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DSL Prime: GOP vs. Tauzin-Dingell

DSL Prime looks at the latest from capitol hill, examines new fast DSL technology, and collects news from around the world in the DSL Prime News Briefs.

by Dave Burstein DSL Prime [December 18, 2001]

50 Republicans kill Tauzin-Dingell
Rebellious caucus wants amendments—and time
"We've got an election coming, and we don't want to alienate either side of this one. We don't want a vote" was the message sent to Hastert, who had scheduled T-D to come to the floor Friday. 33 Republicans wrote a note early this week in favor of an amendment that would (partially) protect competitors and allow regulators to control spamming, cramming (SBC just got caught), and child pornography. Billy Tauzin insisted on bringing the bill to the floor without allowing the amendment. He suggested alternatives—but without enough time for anyone to study and understand them, much less reach consensus. Besides, everyone wanted to go home.

In a quandary, 50 Republicans insisted the bill be discussed in a party caucus before it went to the floor. The Republicans were afraid to look like they had rammed a bad bill through. Hastert punted, and put everything off until at least March.

New telecom rules—Content is King
Telecom rules make Internet policy, meaning they need much closer examination. Suddenly, the First Amendment and Freedom of Speech becomes central to all telecom debates. Billy Tauzin's initial bill prohibited any state regulations, including those necessary to keep ideas following freely. Commissioners from California to Massachusetts made multiple calls to Congress. No Congressman wanted to vote against an amendment blocking pictures of kids having sex.

DSL Prime strongly believes in free flow of content over the Net. SBC's new ISP contracts are designed to allow them to erect toll barriers on the Internet, collecting extra from video speed content. Instead, Stanford Professor Larry Lessig is bringing the "end-to-end principle" to the center of public debate. Lessig's new book "the future of ideas" is the most important thinking about the Internet this year. Jeff Chester and the Center for Media Democracy also belongs on your radar screen, building a Washington coalition for open Internet content.

Failure for Bells and their D.C. folk
"Heads will roll at the Bells if they don't get this through," an opponent predicted months ago. "They are pushing so hard because if they fail, their careers are doomed." The Bells depend enormously on effective Washington lobbying, but the Internet provides tools for opponents without $20M war chests.

Tauzin claimed "this was simply a delay not a defeat." (Jerome Pelofsky, Reuters) DSL Prime hopes the telcos instead refuse to continue with the legalized extortion that is the American Congressional system.

To my friends at the telcos
I believe the regulations you work under should be fair and reasonable, and am willing to support Tauke's ideas of connecting at the CO rather than the remote, ensuring a fair return on investment by preventing TELRIC reductions before a fair return can be earned, and many other proposals.

I received several thoughtful comments from telco folks, suggesting arguments in favor of the bill. Crucial was the issue of the "massive investment" you still needed to make, and the return necessary to recover it. Unfortunately, the facts are very different. You can put a DSLAM in every unserved CO in the country for a tenth of the dollar amount SBC has been touting in D.C., and your money is returned in 2-3 years. BellSouth is already close to 70 percent coverage, adding mini-DSLAMs to existing remotes. SBC has already cancelled Pronto, and has no intention of reviving the massive fiber/remote build even if the bill passes. I've got actual cost figures from Sprint for an article I'm working on—your return is already there, now that the operation is smooth.

The most telling argument came directly from Seidenberg and Whitacre. Seidenberg in 2000 told Wall Street that Verizon would be 90 percent wired in 2002; Whitacre had promised 80 percent. Both expected to be profitable. Since then, costs have decreased dramatically, to between $200 and $400 per customer for the complete equipment set. Costs will keep dropping, unless Moore's Law is repealed. At $30 month/$360 year, it's easy to see a return on the investment. Now please make it happen.

The folks who did it
Congressional opposition was inspired by a huge outpouring of visitors and mail. Sue Ashdown rallied the AISPA group to save their businesses. John Windhausen (of ALTS) and Russell Frisby (of CompTel) brought together the CLECs. Government bodies, especially the NRC, avoided opposing T-D, but made the bill look foolish by publishing the facts the lobbyists were busily concealing. The press and Internet community were clear this was a "bell bill". Perhaps the most effective opposition were the 31 state commission that went on the record to their delegations that this bill could raise prices and hurt competition. MCI and Sprint swung some key Congressmen.

The AT&T "separate peace"
It was just a few sentences in a speech by Verizon's Tom Tauke, noticed by almost no one in the press, but it was a clear signal. "Nor are we advocating imposing new regulations on our chief competitor, cable, through such requirements as open access regulations" was in Tauke's speech Verizon promoted heavily, and soon after AT&T responded by reducing their opposition to T-D. Organizations like ALTS and Comptel led the battle. AT&T stayed in the background, and of course fear of losing AT&T contributions was in legislator's minds.

Now, the FCC NPRM
With T-D likely to fail in the Senate, the Bells two months ago shifted to a compromise at the FCC, and yesterday the Commission announced a "Notice of Prospective Rulemaking". There is already dispute amongst the Commissioners; Powell continues to support extreme deregulation, while others think competition needs protections. These are crucial issues for all of us—I urge everyone to file their opinions, whether you agree with my opinions or not. Don't leave it all to the D.C. lawyers.

The docket is CC 01-339; in the next issue, I'll be printing instructions on how you can file electronically in 15 minutes.

Congress for Sale
Ivan Seidenberg said he wanted a vote in the House to "send a message" to the FCC, but if the bill had passed, the real message sent would be that some Congressmen are for sale. (Anyone surprised?)

Not all Congressmen are corrupt of course, but folks like Elliott Engel (D., N.Y.) took $19,000 from Verizon for the last election, and of course Tauzin raised millions of dollars. Engel's New York district is already wired for DSL, and his Bronx constituents would see little benefit from any of the purported "benefits" of the bill. Yet he repeatedly called other Congressmen, with arguments that could have come from Verizon lobbyists. (Engel's spokesman promised to get back to me to confirm or deny the rumors that Engel was also motivated by a rumored college-age friendship, but did not call.)

My best guess is the Bell's direct and indirect expenses on this one are over $30 million. It's been horrifying to see the power of $300 billion companies promoting their views, and watch the press not catch the lies coming out.

We are journalists, not investment advisers; invest at your own risk and do further research.

Copyright 2001 Dave Burstein.
The DSL Prime Newsletter is reprinted with permission.

"The power of the printing press belongs solely to those who own the presses"
—A.J. Leibling

The Internet is the cheapest printing press ever invented.

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Related articles:
	[Dec. 7, 2001]	CISPA Predicts More Disasters
	[Dec. 5, 2001]	DSL Prime Editorial: NRC vs. Tauzin
	[Nov. 20, 2001]	ALTS Says Tauzin-Dingell Would Cost 77,000 Jobs