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TechnologyDaily Mobile
The Bells, And Broadband Tolls
While long distance and local phone companies battle over market access, computer manufacturers are joining the fight over the increasingly vital high-speed data market.
Broadband connections, which permit two-way transfer of voice and data at high speeds, are the key issue. Consumers currently have just two real options: cable or telephone networks. Eventually, wireless and satellite options will evolve, requiring a new approach to regulation of the merging industries.
Computer makers must be part of the process, they say, because the Internet is becoming the most important factor in the growth of the PC market. And consumers feel the need for speed, especially those who go from the T-1 fast lane at the office to slow zones of 56 kilobits — or less — at home.
"When we look at our customers, the number one reason they buy a computer is to get on the Internet. The number one complaint is the Internet is too slow," said Jeff Campbell, manager of technology and telecommunications policy for Compaq, at an Economic Strategy Institute summit on the issue last month.
Today's "bandwidth and the slow speeds that go with it have literally and figuratively slowed down the growth of the Net," said Ted Heydinger, director of government relations for Dell. Dell, which in the past had relied on the Information Technology Industry Council (ITI) to defend its broadband position, has stepped up its involvement. Last month, Dell hired Regina Keeney, chief of the FCC's International Bureau, to head its Beltway office. Kenney helped implement the 1996 Telecommunications Act in an earlier role as head of the FCC's Common Carrier Bureau.
The hardware companies and their associations see their absence from the telecom fights of the past as an advantage. Manufacturers are not as interested in who is providing high-speed data access as long as connection speed dramatically increases.
"We feel we can be the neutral body in the debate," said ITI spokeswoman Connie Correll. "Unlike the phone folks, we don't have an ox to gore."
ITI has issued a set of 10 principles to promote deployment of broadband services aimed at reducing regulations imposed on the Baby Bells. The industry association and the phone companies claim that FCC regulations have slowed their entry into the data market.
Fiona Branton, ITI's vice president for government relations, said it has been difficult to find a congressional audience for their plan because staffers and lawmakers "think the principles are hard to understand."
"It's a more difficult problem than you think," Branton said. "Congress can't legislate everyone to upgrade their networks. We think we're stuck with the Telecom Act."
A number of the Baby Bells and their competitors are, however, offering digital subscriber lines, which provide home access to a type of Internet connection that was once only affordable to corporate clients.
The 1996 Telecommunications Act requires that high-speed data services be made available to "all Americans" in a "reasonable and timely manner." But the assessment of that requirement, made by the FCC, is highly subjective.
"Our report is just a snapshot taken a few seconds after the starting gun of a very long race," FCC Chairman William Kennard told members of the Senate Antitrust, Business Rights and Competition Subcommittee last month.
Kennard attributes the growth of broadband to FCC policies to promote competition among technologies, and now says it is time for the FCC and Congress to let the market ripen.
"The market seems to be working and the best role for government is to observe, monitor and enforce our long-standing policies of promoting competition and providing the spectrum and access rights that are the building blocks for a competitive market," Kennard said.
Representatives from all sides of the broadband debate take issue with parts of the FCC assessment, and the agency's performance.
Don Evans, Bell Atlantic Vice President for federal regulatory matters, said the FCC needs to take into account the dynamics of the data market because traditional divisions of power within the agency don't wash anymore.
"The marriage is maturing" between the computer and telephone companies, Evans said. "They look at things in their old smoke stacks. You have to look at these things together, not in a vacuum."
Despite a working relationship with the phone companies, the computer interests like to maintain an air of independence.
Compaq's Campbell said there is no way his company could match the army of lobbyists dispatched on Capitol Hill by the local and long distance phone companies, but that hasn't dissuaded the industry.
"You're seeing more shoe leather on telecom than you did in the past," he said. "We have a lot of credibility in this."
But Greg Simon, co-director of the OpenNET lobby, said the computer companies try to stay above the fray so they don't alienate their broadband partners. OpenNET is a coalition made up of large companies such as America Online and US West that want to tap into the high-speed data market via cable networks. The coalition argues that local phone companies have to allow competitors to tap into portions of their networks and that, therefore, cable should offer similar access.
"The hardware guys want to sell to everybody and anybody, so they don't want to offend the cable guys," Simon said.
In fact, Dell has an agreement with US West that allows the PC maker to configure an individual's computer to connect with the phone company's DSL service. Dell also will directly install cable modems to give more streamlined service to its customers.
"What's difficult for the customer is they have to call the cable company and phone company to see if they can get broadband," said a Dell spokesman.
Although computer companies are making broadband deals, they're leaving most of the lobbying to their associations. Branton said it is hard to explain to the fast-moving computer companies the amount of time it will take for the FCC to affirmatively act on high-speed data.
"That's the most frustrating thing to our companies is that is all move so slowly," Branton said.
 | — by Rebecca S. Weiner |
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