Copyright 2000 Federal News Service, Inc.
Federal News Service
July 18, 2000, Tuesday
SECTION: PREPARED TESTIMONY
LENGTH: 955 words
PREPARED TESTIMONY OF THE HONORABLE GLENN IVEY CHAIRMAN MARYLAND PUBLIC SERVICE
BEFORE THE HOUSE COMMITTEE ON THE
SUBJECT - H.R. 1685, THE "INTERNET GROWTH AND
DEVELOPMENT ACT" AND H.R. 1686, THE "INTERNET FREEDOM ACT"
Thank you for inviting me to testify
before the Committee today. My name is Glenn Ivey. I am Chairman of the Maryland
Public Service Commission and President of the Mid-Atlantic Conference of
Regulatory Utility Commissioners. I offer my testimony this morning on behalf of
the National Association of Regulatory Utility Commissioners ("NARUC"), which
strongly opposes H.R. 1686 and H.R. 2420.
Congress crafted the
Telecommunications Act of 1996 ("the Act") to promote competition, and thereby
to secure lower prices and the ubiquitous deployment of advanced technologies.
This was to be achieved by balancing the rights and responsibilities of ILECs
and CLECs considering relative strengths, economic costs and proper incentives.
Unfortunately, the pending legislation would undermine that balance and extend
the ILEC's monopoly powers under the guise of accelerating broadband
deployment. Passage of H.R. 1686 and H.R. 2420 would jeopardize the
ability of states to open local markets to competition and advance the goals of
the Act. H.R. 1686 and H.R. 2420 would allow ILECs to transport data across
local access and transport areas, or LATA, boundaries immediately. In essence,
ILECs would become long distance carriers of data, something they cannot
currently do under the Act until they meet the Section 271 requirements to open
their local markets to competition. If the Bell companies were allowed to
transport long distance data traffic without first having to comply with the
Section 271 checklist, state commissions and the FCC would lose the primary tool
for promoting local telephone competition.
Circumventing the incentives
that Congress put in place would derail ongoing efforts to bring advanced
services to local markets. States currently in the midst of arbitrating market
entry disputes regarding advanced services could be required to revisit
previously resolved issues. This legislation would give the ILECs a competitive
advantage in broadband deployment without providing in return
any demonstrable gains in local competition. Furthermore, history has shown that
major shifts in telecommunications policy lead to contentious, multi-forum
litigation in the courts, before the state commissions and before the FCC.
Data now accounts for more than 80% of the traffic on the public network
and is projected to account for as much as 90% in three to five years. H.R. 1686
and H.R. 2420 would prohibit both the FCC and the states from promoting the
deployment of high-speed data services. Until a recent FCC order became
effective, competitors were unable to utilize line-sharing, and therefore had to
use a separate line to provide DSL services. This hindered access to broadband
services by artificially raising the prices for these services.
the rationale for the legislation may have been to extend broadband services to
underserved areas, this legislation could actually undermine that goal. The
primary factor stimulating deployment of broadband infrastructure is
competition. In those areas where competition exists, the Bell companies have
provided more broadband services at lower prices than where there is little or
no competition. For example, SBC reduced its DSL price by more than 40%,
including Internet access service, in response to competitive pressures.
Similarly, Bell Atlantic reduced the price of its Infospeed service by
approximately 20% in response to increased competition from cable companies and
In addition, there are increasing numbers of
companies who are willing and able to provide data services. These companies
have already begun to establish the facilities to provide these services. For
example, in Maryland, like most states, broadband services are proliferating. To
date, we have authorized over 100 competitive carriers, half of which are
facility-based and many of which provide broadband services. Nationally, we have
experienced a 50% increase in DSL lines in the first three months of this year
alone. So clearly we are moving in the right direction. Yet residential markets
are not experiencing robust local competition. Competition is still too nascent
to abandon the pro-competitive elements of the Act.
Finally, I am also
troubled by the legislation's provisions that would replace the Telecom Act with
the Sherman Act as the means for prohibiting anti-competitive activities by
ILECs. At this point, legislative changes to the current legal and regulatory
structure would exacerbate an already litigious relationship between ILECs and
their potential competitors. Since litigation has been a central factor in
delaying full implementation of the Telecom Act, and because antitrust
litigation is extremely expensive and protracted, it seems clear that a shifting
emphasis to the Sherman Act would delay rather than hasten broadband
I have attached to my testimony NARUC's resolution
opposing legislation like H.R. 1686 and H.R. 2420. This resolution was passed
unanimously by the NARUC Telecommunications Committee in March of this year. I
have also attached a May 11, 2000 letter to Chairman Hyde sent by, among others,
NARUC President Bob Rowe and Telecommunications Chair Joan Smith. This letter
also explains our reasons for opposing H.R. 1686.
We share the
Committee's desire to deploy broadband services to all areas. We simply ask that
you address broadband deployment in a competitively and
technologically neutral way not by removing the Bell's incentives to open their
local markets. This legislation is harmful to the development of local
competition and could actually delay the deployment of broadband services.
Therefore, we urge you to oppose the passage of H.R. 1686 or H.R. 2420.
LOAD-DATE: July 20, 2000