 | |
| |
TechnologyDaily Mobile
The Telecom Hatfields And McCoys
by Teri Rucker
The feud between telecommunications competitors is so tense that anyone who wades into the debate over high-speed Internet access, even with the most seemingly benign proposal, likely will be rhetorically shot. The result has left lawmakers weary and may prolong the downturn in both the information technology and telecom industries, observers say.
"Everyone seems to agree that broadband services are important to consumers and that broadband can help revive the high-tech sector of the U.S. economy," said Scott Harris, principal in the Washington-based law firm of Harris, Wiltshire and Grannis. "The extreme positions taken by both sides of the debate tend to ensure that nothing of consequence happens, and that can't be the right answer."
The debate has been raging since enactment of the 1996 Telecommunications Act, but the tension has reached a fever pitch as the FCC is poised to rule on decisions affecting how much access competitors to the regional Bell companies will have to Bell networks to provide broadband services. Both the competitors and the Bells have heightened lobbying efforts on Capitol Hill, trying to get Congress to send a signal to the FCC.
"The debates tend to become ideology driven rather than pragmatic," Harris said. "That is why reform in the telecom industry has tended to take decades."
Daschle Takes The Broadband Bullet
Senate Majority Leader Thomas Daschle found out last week just how nasty the fight could be when he found himself caught in the crossfire of this Hatfield-and-McCoy debate.
Amid the calls for action on this issue, the South Dakota Democrat began crafting a proposal that was designed to be neutral. Those familiar with the language say Daschle's staff was working on a resolution that would have expressed the Senate's opinion that the deployment of broadband services is important to the economy and that would have encouraged the FCC to quickly to resolve outstanding rulemakings of interest to both the Bells and their competitors.
FCC Chairman Michael Powell has said he wants to complete those proceedings in short order, the resolution would not have been binding, and only the most entrenched Luddite would quibble about the importance of broadband, observers said. But the issue apparently is not that simple.
Those familiar with the situation say the inclusion of the word "expeditiously" in Daschle's draft resolution, or a similar sentiment, infuriated the competitive industry. And expressing a desire that the FCC resolve issues that the Bells' competitors want resolved caused convulsions among Bell lobbyists.
Lobbying careers are made or broken over the inclusion of a sentence or word in a letter or resolution, said an industry and government veteran, who described the situation as "some fraternity ritual" of "double secret handshakes." "They are going to be arguing over what the definition of 'is' is pretty quickly," a Senate source added.
The issue is so controversial that even though language of the proposal was widely discussed and lobbied last week, a spokeswoman for Daschle said: "I am not in a position to get into a detailed discussion on the broadband issue. ... With regard to any plans he may or may not have to introduce legislation or a resolution, no decision has been made, not only on what it might be or whether he is going to do it."
Firing Blanks From The Hill
The FCC is widely believed to be moving toward some measure of deregulation, perhaps phasing out competitor access to some portions of the Bell networks, so encouraging the FCC to act quickly is tantamount to endorsing deregulation, observers said. The competitive industry vehemently opposes any Senate resolution on the issue.
"Even weighing in on the timing is weighing in on the merits," said John Windhausen, president of the Association for Local Telecommunications Services, who urged the Senate to drop the proposal altogether.
The Bells, meanwhile, do not want the FCC to move on issues that could favor competitors, and one lobbyist sympathetic to the Bell cause definitely does not want a congressional resolution. The source called the idea toothless and said it makes the lobbyists look foolish. "All that time, effort and money, and all we get is a resolution? I'd rather have nothing," the source said.
Another source found the lack of progress frustrating, saying: "The economy is in the tank, the telecom sector is in the tank, there is no growth anywhere in the IT sector, and we are looking for winks and high signs and the magic words in a resolution that has no legal effects. If that is not a waste of somebody's money, I don't know what is."
The problem now is that if Daschle drops the proposal, the competitive industry will claim victory. If he forges ahead and encourages quick action, the Bells will claim victory. And either way, everyone still will be angry with the lawmaker, one industry observer noted.
The fighting and refusal to compromise or even be reasonable "is becoming a joke on Capitol Hill," a tech industry source said. Every time either side of the industry goes on the record about broadband or deregulation, the source said, their rhetoric is so exaggerated "it is just plain silly."
All the fighting -- coupled with more pressing business like authorizing war on Iraq, keeping the government funded in fiscal 2003 and finishing the work of the 108th Congress in the next few weeks -- has put any broadband proposal on hold for the time being.
A Self-Inflicted Wound?
All the noise only irritates lawmakers and keeps already-distraught investors reaching for the Maalox. "People on the Hill are being inundated by both sides bickering about protecting their business models, and people are getting really fed up with it," a Senate source said.
Unwillingness to compromise will only hurt the industry, said Grant Seiffert, vice president of external affairs and global policy at the Telecommunications Industry Association. "It is unfortunate that broadband is being politicized" and the Daschle proposal waylaid by it, he said. "Any way to get the message across to the FCC to move quicker ... is critical," he said, noting that without action more jobs in the telecom-vendor sector will be lost.
But Barry Piatt, the spokesman for Sen. Byron Dorgan, D-N.D., said the hoopla in the telecom industry is no different than in any other sector and the frenzied rhetoric is common at the end of the session. And even if lawmakers are irritated, Blair Levin, a policy consultant at Legg Mason Equity Research, noted that they "are enormously forgiving of errors of judgment and faux pas such as this" within a two-year election cycle.
Levin said the analytical community knows the ball is in the FCC's court. Whether Congress sends a signal to the FCC is of little consequence unless members pass a law, he said. "Professionals get paid to think that [sending a signal] is a good thing to do, but it doesn't matter all that much," he said.
Levin added that the FCC is going to make its decision based on the record created during its proceedings. A source close to the FCC, however, noted that the extreme positions muddy the record, making it harder for staff to craft a policy that will be supported by the facts and withstand the inevitable court review.
NEW FEATURE
-Advertisement-
-Advertisement-
-Advertisement-
