TELECOM Digest OnLine - Sorted: US Telecom Overhaul Chances This Year Seen Slim

US Telecom Overhaul Chances This Year Seen Slim

Jeremy Pelofsky (
Mon, 25 Jul 2005 19:11:41 -0500

By Jeremy Pelofsky

U.S. lawmakers have been promising to begin overhauling the country's
telecommunications laws this year to keep up with advancing
technologies, but analysts say the odds of passing a bill this year
are slim.

While there were predictions legislation would be completed in the
U.S. House of Representatives by August, only the first public drafts
of reform bills are expected to be unveiled this week, according to a
congressional aide and industry lobbyists.

U.S. telephone companies like Verizon Communications and SBC Communi-
cations Inc. are pushing Congress to ease regulations so they can
quickly deploy high-speed Internet services such as video, voice and

Lawmakers may also consider curbing some states' oversight of the
industry and will likely weigh revamping the program that offers
subsidies for telephone service to low-income homes and rural areas.

Cable and telephone companies are battling to boost their bottom lines
by signing up as many customers as possible for a suite of
communications and entertainment services.

Verizon, SBC, BellSouth Corp. and Qwest Communications International Inc.
called the Baby Bells, are expanding beyond traditional phone service
to high-speed Internet services, known as broadband.

But the Bells complain they are at a disadvantage because they must
abide by laws for traditional phone service.

"I think this is an effort to try to actually move the ball in terms
of having regulation today in this industry match much better the
actual competitive environment than we see today," BellSouth Chief
Executive Officer Duane Ackerman told Reuters.

Yet, higher on the priority list for Congress is a bill to finish the
transition to digital television airwaves. The old analog airwaves
will be sold for wireless services and could bring billions of dollars
to plug the budget deficit.

"It's tough, there's a chance that they might move something (on
telecommunications) in the House, but it's certainly not a slam dunk,"
said Paul Glenchur, a Stanford Washington Research Group analyst. "The
Senate side is a little more complicated because not everybody will
have the same priorities."

He also said lawmakers were likely divided over whether to act or let the
Federal Communications Commission, which regulates the industry, address as
many issues as possible.


The last major telecommunications law, which was broad and signed in
1996, took several years to craft. And now with the phone industry
merging -- Verizon is acquiring MCI Inc. and SBC is buying AT&T
Corp. -- competition has shifted to mostly between cable and telephone

Sen. John Ensign (news, bio, voting record), a Nevada Republican and
chairman of the Senate Commerce subcommittee on technology, innovation
and competitiveness, plans to unveil his bill this week and a House
bill may also be introduced, the aide and lobbyists said.

The primary goal of the Senate bill is to apply the same rules to
services, like broadband, regardless of the provider, they said. But
lawmakers will likely have to balance the desire for limited rules to
avoid stifling innovation with demands for consumer protections.

"At this point we're hopeful" Congress will act this year on
telecommunications legislation, BellSouth's Ackerman said last
week. "I think it all depends on what comes up."

The Bells particularly want Congress to grant them authority to offer
video without seeking approval from municipal authorities, which could
be a cumbersome process.

"If they were just to focus on that, the odds of something like that
happening (this year) would be greater," said Blair Levin, a Legg
Mason analyst. "But the danger is that you then push back even farther
a bigger bill."

In February, Rep. Fred Upton (news, bio, voting record), head of the
House telecommunications subcommittee and a Michigan Republican, said
he planned to have a bill done in the full House by summer break,
which begins on Friday. His spokesman declined to comment.

Copyright 2005 Reuters Limited.

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