Senate Offers Sweeping Telecom Bill

Published June 1, 2006

A draft of a new Senate bill to overhaul U.S. telecommunications regulation received a mixed reception from advocates of a free-market approach to telecom policy.

The 135-page measure–the Communications, Consumer’s Choice, and Broadband Deployment Act of 2006–touches on almost every aspect of the policy debate. It is co-sponsored by Ted Stevens (R-AK) and Daniel Inouye (D-HI), chairman and ranking member, respectively, of the Senate Committee on Commerce, Science and Transportation. It is a loose companion to a draft bill introduced in the House by Reps. Joe Barton (R-TX) and Bobby Rush (D-IL).

Conservatives and libertarians looking for the government to take a lighter hand in regulation applauded the Stevens-Inouye bill’s approach to network neutrality. The bill does not demand broadband service providers treat equally all data that moves across their networks, leaving carriers the option to charge content providers for the cost of managing and optimizing the transmission and delivery of high-bandwidth services. The bill, however, requires the Federal Communications Commission (FCC) to issue annual reports on whether carriers are abusing their bottleneck position.

“Especially in light of the fact that presently there are no identified consumer harms that need remedying, this ‘study first, mandate later’ approach is much to be commended,” commented Randolph May, senior fellow and director of communications policy studies at the Progress & Freedom Foundation, in the think tank’s blog.

The bill’s provisions for video franchising reform also won high marks, although it stops short of creating a process for national video franchising as the Barton-Rush measure would do. Instead, the Stevens-Inouye bill would give the FCC administrative control of the process, but local franchising agencies would be parties to the deal. The FCC would create a single application form that would be used nationwide, and local agencies would have 30 days to approve franchise applications before a pro forma arrangement, set forth in the bill, kicks in. Critics pointed to a number or loopholes, however, that may allow local officials to unnecessarily delay the process.

The bill also calls on the FCC to explore changes in the Universal Service Fund (USF)–including new contribution schemes for carriers based on the number of phone numbers they have in service, as opposed to carrier revenues–but does not appear to seek any fundamental overhaul of USF administration.

The USF currently is funded largely through revenues collected from conventional wireline dial phone service, which have been declining steadily since 2000. The bill aims to extend USF collections to services that currently do not pay in, such as Voice over Internet Protocol (VoIP) and cable modems. At the same time, the bill expands the USF mandate to include subsidization of broadband in rural areas.

Other areas the bill covers include cable content agreements regarding sports coverage, municipal broadband, use of radio spectrum, digital television, and the role of service providers in preventing child pornography. It creates a grant program for local governments to explore interconnection of emergency communications systems. In a nod to the War on Terror, the bill asks the FCC to explore ways of reducing phone rates for Armed Forces personnel deployed overseas to call home.

Analysts on Capitol Hill give the bill, which attempts to synthesize elements of a number of other deregulatory measures proposed since September, a 50 percent chance of getting to a floor vote before the end of the session, noting the bill’s expansive scope may weigh it down in committee. If both Stevens-Inouye and Barton-Rush pass in their respective chambers, it is likely they will go to a Senate-House conference.

Steven Titch ([email protected]) is senior fellow for IT and telecom policy at The Heartland Institute and managing editor of IT&T News.