The move by local telephone companies to gain exclusive access to their broadband networks should be of great interest to people, as it will shape who controls access to the Internet and may very well effect the growth of the Internet generally. The proper path the government should follow is not away from allowing competition, but rather forcing all the players in broadband to allow competitors on their network.
The Tauzin-Dingell bill passed the House of Representatives on February 27, 2002. This bill is an attempt on the part of local telephone providers to repeal part of the Telecommunications Act of 1996, which forced them to open their broadband networks to competing Internet Service Providers. This rule allowed many different providers to operate on the same high-speed networks, to some extent driving down the price for consumers, but also restricting the ability of the local phone companies to recoup the huge capital expense of laying the fiber-optic lines. They have argued ceaselessly since 1996 that this is an unfair burden to place on them, and that it has made them loath to build more lines.
On the other side of the fight are consumer groups, who claim that the Tauzin-Dingell bill would give the local phone companies a virtual monopoly over broadband access, drawing up the United States into fiefdoms and allowing price gouging.
In a strange alliance, joining with consumer groups are long-distance phone companies, cable companies, and the ISP's that the law allowed to enter into the competitive field. All echo the arguments that allowing the local phone companies exclusive right to their networks would squelch competition and wreak havoc on the marketplace.
Both sides have lobbied Congress heavily, especially the thus-far victorious local telephone companies, who have poured tens of millions of dollars into campaign coffers. The fight is likely to drag on as long as the Congress can possibly drag it, so as to take these moneyed interests for as much as they can.
But as to the question of the favorable outcome, it seems to me that there are many dangers to allowing the Tauzin-Dingell bill's passage. Giving the local telephone companies' exclusive control over their networks is unlikely to spawn a new growth in bandwidth, as the country is already overwhelmed with millions of feet of dark cable and a supply hugely outstripping demand. It will likely drive many ISP's out of business, which may not be a huge loss in the short-term, since the local phone companies have found ways to damage their attractiveness to consumers through hidden fees and charges that the 1996 law permitted. In the long term, however, driving those companies out of business and giving the local companies a monopoly will force many locations to be at their mercy in terms of pricing. This could further restrict the already sluggish growth of consumer demand for high-speed access, retarding the Internet's growth by keeping the majority of consumers on dial-up connections that cannot handle video or high-quality audio.
If anything, I would argue that the laws forcing the local phone companies to open their networks do not go hard enough. As earlier mentioned, they have found many methods of circumventing the intent of the 1996 law, penalizing consumers for choosing one of the competing ISP's by charging them for things "included" with their service. The phone companies argue that the law is unfair in that it only force them, and not cable companies, to open their networks to competition. But this argument seems more persuasive for the extension of the Telecom Act to the cable companies, rather than exempting everyone. Some municipalities have responded to this with farther-reaching laws (such as that in Portland, OR and Fairfax, VA). The trend seems clearly against that, given the money has so far come far more from one side than the other, with potentially dire consequences if the Senate and President go along with it.
http://www.nytimes.com/2002/02/28/technology/ebusiness/28BROA.html
http://www.internetweek.com/story/INW20020228S0005
http://www.nytimes.com/2002/02/27/technology/27BROA.html
