roundtable: Telecom Post #3
roundtable: Telecom Post #3
Telecom Post #3
CWHITCOM@bentley.edu
Fri, 02 Jun 1995 10:38:15 -0400 (EDT)
Date: Fri, 02 Jun 1995 10:38:15 -0400 (EDT)
From: CWHITCOM@bentley.edu
Subject: Telecom Post #3
To: roundtable@cni.org
Message-Id: <01HR87BXXQFM001F36@bentley.edu>
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Free Speech Media, LLC
June 1 1995
Number 3
5 pages
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Compiled, written, and edited by Coralee Whitcomb
Please address all questions and comments to cwhitcom@bentley.edu
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The following report is posted to various discussion lists
and is also available from the CPSR listserv. To subscribe,
send to LISTSERV@CPSR.ORG with the message
SUBSCRIBE TELECOM-POST YOUR NAME.
The Telecom Post will be published weekly while the U.S. Congress
works on the first comprehensive rewrite of legislation regarding
telecommunications since the Communication Act of 1934.
TOPICS
Legislative Timeline
H.R. 1555 passes
S. 652 on its way to the floor
FCC and OTA at risk
Common Carriage
Interoperability
Censorship
TIMELINE
The House and Senate telecommunication bills are now ready for a
full vote. Senate bill 652, is expected to arrive on the floor
June 5. HR 1555 is not scheduled for a vote until July. This
is the time to take whatever action you feel is necessary to
either improve or defeat these measures.
An excellent article, "The Robber Barons of the Information
Highway, Telecommunications companies promise the digital
kingdom of heaven. Don't count on it" by Joshua Wolf Shenk that
ran in The Washington Monthly does a wonderfully thorough job of
describing the industry/legislative relationship concerning
these two bills. Due to its 8 page length, I will not repost it
here but will gladly forward it on to you at your request.
Write me at cwhitcom@bentley.edu.
TO PASS OR NOT TO PASS
The feelings about the passage of the telecommunications bills
now on their way to floor votes in both houses are mixed
throughout the public interest community. Many feel that these
are just bad bills and total defeat should be sought. This
position was not adopted by many until now since it eliminates
an advocacy group from the discussion if proposed too early in
the game. Others, however, feel that the longer the nation
takes to adopt a new slate of rules at the federal level, the
more likely states will take on the responsibility of designing
their own regulatory environments and we will end up with a
patchwork of incompatible rules.
H.R. 1555, The COMMUNICATIONS ACT OF 1995
The House telecommunication bill passed the Commerce Committee
markup on May 24 with a vote of 35-8. Dissenters included
Markey (D-MA), Studds (D-MA), Bryant (D-TX), Pallone (D-NJ) and
Klink (D-PA).
Cable Rate De-regulation
The de-regulation of cable rates has been the rallying cry of
both Rep. Ed Markey (D-MA) and the Administration. Under the
1992 Cable Act, cable rates are automatically de-regulated once
an alternative service is available to 50% of a community. H.R.
1555 would gut that act and deregulate all but the basic tier of
cable rates. Rep. Markey proposed an amendment to preserve
cable rate regulation but it was defeated 32-14. It is this
issue that the Administration most vehemently opposes. Rumors
have it that the Administration would even consider a veto to
the bill based on this issue. Direct Broadcast Satellite (DBS)
is a potential competitor but, to date, has penetrated the
market at under 1% as compared to cable's 60%. Its $700 price
for a satellite dish, inability to pick up local signals, and
one-way transmission mode bode ill for a near-future competitive
position.
Terms on Competitive Entry into other Services
The Bell companies are not happy about the head start given to
their competitors' entry into local markets while they must wait
to enter long distance. Gingrich is in favor of even greater
amounts of de-regulation and would possibly support the Bell
position. The competitive test for the Bell companies is
"facilities-based competition" in both the residential and
commercial markets which must be attained before they're allowed
entry to long distance. The language requires that the
competitor offer services that are "comparable in price,
features and scope" to the existing Bell's.
There may be some horsetrading on this issue. A second bill
introduced by Judiciary Chairman Henry Hyde (R-IL) gives the
Justice Department a role in determining Bell entry into long
distance and manufacturing. When the bill makes it to the
floor, it is likely that the Bells will fight to retain the role
of the Justice Department in place of the "facilities-based
competition" requirement.
Foreign Ownership
Foreign ownership of broadcast firms will retain its current
limits but telecommunication firms are freed from these limits
as long as other countries remove their restrictions on US firms.
Universal Service
Rep. Crapo (R-ID) offered an amendment "Affordable Voice Grade
Service" which passed on a 30-13 vote. It calls upon state
commissions to "permit residential subscribers to receive only
basic voice-grade local telephone service, for a period of not
more than 3 years, equivalent to the service generally available
to residential subscribers on the date of enactment." During
the three-year period rate increases will be permitted if it is
shown that the increase is necessary to provide universal
service, prevents provider economic hardship, and is in the
public interest. Democratic lawmakers warned that this opened
the door to rate hikes during a supposed three year rate freeze
meant to protect the consumer during the transition to
competition. It runs directly counter to the universal access
provisions in S652 which includes "comparable access" and
"incremental cost" language.
Universal Service
Title I, Sections 246(b)(5) and 250 were approved without
amendment. "(5) EDUCATIONAL ACCESS TO ADVANCED
TELECOMMUNICATIONS SERVICES. To the extent that a common
carrier establishes advanced telecommunications services, such
language should include recommendations to ensure access to
advanced telecommunications service for students in elementary
and secondary schools." This provision eliminates the threat of
the Cox (R-CA) amendment that threatened to hold universal
service provisions to POTS (plain old telephone service) and the
promise of the Eshoo (D-CA) amendment to expand universal
service provisions to students in continuing, higher education
and library settings.
The Public Voice
Section 656, provision for PEG access (public, education,
government), the community-based access to cable systems, made
the cut out of markup. This means that provisions for PEG
access are required of telephone companies and their coming
video dialtone platform on a parity level with those required of
cable. It was greatly feared by the public access TV community
that without such provisions, cable would shortly be freed from
requirements to provide the community voice an outlet.
S. 652, THE TELECOMMUNICATIONS COMPETITION AND DEREGULATION ACT
OF 1995
Attention now turns to the Senate side as it comes to the full
Senate floor. Universal Service provisions are generally much
stronger in S652 than HR1555. The major stumbling blocks appear
to be around its funding mechanism. The Congressional Budget
Office "scored" the bill meaning it found the universal service
provisions will constitute an "indirect tax" on the American
people. It estimates that this will amount to about $125
million over a five-year-period and that those costs will be
passed on to all citizens in the forms of state taxes and rate
increases. The Senate Budget Committee considers the universal
service language "revenue generating" , meaning a tax, and all
taxing legislation must originate in the House. Finally, the
International Communications Association estimates that the bill
would result in over $44 billion in telco rate increases over
the next five years due to the preemption of state and federal
regulators right to impose "rate of return" regulation.
Senate contention may arise over attempts to further
deregulatory measures in the bill. A group of Senate
Republicans has formed to push this effort and, should Senator
Dole (R-KS) join this group, the bill could lose the support
Sen. Ernest Hollings (D-SC). According to the Washington
Telecom Week, May 26, 1995, the lack of agreement between
Hollings and Senate Commerce Committee Chairman Larry Pressler
(R-SD) then opens up the possibility of a contentious floor
debate. "This, in turn, would make it hard to get a cloture
vote to stop a filibuster, and the prospect of a Presidential
veto would loom.."
ON THE CHOPPING BLOCK - Departments and Agencies at Risk
Federal Communication Commission (FCC)
House Speaker Newt Gingrich (R-GA) has spoken out strongly in
favor of downsizing the FCC to about 250 employees. The
Progress and Freedom Foundation (Gingrich's favorite think tank)
is currently preparing a report for legislators recommending
just that. Concern has been expressed that with the coming
onslaught of regulatory activity once these bills pass, the FCC
will have more work to do than ever.
Office of Technology Assessment (OTA)
OTA is charged with the research and publishing of reports
analyzing various science and technology issues. These reports
are requested by Congress but available to the public upon
publication. They are typically excellent and written in an
easy-to-read, non-academic style. The elimination of OTA is now
under consideration by the Senate Budget Committee as a
cost-reduction measure meant to reduce legislative-related
expenditures. This move is penny-wise and pound foolish as the
proposed $21m savings would eliminate a sound source of
information that often charts the course of multi-billion dollar
programs. Committees that still need to act on this are the
full Senate Budget Committee, the House Budget Committee, and
the House and Senate Appropriations committees.
COMMON CARRIAGE
In Josh Shenk's article - "[C]ommon carriage would require
companies to serve everyone for the same price, preventing them from
forcing folks they don't like off the roads by spiking
prices." We currently enjoy common carriage in our phone system
and railroads. In each case it took government intervention to
establish it. Evidence abounds that when not enforced, industry
does not voluntarily take this route.
INTEROPERABILITY
Again, from Josh Shenk's article - "This means that any one
point on the network can contact any other point without having
to go through a central server." Both our phones and the
Internet follow this model. It allows everyone the ability to
provide content as well as to receive. Industry, realizing that
content is where the money is, stands firmly opposed to such a
notion. From Shenk, "Instead of an easily accessed system of
public highways, industry would prefer it be a stratified
cyber-world, a series of toll-roads that head straight for the
mall and the race track. Here's how Paul Shumate, Jr., an
executive at Bellcore, a Baby Bell research consortium,
described the potential of online gambling and video games to
Macworld magazine: 'You suck 'em in cheap. Then, as they get
to higher and higher levels, increase the rate per minute'."
Interoperability requires key specifications be shared so that
third parties can write applications which use the full
functionality of the networks. Microsoft is leading the charge
against the term "interoperability" claiming that it would
justify the taking of their intellectual property. Opponents to
the term include the Business Software Alliance and the Alliance
to Promote Software Innovation. These groups include Microsoft,
Lotus, Novell, Apple, IBM and Intel. Proponents include AT&T,
Amdahl, Bell Atlantic, BellSouth, MFS Telecom, Northern Telecom,
NYNEX, Oracle, Storage Technology, Sun Microsystems, Tandem,
Viacom, and America Online. Several public interest groups have
been active on behalf of interoperability provisions, including
the Consumer Federation of America, the Media Access Project,
People for the American Way, and the Taxpayers Assets Project.
According to Tom Gooch of Storage Technology Corporation:
In terms of information -- interoperability is the
transparent access to digital data between elements
of an information network. These elements are supplied
by a wide range of manufacturers, they include computers,
telephony devices, and their interconnecting
infrastructure... [I]nformation is most valuable when it
can be sent and received without the requirement that the
sender and the receiver have identical equipment. To
accomplish true information interoperability, all sources
of information need to support open, non-proprietary
interfaces...
In this open environment, products must compete based on
their perceived value to the consumer and not on their
access capability to the infrastructure...
CENSORSHIP
On May 24 a New York state trial court ruled that Prodigy is
responsible for libelous statements made by its users. This
decision is differentiated from others which relieved providers from
liability due to their role resembling a bookstore or
library. Since Prodigy has chosen to monitor incoming
transmissions and performing some censorship duties, its
behavior is more that of a publisher and therefore responsible
for the content of the posts. More information can be found at
http://epic.org/free_speech/.
Senator Diane Feinstein (D-CA) has announced her intention to
propose an amendment to the proposed anti-terrorism legislation.
This amendment would make a criminal offense of dissemination
of information about manufacturing of explosives. This broad
stroke would hold all newspapers and broadcasters culpable for
their coverage of the make up of the Oklahoma City bomb. The
ACLU has come out strongly opposed to this amendment and invites
you to find more information at gopher://aclu.org:6601 ACLU
Constitution Hall on America Online --keyword ACLU
The Exon Amendment in S652 has been revised but still does not
define "obscenity", liability for transmission of obscene or
indecent communications. Its reach is extended to
non-commercial as well as commercial providers. It does not
protect providers if they know, in advance, an entity intends to
violate the obscenity restrictions. Other new provisions do
nothing to make this bad amendment more tolerable.
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