2006 telecom bill rewrite tramples local governments

By Jeff Arnold
Deputy Legislative Director

The Senate Commerce CommitteeÊhas approved its version of the 2006 telecommunications rewrite, which would have significant implications for counties and other local governments. The original Senate bill, S. 2686, was adopted as an amendment to H.R. 5252, the House version of the bill, so for future reference the House bill number will be used.

The Senate bill under consideration by the committee contained a number "manager’s amendments" – improvements – which local government associations were able to negotiate with the committee’s majority staff. These amendments improved what was a very bad bill for local governments to one that might possibly be saved with additional amendments. Unfortunately, the committee chose to reject the additional amendments, and also to adopt others that made the bill worse.

One amendment the committee rejected would have precluded new video service providers, like AT&T, from cherry-picking neighborhoods in a region. The amendment would have required new entrants to offer video services to all neighborhoods in a region.

But the good news is that since the amendment was defeated by unexpectedly close margin – a 12–10 vote – it is very likely the issue will resurface when the underlying telecommunications measure reaches the Senate floor. All Democrats except Sen. Ben Nelson of Nebraska voted for the video "build-out" amendment. All Republicans except Sen. Olympia Snowe of Maine voted against it. The large telecommunications companies opposed the language.

The build-out amendment would have required newcomers to deploy video services in phases. The obligation would have begun as soon as a new entrant offered video service to 15 percent of a given franchise area.

Once the company met that threshold, it would have had to offer service to an additional 20 percent of homes every two years until all households were reached. Many Republican senators objected that build-out rules would deter competitive entry by telecom companies.

Taxes

Sen. John McCain, (R-Ariz.), introduced an amendment imposing a three-year moratorium on any new "discriminatory" state or local wireless telephone taxes. NACo made clear its opposition to this amendment, but it was adopted 21–1.

Sen. George Allen (R-Va.) offered an amendment to permanently extend the moratorium on Internet taxes, the Internet Tax Freedom Act, now set to expire in November 2007. State and local associations vigorously opposed the amendment. NACo wrote a strongly worded letter to the Commerce Committee opposing the amendment, but the amendment was adopted by a 19–3 vote.

Network neutrality

The committee narrowly rejected strict "network neutrality" provisions, dealing a grave setback to companies like eBay, Google and Amazon that had made enacting them a top political priority this year. By an 11Ð11 tie, the committee failed to approve a Democrat-backed amendment that would have ensured equal treatment for all Internet traffic no matter what its "source" or "destination" might be. The House, in its version of the bill, definitively rejected the concept in a 269Ð152 vote on June 8.

Supporters of the concept had rallied behind an amendment which would have barred network operators from discriminating "in the carriage and treatment of Internet traffic based on the source, destination or ownership of such traffic."

The "network neutrality" concept means that all Internet sites must be treated equally. It has led to a political rift between big Internet companies and telecom companies that oppose what they view as onerous new federal rules. All the Republican committee members except Snowe voted against the more regulatory net-neutrality amendment. All the Democrats voted for it. The amendment was sponsored by Snowe and Sen. Byron Dorgan, (D-N.D.).

By a 12–10 vote, senators rejected an amendment, proposed by Hawaii Democrat Daniel Inouye, which would have been a complete substitute for the video franchising title and would have covered network neutrality.

Net neutrality will be revisited if the bill reaches the Senate floor, because Sen. Ron Wyden (D-Ore.) has already put a "hold" on the bill, and has vowed to do everything possible to assure it is included in a final package.

The committee voted 15–7 to report the broader telecommunications bill — called the Advanced Telecommunications and Opportunity Reform (ATOR) — to the full Senate for a vote. Sen. Ted Stevens (R-Alaska), in interviews with telecommunications press, said that the Senate leadership is not prepared to bring the bill to the floor until Stevens can assure them he has at least 60 votes for the bill — the number necessary to avoid a filibuster.

With the controversy over net neutrality, and the opposition of state and local governments, it is virtually impossible for Stevens to make such assurances. In any case, it is unlikely that the bill will be considered prior to the August recess. Stevens said he would consider a "stripped down" bill in September if he cannot garner sufficient votes for the reported measure.