Regulatory parity, state pre-emption hot Senate topics

Telecom policy again was at the forefront this week before the U.S. Senate Commerce Committee, which continues to conduct hearings in preparation for next year's expected rewrite of at least a portion of the Telecom Act.

Wednesday's five-member panel featured representatives of large, medium and small incumbent carriers, as well as a large cable operator and a large independent Internet service provider. All five said Congress does not need to add new rules if it chooses to revisit the Telecom Act; instead, lawmakers should focus on clarifying or eliminating many existing rules contained in the law.

Noticeably absent from the table were any CLEC representatives, which may explain why four of the five panelists expressed support for pre-emption of state commissions' regulatory authority as all communications become more interstate in nature.

Here's a snapshot of the panelists' comments:

* Verizon CEO Ivan Seidenberg: His top legislative priority would be to dismantle the unbundled network element (UNE) regime that forces RBOCs to share their networks with competitors at below-cost rates. Said wireline investments do not yield a rate of return in many states and maintaining current laws would result in a "slow death" of the industry. "U.S. telecom policy is broken and must be fixed," he said.

* Comcast CEO Brian Roberts: If Congress has a choice between regulating cable and deregulating ILECs, Roberts would prefer the latter. He believes cable operators' $85 billion in network investments during the last eight years proves that is good public policy. Wants voice-over-IP legislation to be passed that would provide certainty for that nascent technology. When asked about cable's deregulatory advantages when compared to telcos, Roberts noted that MSOs don't own their chief competition (satellite) while ILECs dominate the wireless market.

* Alltel CEO Scott Ford: His company is not as big as Verizon, but many of his opinions were similar to Seidenberg's, noting that his company would continue to invest in the deregulated wireless industry instead of the regulated wireline industry until the rules change. His top priority was regulatory parity, noting that 85% of a cable competitor's broadband price advantage was attributable to telecom taxes.

* Earthlink CEO Garry Betty: His primary goal is to ensure open access to ILEC networks for independent Internet service providers such as his company. While many are pushing to deregulate telcos to encourage broadband deployment, he cautioned that the wording of such laws could force customers to use their service provider as their ISP.

* Former Central Texas Telephone Cooperative CEO Delbert Wilson: Representing the rural-centric National Telecommunications Cooperative Association, Wilson was the only panelist that asked that state commissions remain part of the regulatory future. Like many rural-carrier representatives, Wilson expressed concern about reports of a push for bill-and-keep accounting. Maintaining rate-of-return revenues and finding a way to sustain universal-service support are critical, he said.

Meanwhile, there are increasing reports indicate that VoIP legislation might be considered before the November elections, instead of after. Stay tuned.

E-mail me at djackson@primediabusiness.com.