Tauzin-Dingell Clearinghouse   Maryland Public Service Commission http://www.psc.state.md.us/psc/   April 30, 2001 The Honorable Benjamin L. Cardin United States House of Representatives 2267 Rayburn House Office Building Washington, D.C. 20515   Re: Tauzin-Dingell Bill: Internet Freedom and Broadband Deployment Act (H.R. 2420 in 106th Congress) Dear Representative Cardin: We are writing you regarding The Internet Freedom and Broadband Deployment Act of 2001, a bill which had a hearing before the House Energy and Commerce Committee Wednesday, April, 25. For the reasons specified below, we request that you vote against this legislation at this time. If enacted, the Tauzin-Dingell bill would: 1. Reopen the Telecommunications Act of 1996. 2. Allow all Bell Companies into the long distance data market without having to comply with the 14 point checklist outlined in Section 271. (Since 70% of traffic on the public switched network is now data and more than 80% soon will be , there may be little incentive left for the Bell Companies to open their local networks to competitors.) 3. Take away from the States and the Federal Communications Commission any authority to regulate rates or service quality for any high speed data service or Internet access service. 4. Allow Bell Companies to deny competitors access to any of the elements used to provide high speed data services. 5. Severely retard the development of competition in the local telecommunications market. Supporters of this bill have argued that unless the Bell Companies are freed from the restriction of the Telecommunications Act which bars them from carrying traffic across LATA boundaries until they open their own local markets to competition, many Americans, particularly those in rural areas, will be denied high speed internet access. In addition, a recent report from National Economic Research Associates (NERA) claims that if the companies must share their lines with competitors, they will have no incentive to put in the upgrades needed to provide high speed access, further impeding the deployment of high speed access to all Americans. The Bell Companies have claimed that if given interLATA relief, they will make high speed internet access available to all parts of the country, regardless of the level of demand for such service or the willingness of consumers to pay for it. These arguments imply 1) high speed internet access is not now available and will not be available unless the Bell Companies provide it; and 2) the Bell Companies will not be able to afford to provide this service unless they can get relief from the requirements of the 1996 Telecommunications Act. In response to the first assumption, Comptel and other industry representatives testified before Congress last year that there are over 1,000 high speed internet points of presence in the United States, with all but two LATAs in America having at least one. An analysis by the Competitive Broadband Coalition indicates that over 94% of all Americans are within 50 miles of a high speed point of presence. Much of this buildout has occurred over the past five years and continues today, so clearly competitors of the Bell Companies are deploying infrastructure to support high speed data networks. The second assumption is more difficult to refute. The cost of deploying the needed infrastructure to provide high speed internet access is high. However, the Bell Companies have had five years to open their networks and get approval to provide long distance service within their original service territories and for many reasons, have delayed doing so. But they have always been able to go into another Bell Company's service territory and provide long distance, competing with the incumbent LEC just like any other non-Bell Company. They have chosen not to do so. To reward the Bell Companies by allowing them to carry data across LATA boundaries without having to open up their "last mile" to competitors will undermine efforts to bring competition to the local market. Without the in-region interLATA market-opening incentive, the rational economic behavior of the Bell Companies will be to maintain their grip on their monopoly. Such a consequence will undermine the goal of the Tauzin-Dingell bill to extend high speed internet access to underserved areas. The primary factor stimulating deployment of high speed internet access has been competition. Scott Cleland, Managing Director of Legg Mason Precursor Group, stated in testimony before Congress last year that DSL rollout has been largely defensive to date, chasing cable into markets. More specifically, where there is competition, the Bell Companies have provided more high speed access services at lower prices than they have in those areas where there is little or no competition. The Maryland Public Service Commission desires the deployment of high speed access to all citizens, particularly in rural and low-density areas, of which Maryland has several. But if the Tauzin-Dingell bill is passed, the Bell Companies will have little incentive to open their networks to competitors. The result of less competition will be less innovation, less consumer choice and higher prices. For these reasons, we respectfully request that you not support this legislation. Sincerely, Catherine I. Riley, Chairman Claude M. Ligon, Commissioner Susanne Brogan, Commissioner J. Joseph Curran, III Commissioner Gail C. McDonald, Commissioner