KEY POINTS ON THE TAUZIN-DINGELL
"INTERNET FREEDOM AND BROADBAND DEPLOYMENT ACT OF 2001"
H.R. 1542
1. Deregulates telephone
companies’ provision of high speed Internet access service so they can compete with
cable companies offering same service.
- Provides an incentive for all companies to
develop and deliver new, advanced telecommunications services to American consumers.
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Under current
rules, telephone wire is regulated; cable wire is not. The Federal Communications
Commission (FCC) says Bell telephone companies must "unbundle" network elements
and sell them to competitors at cost meaning that return on new facilities investment will
be limited. This vestige of the previous monopoly in voice services creates a disincentive
for the Bell companies to invest in new equipment that will bring consumers high speed
Internet access and other services.
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The central
thesis of the Telecommunications Act of 1996 was to regulate – or not regulate –
like services in a like manner. The historical "mission" of a particular company
should not be relevant – i.e., telephone and cable companies should be treated the
same if both are offering high speed Internet access.
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The Bell
companies are providing high speed internet access (DSL) service; cable companies are
providing cable modem service. Similar speed, application, price, and market. |
- The bill does not roll back network
unbundling requirements included in the Telecommunications Act that are designed to open
the local telephone market to competition. Loops, switches, and other essential facilities
are still required to be sold to competitors at cost.
2. Requires telephone companies, but
not cable companies, to provide "open access" (i.e., interconnection) to
unaffiliated Internet service providers (ISPs).
- Allows consumers the freedom to choose
which ISP they want to connect to when they purchase DSL service from a telephone company.
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Under current
rules, cable companies may force their customers to subscribe to a proprietary ISP (e.g.,
AT&T’s "At Home" service).
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Cable industry
claims there are technological constraints that hinder providing "open access"
to unaffiliated ISPs. The bill accepts that contention and requires open access only of
telephone companies.
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Policy is that
as long as one platform (cable) is closed, consumers must have an option available to them
that can provide effective competition. |
3. Permits telephone companies to
offer "incidental" interLATA service for the purpose of backhauling data traffic
over national backbone networks.
- Ensures that Internet backbone networks
remain competitive. Increasing concentration could result in higher prices to consumers
for Internet access.
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Every bit that
travels over the Internet must pass over one or more Internet backbone networks which
could become next bottleneck. Only five national networks exist, and traffic is becoming
concentrated on just a few.
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Backbone
networks exchange traffic free of charge today ("peering agreements").
Disequilibrium in traffic could lead to disintegration of peering, and higher charges to
consumers.
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Today, telephone
companies are prohibited from hauling data over so-called LATA lines, so they can’t
operate backbone networks. Bill allows them to enter this market to enhance competition. |
4. Prohibits telephone companies to
market, bill or collect for voice telephone service provided over high speed,
packet switched data networks until FCC authorizes long distance entry.
- Allowing telephone companies to backhaul
data traffic over LATA lines shouldn’t permit them to offer voice long distance
service until they have met the Section 271 checklist and receive FCC approval.
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Opponents argue
that in a digital world, it is impossible to tell the difference between a voice bit and a
data bit, so Bell companies may use high speed data lines to transmit voice calls. They
argue that the Bell companies would escape the Telecom Act restrictions on providing voice
long distance service.
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But voice long
distance over packet switched networks is not a viable service, and won’t be for 3-5
years. Moreover, the bill also prohibits the Bell companies from marketing. |
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