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WASHINGTON--After months of contentious debate, the House has passed, by a 273 to 157 vote, legislation that would permit regional Bell companies to offer nationwide high-speed Internet access without having to open their local telephone markets to competition.

The comfortable margin of victory for the bill on Wednesday belies a long and complex day of intrigue. During debate, the bill's proponents tried to repel potentially damaging amendments, and its opponents tried to kill the bill by returning it to committee.

The so-called Tauzin-Dingell bill, named for its authors, now faces a battle in the Senate in its quest to give the four "baby Bells" easier access to the lucrative broadband market. The proposed legislation is at the center of a multimillion-dollar, high-stakes battle between regional operating companies and competing local telcos and cable companies, which fear they will lose market share.

All parties have been lobbying hard on the issue. The Bell companies contributed $19 million to federal candidates and committees between 1999 and 2001, according to figures released by the Center for Responsive Politics. AT&T donated $8 million during the same time period.

Broadband Buying Power?

Animating this divisive battle is a debate over the nation's need for greater deployment of broadband Internet access. The bill's author, Rep. W.J. "Billy" Tauzin (R- Louisiana), and supporters like Rep. Robert Wexler (D- Florida) urge that widespread broadband deployment would give the technology industry and the country an economic boost. According to Tauzin, the legislation will make "the high-speed Internet available to consumers without the heavy hand of government."

The bill's co-author, Rep. John Dingell (D- Michigan) says that the measure could bring broadband to all areas, including traditionally underserved areas like inner cities and rural regions, within five years.

Critics of the bill, including Rep. Chris Cannon (R- Utah), say that Tauzin-Dingell bottles up competition for the baby Bells. It would squeeze the competitive exchange carriers, reducing customer choice, argues opponent Rep. Mike Rogers (R- Michigan).

Cannon and Rep. John Conyers (D- Michigan) had proposed an amendment to preserve existing Federal Communications Commission and state regulation over the Bell companies and require them to share infrastructure with competitors. Their move failed.

Opposition Revs Up

The bill passed with an amendment that increases the penalties and fines that the FCC could impose on phone companies for not providing adequate service. Another modification requires the Bell companies to transmit competing broadband services over their wires.

The bill must go to the Senate, where it is widely believed to have less support. Ernest Hollings (D- South Carolina), who chairs the Senate Commerce, Science and Transportation Committee, is an active opponent of the bill.

"I'm trying to get it killed," he says. "If Tauzin-Dingell passes, you'll have unregulated monopolies sanctioned by law. I'm worried about the lack of competition and the monopolistic behavior" of the incumbents that the bill would help, Hollings says. "I'm trying to break up the monopoly, Tauzin-Dingell wants to extend the monopoly," he says. "It's a total fraud that (the bill) will help broadband."

The United States does not need broadband legislation, in Hollings' opinion.

"There's no law against it. It's lack of demand, not lack of law permitting it" that is holding back broadband deployment, he says. Instead, the nation needs more competition to spur broadband adoption and incentives like tax credits. "If we had competition, you'd find (broadband) all over the place," Hollings says.

Debate Continues

But competitive issues shouldn't be the focus of the bill, in the view of telecommunication analyst Jeff Kagan, who believes that Tauzin-Dingell could help the U.S. economy recover from recession.

"I think the most important factor in the passage of this bill was not the consideration of the competitive advantages or disadvantages of either side of the argument, but rather the economic impact of the bill," he says in an electronic commentary distributed soon after the House vote. "The rapid rollout of broadband will encourage investment and increase employment and as such can play a big role in our economic recovery."

Kagan contends that broadband applications and services will blossom when developers have a greater number of potential customers. "The sooner we can create critical mass, the sooner we can make a market which will attract the developers to roll out the next generation of high-bandwidth applications," he says.

Nancy Weil and Cara Garretson of the IDG News Service contributed to this report.

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