- The Washington Times - Wednesday, March 9, 2005

Behind Congress’ top priorities for the year — Social Security occupying the highest ground — is reforming the outdated 1996 Telecommunications Act. For years Congress has known that the act has not kept up with technology and market changes. But with industry loyalties and state-versus-federal power wrangling getting in the way, every reform attempt foundered. About the only thing the competing congressional factions agreed on was that something needed to be done. Recent industry developments, however, as well as the uncertain future of the Federal Communications Commission, have dramatically altered a political climate long deadlocked on reform.

Although decried by consumer advocates, the announcements that SBC Communications had bought AT&T; (a longtime but diminishing player on the Hill) and Verizon had acquired MCI have opened up one of the first real opportunities. Since 2000, for example, SBC and other Bell giants like Verizon have been pushing for the elimination of a provision in the telecom act that prohibited them from offering long-distance service until they opened up their regional phone markets. As a long-distance provider, naturally AT&T; fought tooth and nail to oppose this, even while its market value continued to decline. Now, with AT&T; out of the game, industry insiders are looking keenly on longtime AT&T; Republican loyalists to join with their conservative peers to support deregulation.

To appreciate the lobbying battle that preceded the buyouts — and why the Bells are so giddy now — from 1999 to 2004 SBC contributed $8.6 million to congressional members, with 59 percent going to Republicans, according to the nonpartisan Center for Responsive Politics. Conversely, during the same period, AT&T; gave $8.4 million to Congress, 56 percent to Republicans. Meanwhile, Verizon contributed $8.2 million, 56 percent to Republicans, while MCI gave 55 percent of its contribution of $3.3 million to Republicans. To say the least, it has been an all-out tug-of-war between the phone companies for congressional Republicans.

At the FCC, outgoing Chairman Michael Powell defined his term by advocating a free-market philosophy. Still, even Mr. Powell hesitated when it came to telecom reform.

Mr. Powell’s most-likely successor, Commissioner Kevin Martin, while a Republican with a free-market outlook, has angered conservatives in the past. In 2003, he sided with the Democrats on the commission by voting to continue regulations that forced the Bells to make their networks available to competitors at government-set prices. Depending on who’s manning the controls, the FCC can be a powerful force for change.

Despite the gridlock, it’s impressive how far the telecom industry has advanced since 1996. Consumers now have options that were unthinkable 10 years ago. But more needs to be done on the federal front. With major political obstacles now removed, it’s up to Congress to get to the business of reform.

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