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A Contest of Connections
Millions Spent to Influence Bill on High-Speed Internet Access


Broadband Deregulation

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By Juliet Eilperin
Washington Post Staff Writer
Wednesday, February 27, 2002; Page A08

Legislation headed to the House floor today that would redefine high-speed Internet access highlights a classic Washington paradox: Even a bill that might not make it into law can still have plenty of people willing to spend money on it.

The measure -- sponsored by Reps. W.J. "Billy" Tauzin (R-La.) and John D. Dingell (D-Mich.) -- has spawned one of the most expensive advertising and lobbying battles in recent years, pitting AT&T Corp. against the nation's regional Bell telephone companies. It would transform the way Americans access the Internet from their homes by making it easier for Bell companies to enter the high-speed broadband market.

Even some of the bill's proponents acknowledge that it faces an uphill battle in the Senate, where Commerce Committee Chairman and AT&T ally Ernest F. Hollings (D-S.C.) dismissed it this week as "blasphemy."

But that has not stemmed the tide of advertising, lobbying and campaign dollars from telecommunications companies eager to affect the House vote.

"These are huge stakes," acknowledged Tauzin, who chairs the House Energy and Commerce Committee. "These giants are just beating up on each other."

The two sides are competing over how consumers will get their high-speed Internet service. At the moment, only 10 percent of Americans have broadband access; roughly 68 percent of them receive it through cable television systems, some of which are owned by AT&T, while 28 percent use digital subscriber lines, known as DSL, provided by regional telephone companies.

The Tauzin-Dingell bill, which is expected to pass this week, is backed by the Baby Bells. It would encourage the regional phone companies to invest in DSL connections by freeing them from regulations that give competitors access to their local networks at wholesale prices. Without new incentives, the Bells argue, they have little reason to spend money on high-speed fiber-optic technologies that would reach more consumers.

"This is not a bill for the Baby Bells. It's a bill for competition," Dingell said in an interview this week. "There are a bunch of monopolists, would-be monopolists and parasites that would like to keep things as they are."

But the Bells' rivals argue that these companies are simply trying to rewrite the Telecommunications Act of 1996, which gave the Bells the right to offer long-distance telephone and data service once states determined they had provided adequate access to their local networks. Now they are less interested in providing long-distance phone service but eager to be free of burdensome regulations they say prevent them from competing with cable companies to provide broadband Internet service.

A powerful coalition has in fact formed against the bill, including not only AT&T but Sprint Corp., WorldCom Inc., Internet service providers and competitive local phone companies.Under the name "Voices for Choices," they have unleashed a radio and television advertising blitz aimed at lawmakers in both Washington and some House districts. According to industry sources, the campaign has cost more than $10 million so far.

Former Clinton deputy chief of staff Steve Ricchetti, who co-chairs the campaign, said it has "amplified the voices" of groups opposed to the legislation.

Ricchetti argued that while his side might be "outgunned" politically, it includes a "deeper, broader, more politically attractive coalition" of consumer groups and commissioners of state public utilities.

The Baby Bells have responded in kind, funding ads through the United States Telecom Association that suggest a shoe, a racecar and a cable giant "all play monopoly."

Even some of the biggest players have become weary of the race. "We thought there had been enough radio and television ads," said Herschel Abbott, vice president of governmental affairs for BellSouth Corp. But then last week the opposition "lighted up the air."

The two sides have also poured money into hiring lobbyists and funding candidates' campaigns. AT&T spent more than $3.8 million on lobbying during the first half of last year, according to federal records. SBC Communications Inc., one of the Bells, spent $3.6 million during the same period.

The companies have also showered lawmakers with donations. For the 2002 election, the four Baby Bells, along with AT&T, WorldCom and Sprint, have given House members more than $6.1 million, according to the Center for Responsive Politics, with nearly $3.6 million going to Republicans and almost $2.6 million going to Democrats. Home

© 2002 The Washington Post Company

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