May 9, 2001

 
Thank you, Mr. Chairman, for holding this markup of H.R. 1542, the "Internet Freedom and Broadband Deployment Act."

Our bill deregulates the provision of broadband – or high speed Internet services – provided by local telephone companies. Quite simply, this means that telephone companies will be allowed to offer broadband Internet services according to the same set of rules that now apply to cable companies.

Why is this bill necessary? Cable companies currently enjoy a substantial competitive advantage in the broadband marketplace. This advantage is due solely to regulatory disparities that were created at a time when cable and telephone companies provided completely different services.

But today, cable and telephone companies compete head to head for broadband customers, and their services are largely comparable. Yet these regulatory disparities still exist. As a result, more than 70 percent of the broadband market today is controlled by cable. This is a very troubling statistic, and the bill before us will make sure that these impediments to cable competition are eliminated.

The Committee has worked hard over the years to enhance competition in local and long distance telephone service, equipment manufacturing, and cable television and satellite services. The last thing we need now is to permit the monopolization of high speed Internet access.

Contrary to the charges of some, the bill will not roll back the market-opening provisions of the Telecom Act. All the interconnection, unbundling, resale and co-location requirements contained in that law remain intact for the provision of local telephone service by competitors.

And the substitute made in order today goes even further. It would lock in the "line sharing" requirements the FCC ordered last year. That means that competitors will continue to have access to the high value, high frequency portion of the Bell company copper loops. While I would prefer to see competitors build out their own facilities rather than use other companies’ assets at subsidized rates, I believe the line sharing provision in the substitute is a prudent one that we can accept. It limits competitors’ access to legacy investment, and should not provide a disincentive for the deployment of new facilities.

The bill also allows Bell companies to compete in the interLATA data services market. Today this market is highly concentrated with just a few dominant carriers, and it is heavily congested. For broadband deployment to really make a difference, we need high speed connections not just in the last mile, but throughout the Internet. Bell companies are best positioned to provide much needed competition in this market. In fact, these companies alone have over 275,000 miles of fiber already in the ground that are not being fully utilized for the benefit of the public.

Some say that giving the Bells entry into the interLATA data services market will remove their incentive to meet the Section 271 checklist. This is, quite simply, a red herring. The voice long distance market, though it may be declining in value, is still worth nearly $95 billion each year. Certainly that is ample incentive for Bell companies to continue applying for Section 271 approval to provide long distance services.

Even if the Bells decided not to voluntarily enter the voice long distance market, the market-opening provisions that make up the Section 271 checklist are by no means voluntary. They are substantially duplicated in Section 251 of the Act, and the Bells must comply with these provisions as a matter of law, and I certainly intend to make sure that they do.

Mr. Chairman, thank you, again for holding this markup today. I urge my colleagues to support this bill. In my view, this legislation is the single best way to get the New Economy back on track, and give the American public a real choice when it comes to faster, cheaper Internet access.