The following text is copyright 2005 by Network World, permission is hearby given for reproduction, as long as attribution is given and this notice is included.

Making Verizon giddy

By Scott Bradner

The first public step on a potentially long road to a replacement for the Telecommunications Act of 1996 has now been taken. Senator John Ensign just introduced the "Broadband Investment and Consumer Choice Act" which would replace large parts of the 1996 Act. I don't think that anyone could claim with a straight face that this is a balanced proposal. If anyone somehow thought that, they would have been quickly corrected by the almost giddy reaction from the traditional telephone carriers, such as Verizon, and their trade associations.

The 72-page bill (http://ensign.senate.gov/static_media/072705_telecom_bill.pdf) that Senator Ensign (R-Nev), chair of the Senate Commerce Committee's Technology, Innovation and Competitiveness Subcommittee, introduced is far from all-bad but it is also far from all-good.

The bill removes most facilities-based telcom and satellite TV providers from any sort of state federal or local regulation, including prices or quality. The most mentioned effect of this is that local governments would not be able to stop video service deployment by telephone companies. The only exception is that ILECs would have to continue to sell access to their copper access loops and sell telcom services at wholesale rates to competitors for a while. Broadband, defined as anything more the 64Kbps, providers would not be able to block customer access to any legal content or services (including VoIP) but could offer a special reduced access service for those that want blocking. Under the bill the ILECs would have to offer a basic telephone service (BTS) at current rates throughout their territories, with the quality characteristics defined by the FCC, at least until 2010.

The bill does not actually ban municipally owned networks but it does put restrictions on them that will be unlikely to be overcome, so the effect is about the same.

What the bill does not do is to back away from the old and restrictive service type based thinking. The bill still talks about broadband, telephone, satellite TV and video services and treats them differently. Other than requiring that ILECs offer a BTS, because of the historical importance of such a service, and sell access to their copper access loops, because of the regulated monopoly under which this was installed, there should be almost no regulations and this regulations should not care what the service being offered is. Half of this bill could go away if it just said the above and that governments could not control what services different connectivity providers wanted to offer and that connectivity providers could not restrict or impact the performance customer access to legal services offered by third parties (except in a provider neutral way to protect their network). Same logic should apply to controlling local rights of way which the bill addresses only for video services providers.

The proposal does not address the Universal Service Fund, state or local taxes on broadband services or services provided over broadband , or wiretapping legal intercept (or other law enforcement needs) and any final bill will need to do so. But this is an interesting first step but I will say that the image of a giddy Verizon does something unpleasant to my stomach.

disclaimer: Even though being giddy at Harvard is not all that uncommon I know of no university view on the giddiness level of phone companies.