Broadband Deregulation Urged

WASHINGTON - Sen. John McCain (R-AZ) has called for sweeping broadband deregulation, introducing one of the most expansive such bills to date.

The "Consumer Broadband Deregulation Act" (S.2863) essentially orders the government out of the growing market for residential high-speed Internet access, leaving the market to regulate itself.

"By ensuring the market, not government, regulates the deployment of broadband services, the legislation will promote investment and innovation in broadband facilities--and all consumers will benefit," McCain says. He introduced the measure late on Thursday, just before the Senate recessed until September.

Open Market

Specifically, McCain's bill would end or phase out rules in the 1996 Telecommunications Act that require telecommunications network operators to give network access to competitors. Deregulation supporters claim those requirements are slowing broadband growth and stifling competition, which they argue would thrive without the rules.

"It has been six years since the passage of the Act, but consumers have yet to benefit," McCain says. "Competition denied by excessive regulation is costly to consumers."

To boost broadband usage, McCain's bill prevents the government from regulating retail broadband prices. Also, incumbent network owners would no longer have to share fiber optic cables with newcomers.

In what McCain calls the most "difficult" provision of his bill, ISPs wouldn't get guaranteed access to existing high-speed networks after a five-year period. However, McCain indicates he might be willing to compromise on this point. "To the extent that market forces prove incapable of preventing restrictions on consumers' use of the Internet ... we may need to consider a different approach," he says.

Fight Expected

McCain's proposals are sure to anger some opponents of deregulation. They argue that big companies are shutting out competitors even under existing regulations.

"The consumer gets screwed if you deregulate these guys. They don't compete," says Mark Cooper, research director for the Consumer Federation of America, a consumer advocacy group.

In July, Cooper's group joined with ISPs to attack the FCC's pro-deregulation leanings. The legislation echoes the wishes of Federal Communications Commission Chairman Mike Powell, Cooper notes. "But it's not good public policy," he adds.

The FCC is currently reviewing broadband regulations imposed by the 1996 act. On Tuesday, Powell asked lawmakers to soften regulations in the name of promoting broadband adoption.

Like Minds

McCain's legislation joins a growing list of broadband bills. The Tauzin-Dingell bill, passed by the House, is designed to deregulate the activities of "baby Bells" in the broadband market. Originating in the Senate are the Breaux-Nickles bill, which deregulates only DSL, and broadband promotion legislation by Sen. Ernest Hollings (D-SC).

McCain's bill is not designed as a companion piece to any other existing proposal, according to a Republican committee aide. It will be considered by the Senate's Commerce, Science and Transportation Committee.

But given the variety of other broadband legislation, McCain's proposal faces difficulty getting passed in the few weeks remaining in this year's congressional session.

McCain says his legislation "takes a different approach" from past attempts. "It takes a comprehensive look at the proper role of the government with respect to these new services," he says.

Other Provisions

The McCain bill also:

-- prohibits states from charging exorbitant "right-of-way" charges for providers to establish services in their region;

-- creates a clearinghouse of broadband deployment data, aimed at encouraging broadband growth in rural communities;

-- increases the fines the FCC can levy on those who violate its rules;

-- directs the FCC to study what role the government should play in the development of wireless technology;

-- and orders a study of how the government can promote broadband through its own electronic services.

The bill specifically targets residential broadband and not services provided for businesses, because the conditions of business broadband differ from residential concerns, McCain says.

"This does not reflect my lack of support for a similarly deregulatory approach to the business market," he adds.