Telecom Reform Not Likely in 2005

WASHINGTON -- The 108th Congress ducked telecom reform over the last two years with a timeless dodge: the 109th Congress would deal with it. Thomas Donohue, president of the National Chamber of Commerce, says don't believe it.

"I don't see [telecom reform] getting anywhere this year," Donohue said.

Donohue's comments came during the announcement of yet another coalition armed with yet another new study. The event was the Washington equivalent of a dog-and-pony show.

The TeleCONSENSUS group includes three of the four powerful telco incumbents, the National Cable and Telecommunications Association, the chief trade association of the cable industry.

All have agitated for years and collectively poured tens of millions of dollars into politicians' coffers in hopes of winning a rewrite of the 1996 Telecommunications Act. But so far, it has all been to no avail.

U.S. Rep. Joe Barton (R-Tex.), chairman of the House Energy and Commerce Committee, who made a brief appearance at the event, even joked about the political contributions.

"In the past, you were either on AT&T's side [long distance carriers] or the Baby Bells," he said. With SBC acquiring AT&T and Verizon and Qwest vying for control of MCI, political loyalties are now muddled.

Barton told the crowd of media and TeleCONSENSUS supporters that the House would hold a series of hearings this spring and summer to "see what we can do" about telecom reform.

"We'll start with a clean piece of paper and see if we can come up with an enhancement or substitute for the Telco Act," Barton said.

The Senate has also pledged telecom reform during the 109th Congress, but differences between Barton and his Senate counterpart, Commerce Chairman Ted Stevens (R-Alas.), make 2006 a more likely target for telecom reform.

One of the primary differences between Barton and Stevens involves the Universal Service Fund (USF), which is charged to consumers on their phone bills and provides telephone service to poor and underserved parts of the country.

Stevens wants to guarantee the USF in the future while Barton and others contemplate other alternatives. TeleCONSENSUS, for instance, supports funding the USF from general tax revenue funds instead of "hidden costs that penalize" telecommunications competition.

"The Telecom Act is almost 10 years old, which is an eternity in the high-tech world," Donohue said. "The out-of-date laws are stifling innovation and holding back forces that could revive the industry and create a boon for our economy."

Virtually every lawmaker in Washington and technology executive in the Silicon Valley agrees with Donohue. What they don't agree upon is what the Telecom Act rewrite should contain.

Congress' primary concern in 1996 was to establish a set of rules for the sharing of the Baby Bells' copper network by competing local and long distance carriers. The Internet was, at best, a second consideration in the legislation.

Since then, however, broadband services such as Voice over IP have emerged, a situation never imagined in 1996.

"The legacy regulations were well intended and they were in the right place when they were passed," Donohue said.