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WASHINGTON -- Deregulation of broadband services got another nudge this week, but it's not clear whether the proposal has enough time or support to become reality soon.

Still, plenty of parties are clamoring for action. The Federal Communications Commission is expected to decide this year whether large telephone companies must give broadband providers access to their networks. No fewer than a dozen broadband expansion and deregulation bills are pending in Congress. And this week, President George W. Bush hinted of his support for deregulating high-speed Internet access--but the specifics were confined to urging progress.

"The Federal Communications Commission is focusing on policies to encourage high-speed Internet service for every home and every business in America," Bush said, speaking at an economic forum in Texas. "The private sector will deploy broadband. But government at all levels should remove hurdles that slow the pace of deployment."

Bush made similar remarks in June, in both instances falling short of explicitly endorsing deregulation. A Bush spokesperson would not elaborate on his newest statements, saying the president's statement was "very clear." The FCC had little comment on Bush's remarks. A representative repeated FCC Chair Michael Powell's stance that broadband deployment is key to economic development.

Balancing Act

The president appears to be signaling support for a deregulatory approach, says Matthew Davis, director of broadband access technologies at The Yankee Group, a communications research and analysis firm.

Bush is in a precarious position, because the issue pits large network operators, like Verizon and SBC Ameritech, against long-distance providers like AT&T and Sprint, Davis says. With such large players on both sides of the issue, "it doesn't surprise me that he's [Bush is] treading lightly," he adds.

But Dave Burstein, editor of trade magazine DSL Prime, says technology companies are clamoring just as much as the telecom companies.

Burstein says Bush's comments were effectively meaningless. "Everybody's got different agendas and Bush decided to say, 'Yes, I'm in favor of them all,'" he says. Burstein says that Bush's pledge "to bring the promise of broadband technology to millions of Americans" was met a year ago.

Frank Dzubeck, chief executive officer of telecom analysis firm Communications Network Architects, says he doesn't think Bush's statements indicate any policy change. The comments are in concert with Bush's past remarks and FCC Chair Powell's position.

"I don't think there's any waffling," says Dzubeck. Since the president doesn't have the power to change broadband laws, he doesn't have to weigh in on the issue, he adds.

Contenders Jockey

The FCC is expected to rule this year on network access requirements. Under the 1996 Telecommunications Act, large telcos must provide network access to broadband providers (and competitors). At stake is the competitive market for DSL service, based on phone lines. DSL currently makes up almost one-third of the broadband market, according to the FCC.

Earlier this year, the commission ruled that cable companies, the other major provider of broadband services, were not subject to the requirement. While cable services are more prominent for residential users, DSL service dominates in the business market. The FCC says that cable services have almost twice as much market penetration as DSL.

Dzubeck says the FCC's decision will have limited effect on the broadband market because a host of other issues--such as price-setting for residential copper wires--are to be resolved. "The FCC can sort of perfume the situation, but they can't change the rules," Dzubeck says.

Even if Bush isn't singing the deregulation gospel, his voice joins a chorus of legislators trying to encourage broadband development. Still, the FCC is likely to take action first, because most legislation is stalled, say analysts Dzubeck and Davis.

Broadband just isn't as glamorous as other issues, Dzubeck says. Still, Congress must ultimately change the "flawed" 1996 Telecom Act if it wants to truly deregulate broadband, he adds.

Bushel of Bills

The whir of congressional activity centers on the Senate Commerce, Science, and Transportation Committee, which is considering myriad bills as the session ends.

The committee has already had two hearings on the House-approved Tauzin-Dingell bill. That measure is designed to deregulate the major regional telephone companies for broadband services. It's also considering the Breaux-Nickles bill, which would deregulate DSL service, and legislation from Senator Ernest Hollings (D-North Carolina) to encourage rural broadband deployment.

Also pending is a measure urging universal broadband access from Senator Joe Lieberman (D-Connecticut). Two bills from Senator Sam Brownback (R-Kansas) urge deregulation and better rural access. And one bill urging sweeping deregulation of broadband services was introduced just before recess by Senator John McCain (R-Arizona), the ranking Republican on the committee.

It's too early to say if any of these bills will receive special attention once the Senate reconvenes in September, says Andy Davis, spokesperson for the Commerce, Senate, and Transportation Committee.

Battle Continues

Discussion is heated. Consumer groups and Internet service providers argue that deregulating broadband will kill competition and cripple innovation. The major network owners contend deregulation is needed to allow them to compete against cable providers.

Deregulating broadband "is very much in the public interest," says Robert Crandall, a senior fellow with the Brookings Institution, a Washington, D.C., think tank. Crandall, who has consulted for the major phone companies, says that the current competition required by the 1996 law is artificial and isn't stimulating any new services.

Yankee Group's Davis agrees that deregulating the industry will ultimately foster more broadband competition between cable and DSL providers. That assertion is typically refuted by consumer and ISP groups, which argue the scenario will instead lead to a duopoly, because the two services currently target separate markets.

But Burstein says DSL providers will improve their networks no matter what, because they can't afford to lose business to cable operators.

"Regulation has nothing to do with what's going on," he says. If the network owners are deregulated, they will be able to "raise your rates and give you lousy slow service."

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