- The Washington Times - Tuesday, February 20, 2001

Go to the web site of the U.S. House of Representatives (www.house.gov), click on "Member Offices" and then find "Billy Tauzin." Click again and the web site of the new chairman of the broad and powerful House Committee on Energy and Commerce comes up.

There's a bold italic headline that says, "Je suis fier de representer le troisieme district de la Louisiane," above a picture of this proud Louisiana representative in camouflage hunting gear, standing in a boat and holding up two huge fish (to my untutored eye, they look like tarpon). Meet Billy Tauzin.

He is the latest in a long line of Louisiana politicians to gain national prominence. Mr. Tauzin, however, took a circuitous route. He was first a Democrat, then switched. He claims to be the only member of Congress ever to serve in the leadership of both parties.

Mr. Tauzin's basic instincts on public policy are good. He is a free market zealot. But sometimes his enthusiasm sends him off into remote bayous.

In 1999, Mr. Tauzin became concerned about the lagging dissemination of high-speed broadband Internet services to consumers and small businesses. The Telecommunications Act of 1996 signed into law five years ago this month had promised better and cheaper telecommunications through competition and choice. But on broadband, at least, it has not delivered.

Again, Mr. Tauzin was right on the problem; but again, I think he was wrong on the solution.

Mr. Tauzin introduced a bill called the Internet Freedom and Broadband Deployment Act that would allow the Regional Bell Operating Companies, or RBOCs the local monopoly phone companies created from the breakup of AT&T; in 1984 to get into the long-distance data services (that is, broadband) business immediately.

For a supporter of the original 1996 law, it was an inexplicable try at a solution.

On Feb. 12, at a panel discussion held in the Cannon Caucus Room on Capitol Hill, I asked Mr. Tauzin about his bill, called H.R. 2420. The format of the session, sponsored by a new group called TechIssues.net, was that each of us seven panelists five civilians plus Mr. Tauzin and Rep. Silvestre Reyes, a Democrat from Texas could make a three-minute statement. Then the five could each ask a question of one or both of the two members. My own statement decried the slow rollout of broadband but argued that "gutting the act is no solution neither, by the way, is instant deregulation, as so many contend."

The 1996 law, I said, was based on an important idea that the way to deregulate telecommunications was to give the local Bells, which control the "last mile" into the homes of just about every American, a big incentive. They could get into the already deregulated long-distance business as soon as they opened up their local networks to competition. They were required to allow interconnection with their systems and sell local service wholesale to competitors at reasonable rates.

But the Bells dragged their feet. Competitors were burdened with high wholesale costs and a lack of cooperation. Many are now going out of business. Meanwhile, as wireless and long-distances prices have plummeted, local-service prices have risen 10 percent since 1996.

"Incredibly," I said, "some in Congress [led by my friend Mr. Tauzin] want to get rid of the only incentive the Bells have to open up to competition the lure of being able to get into the long-distance business. Bills have been introduced [including H.R. 2420] that would let the Bells into the data part of long-distance (now the largest and very profitable part) immediately in order to spread broadband. "In other words, Tauzin wants to remove the carrot." When my time came to question him, I asked how such a change in the law could possibly inspire the Bells to open up their local connections. Why would they give up the stranglehold on local service if they could get straight into data?

Mr. Tauzin answered that voice long-distance remained an incentive. Really? Has he looked at the stock prices of long-distance companies lately? The competition is fierce, and voice is dropping sharply as a proportion of total long-distance service. He also said that the 1996 act was intended to deal with voice, not data, since broadband was in its infancy. Really? Then, why not call it the "Voice Act of 1996." The truth is that nothing in the law excludes broadband from the interconnection requirement. The advent of data simply provides a stronger incentive for the Bells to open up.

I also raised the issue of "remonopolization" the original seven Bells plus GTE, eight companies holding local monopolies, are now down to just four. This was the last thing Congress wanted when it passed the Telecom Act. Legislators expected more competition, not less.

Mr. Tauzin, in his response, was sympathetic. He had quoted earlier from my article, "For Whom The Bells Toll: Death Of Telecom Competition" in The Washington Times. And he said now that he would "insist that remonopolizing does not happen." But H.R. 2420 would enhance the power of the four firms. Just read the statement on his site about his "Internet Freedom" legislation: "H.R. 2420 frees the Regional Bell Operating Companies (RBOCs) to 'build out' and offer high speed Internet data and backbone hub services on a level playing field in competition with cable companies and current backbone providers. Do the cable and backbone companies want that to happen? Of course not! It's competition."

Mr. Tauzin, though well-meaning, has it exactly backwards. His bill would freeze local monopolies in place and allow the Bells to leverage their hold on the last mile into dominance in broadband as well. As the discussion ended last Monday, I had the impression that Mr. Tauzin, a thoughtful guy, was beginning to have doubts about his own approach. I hope so. As I said in the Cannon Caucus Room, the authors of the Telecom Act had a great idea. The reason it is not working is that the act simply hasn't been enforced. Why reject it without trying it?

James K. Glassman is the host of TechCentralStation.com

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