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Baby Bell broadband brouhaha

May 7, 2001  •  Post A Comment

The battle emerging in Congress over broadband legislation is as much about campaign contributions and personal relationships as it is about competition and deregulation, sources in Washington say.

That’s because Rep. Billy Tauzin, R-La., and Rep. John Dingell, D-Mich., authors of legislation designed to make phone companies more competitive with cable in the broadband market, have a history of close ties to the Baby Bell phone giants.Much of the debate over their bill boils down to regulatory style-Rep. Tauzin and Rep. Dingell say they would rather help a fledgling competitor, the Bells, than regulate the dominant broadband player, cable companies.

Other lawmakers say the Bells should open their monopoly markets to competition before they’re permitted to offer broadband without restrictions.

But there’s more to the debate than policy considerations. The Bells are top contributors to both Rep. Tauzin and Rep. Dingell, and with good reason.

“These are the two most powerful members of the Commerce Committee and real stars in their parties,” said Gene Kimmelman, co-director of the watchdog Consumers Union’s Washington office.

According to Federal Election Commission data compiled by the watchdog Center for Responsive Politics, during the 1999 to 2000 election cycle Verizon and SBC Communications were the No. 1 and No. 3 contributors, respectively, to Rep. Tauzin.

AT&T, the biggest opponent to the legislation, was tied with five other companies for 20th place.

Verizon and SBC were the third- and fourth-largest funders of Rep. Dingell during the same period, behind two Detroit automakers. BellSouth ranked seventh.

Both lawmakers have plenty of personal ties to the Bells as well: Rep. Tauzin’s son, also named Bill, is a community relations manager and lobbyist on state issues in Louisiana for BellSouth, the largest phone company in the state.

The congressman counts Herschel Abbott, a Louisiana lobbyist with BellSouth who has been chosen to head governmental affairs for the company in Washington, as a personal friend, a source said.

BellSouth and SBC were among the two dozen companies that funded a lavish party hosted by Rep. Tauzin during the Republican National Convention last summer in Philadelphia.

Ken Johnson, spokesman for the lawmaker, said the familial connection, friendships and campaign funding have nothing to do with the congressman’s positions.

He said Rep. Tauzin originally introduced the broadband legislation before his son began working for BellSouth.

“I think that what [the Bells] see is someone who is the leader of telecommunications issues in the House,” Mr. Johnson said of the companies’ financial support.

Meanwhile, Andy Levin, a top aide to Rep. Dingell, formerly worked in the accounting, marketing and legal departments of Bell Atlantic, which was combined with GTE to form Verizon.

But Mr. Levin insisted that his boss’s views are based on policy, not political giving and personal connections.

“Dingell’s views are Dingell’s views, and he’s had them for a lot longer than I’ve been walking the face of the Earth,” Mr. Levin said.

“Where he is on telecom policy has absolutely nothing to do with my views,” he said, adding that Rep. Dingell’s motivation is to make sure the cable companies don’t monopolize high-speed Internet service.

Rep. Tauzin, who became chairman of the House Energy and Commerce Committee this year, is aggressively pushing the legislation now that former panel head Tom Bliley, R-Va., has retired.

When Rep. Bliley was in charge, the Virginia lawmaker blocked earlier versions of the Tauzin-Dingell bill from a vote because of his close relationship with AT&T, which had a manufacturing plant in his district for many years.

Rep. Tauzin is moving so quickly on his bill that some Republicans have publicly groused that they weren’t given enough time to digest the measure and its impact on the marketplace.

At present, the Bell companies offer high-speed Internet access, but under regulatory restrictions not imposed on cable broadband providers.

For example, the Bells are barred from building out Internet backbone beyond their phone service areas and must open their broadband systems to competitors.

The Tauzin-Dingell bill lifts the restrictions, essentially letting the Bells into the long-distance data-i.e. broadband-market. Critics say the Bells, which must satisfy a checklist of requirements to offer long-distance voice service, should meet the checklist for long-distance data.

Otherwise, the Bells may have no incentive to enter the highly competitive long-distance voice arena if they can capture a huge share of the lucrative broadband business while retaining their local monopolies.

That could hurt consumers because competition in the local and long-distance phone businesses would help lower prices, critics say.

The Energy and Commerce Committee will soon vote on the bill, which passed a House subcommittee late last month after contentious debate.

The legislation already faces a key roadblock in the House: Judiciary Committee Chairman James Sensenbrenner Jr., R-Wis., has asked House Speaker Dennis Hastert, R-Ill., for authority to review the bill.

Even if Judiciary is not granted authority to review the bill, Rep. Sensenbrenner asked Speaker Hastert to delay a vote on the Tauzin legislation until Judiciary considers its own broadband measure.

In addition, Rep. John Conyers, D-Mich., and Rep. Chris Cannon, R-Utah, offered two bills last Thursday that are alternatives to Tauzin-Dingell.

The measures place limits on Bell entry into long-distance, set aside $3 billion in loans over five years to spur broadband rollout in rural and underserved areas and make it easier for small competitors to pursue antitrust claims against the Bells.

They also force each Bell to keep its broadband system open to competitors if it controls more than 85 percent of the phone business in its regions.

Sources said that while the Tauzin-Dingell bill might pass the House, it’s almost certain to be stalled in the Senate, where AT&T and other Bell competitors have fostered strong ties with leading senators, including Senate Majority Leader Trent Lott, R-Miss., Sen. Ernest Hollings, D-S.C., and Sen. Ted Stevens, R-Alaska.