January 14, 2003
Members will discuss telecommunications competition, and examine local competition and broadband proceedings pending at the Federal Communications Commission.
Senator Fritz Hollings
Click here for a PDF version of Senator Holling's testimony.Today, we hear from the five FCC Commissioners who are faced with several pending proceedings that could radically revamp the future of the telecommunications industry. Competition is finally taking root across America. Millions of Americans are signing up for cheaper local phone service offered by competitors and the Bells dropping their rates as much as 30 percent. The Bells have received 271 approval in 35 states. They should be applauded. My BellSouth deserves particular praise, as they are the first to have achieved compliance throughout its region. Verizon is close behind and is already the 3rd biggest provider of long distance services. As competition begins to flourish, however, the cries of the Bells grow louder. Their current strategy is to focus on two orders under consideration by the FCC that could cap competition in the telecommunications industry at the very time it is beginning to take hold. Take residential phone service for example. In almost 40 states, the state PUCs, with their local expertise, have set the terms by which the Bells must sell elements of their networks to competitors, who have signed up millions of local phone customers. Now, the FCC wants to take away some of those elements. While the Act permits this when evidence shows these elements are no longer necessary, that determination is best made by local experts on a market-by-market basis - not by those with offices overlooking the Southeast freeway. According to last week's Wall Street Journal, the FCC may make a national determination that some of the Bells' unbundled network elements are no longer necessary. Another Journal article urged consumers to sign up now for competitors' service before the FCC takes it away. This makes no sense. The PUCs are who the FCC listens to before approving a Bell for 271. This has happened 35 times. The PUCs examine the economics and data to set rates for the Bells' network elements. The Supreme Court upheld this framework. Similarly, the PUCs should determine, or greatly influence when a Bell no longer has to provide an element to competitors at a discount in a particular market. Turning to broadband, the FCC is poised to create a monopoly in the small and medium business market and a duopoly in the residential market by classifying broadband as an information service. What does this mean? Without reasonable access under Section 251 to the Bell network for broadband, you can forget about competitors. They will just close up shop. This is not what the Telecommunications Act intended. The preamble aspired about new telecommunications technologies. The words "data" or "the Internet" or "advanced services" were mentioned in the hearings, in the bills, and on the floor over 400 times. And the Act hinged on competitors having access to the Bell network on just, reasonable, and non-discriminatory rates, whether that network carried a phone conversation, a dial-up internet service, or high speed data. This wasn't some hidden provision, some secret bargain reached in the dark of night. This was Section 251. That was how competition was going to develop. If a regulation was too stringent, the statute allowed forbearance to ease restrictions if that would be in the public interest. And now, despite that measured process, the FCC is considering radically revising the rules of the game. All in the name of broadband and parity. This could also eliminate the possibility that universal service could ever support broadband, cut off access for disabled Americans to broadband services, and thwart law enforcement access to high speed communications in a time of terror – all of which Congress intended to maintain in a high speed world. Chairman Powell testified in front of our Appropriations subcommittee hearing last March and stated that the FCC's fundamental mission was to implement the Communications Act, as amended. He was right. And yet this month, I read in the Washington Post that one of those amendments, specifically the 1996 Telecommunications Act, was an "experiment" according to Chairman Powell. This experiment is finally beginning to work for American consumers, by reducing at long last, the price of local phone service and providing meaningful choice. We look forward to your testimony.
Honorable Michael K. Powell
Click here for a PDF version of Mr. Powell's testimony.
Honorable Kathleen Q. Abernathy
Click here for a PDF version of Ms. Abernathy's testimony.
The Honorable Kevin J. MartinChairmanFederal Communications Commission
Click here for a PDF version of Mr. Martin's testimony.
Honorable Michael J. CoppsCommissionerFederal Communications Commission
Click here for a PDF version of Mr. Copps's testimony.