Wave Issue 0207 3/4/02 Article 2-01

***U.S. House of Representatives Passes Tauzin-Dingell Bill
(February 28)

Following a full day of debate, the U.S. House of Representatives
today passed H.R. 1542,
"The Internet Freedom and Broadband Bill," better known as the
Tauzin-Dingell bill. The bill passed by a large majority, 273 to
157, with many members voting across party lines. It is not
expected to be passed by the Senate this year, with several
influential Senators voicing strong opposition to the bill,
including Senator Fritz Hollings (D-S.C.), Chairman of the
Commerce Committee.

Tauzin-Dingell has become a catchword for controversy, as the
bill has become the focal point of a battle with incumbent local
exchange carriers (ILECs, the regional Bell companies) on one
side, and competitive and data local exchange carriers (CLECs and
DLECs), long distance providers, and cable operators on the
other. The background for the battle is the 1996
Telecommunications Act, which attempted to create competition in
both local and long distance telecomm markets, by linking the
two. Under the 1996 Act, the ILECs would be allowed to enter the
long distance voice and data market, but only after they provided
open access to elements of their local networks to CLECs (a
process called unbundling). As the broadband market has
developed over the last several years, encouraging its growth has
become a major goal of government regulators, with the 1996 Act
unbundling requirements an important tool.

Now many CLECs and DLECs have come and gone, broadband subscriber
rates are low, and few ILECs have qualified for entrance in long
distance markets. The fight is essentially, what went wrong and
how can we fix it. Tauzin-Dingell seeks to fix it by relieving
the ILECs of their requirements to provide network access to
CLECs--supposedly removing an impediment to investment, and
stimulating competition with other broadband providers,
especially cable. Since under the 1996 Act CLECs can gain access
to any new network elements, the ILECs have argued that they
receive no competitive advantage or ROI from capital investment.
They argue that under the 1996 Act, there is no reason for them
to invest in new infrastructure and grow their business. CLECs
retort that ILECs did everything in their power to stall and
limit the unbundling process, thereby driving most CLECs into
bankruptcy. They see Tauzin-Dingell as unjustly rewarding the
ILECs for failing to obey the 1996 Act.

Obviously this is a very simplified overview. The WAVE Report
has covered this story thoroughly over the last several months.
The articles most relevant are:

Tauzin-Dingell, Good Legislation or a Threat to the US Economy?

WAVE Issue #0137 8/15/2001
An overview of the bill, and summary of a report by Tech Central
Station analyzing its possible effects on the GDP. They conclude
that if passed, it could reduce the GDP by over $50 billion.

www.wave-report.com/other-html-files/TauzinDingell.htm