call “the anti-competitive practices” supported by HR 1542. In short, the Cannon-Conyers bills aim to discourage those practices and uphold the Telecommunications Act of 1996. The bills would prevent RBOCs who hold more than 85 percent of the market from offering long-distance data services. The legislation would also allow competitors to resolve interconnection disputes before one arbitration board instead of state by state, and it would create a $3 billion loan program to assist companies in rural broadband deployment.

And so the legislative battle rages on, underscored by a fierce lobbying battle that’s become one of the most recognizable features on the telecom landscape. You might say that the Hollings bill simply adds a new twist to an old plot. 

But with HR-1542, HR-1697/1698 and S-1364 on the table, The Net Economy’s Paul Coe Clark III says there may be more to it than that: 

“What we are seeing in Congress now in the realm of telecom is something very different. Two completely different philosophies toward the public network are hurtling toward each other at ruinous speeds, each supported by apocalyptic rhetoric, massive lobbying and considerable political clout. Something’s gonna explode.”