Let the games begin

After considerable discussion as to whether telecom reform would happen this year, a lesser known force in telecom circles--Sen. John Ensign (R-Nev.)--has introduced a bill that, with one major exception, is a comprehensive overhaul of existing telecom law. The speed with which the former Bell companies responded positively to Ensign's Broadband Investment and Consumer Choice Act was a strong indication that they got much of what they wanted, including the right to offer video services without getting a local franchise. The cable industry added its applause to the provision, which would eliminate all current franchise agreements.

Ensign does offer protection for basic narrowband voice services, requiring the incumbent carriers to resell their local loops and their narrowband services until at least 2011, and it does prohibit companies from blocking access to competitive voice-over-IP services. But beyond that, Ensign's measure largely counts on a competitive market to make sure consumers have a choice of services.

Stock prices of incumbent carriers originally rose on the news, although they didn't sustain the gain. Wall Street is likely to respond much more positively if BICCA is passed in its current form, on the expectation that the "I" in BICCA will represent significant investment.

What's much less likely is positive response from local and state officials, who are already expressing shock over the degree to which the Ensign bill would take away their current authority over service providers. The new rules under which municipalities can build their own networks are also being called unworkable and onerous, and the growing support of community broadband networks by many within the tech community will turn up the heat on that provision. Even one of the bill's co-sponsors, Sen. John McCain (R-Ariz.), differs with Ensign on the muni net restrictions.

All of this sets up a likely fight on multiple fronts, which could be enough to delay action on this version of reform. Still to be tackled is universal service, which Sen. Ted Stevens (R-AL) has indicated he is taking on.

Factor in two new commissioners on the FCC--now rumored to be White House adviser Richard Russell and Tennessee regulator Deborah Tate--and the coming months hold a great deal of promise, excitement and uncertainty for telecom.

E-mail me at cwilson3@primediabusiness.com.