McCain Introduces Broadband Internet Access Bill

(May 15, 1999) Sen. John McCain introduced the Internet Regulatory Freedom Act on Thursday, May 13. This is the fourth bill to be introduced in Congress in the last three weeks which is intended to spur the deployment of high speed Internet access by phone companies by reducing the regulatory burdens placed on them by the Telecom Act of 1996.

Sen. John McCain (R-AZ), who is also the Chairman of the Senate Commerce Committee, introduced Senate Bill 1043 IS, titled the Internet Regulatory Freedom Act, on May 13. Like bills introduced recently by Sen. Sam Brownback (R-KS), Rep. Rick Boucher (D-VA), and Rep. Bob Goodlatte (R-VA), the McCain bill seeks to motivate the incumbent local exchange carriers (such as SBC, Bell Atlantic, and U S West) to invest in ADSL technology by relieving them of certain regulatory burdens imposed on them under Section 251 of the Telecommunications Act of 1996.

"Our nation's local telephone company lines go to almost every home in America, and local telephone companies are ready and willing to upgrade them to provide advanced high-speed data service," said Sen. McCain in a statement published in the Congressional Record on May 13.

Sen. McCain

"They are ready and willing, but they are not able --at least, not as fully able as the cable companies are. That's because the local telephone companies operate under unique legal and regulatory restrictions. These restrictions are designed to limit their power in the local voice telephone market, but they are mistakenly being applied to the entirely different advanced data market. And as a result, their ability to build out these networks and offer these services is significantly circumscribed."

"Advanced telecommunications is a critical component of our economic and social well-being. Information technology now accounts for over one-third of our economic growth," said Sen. McCain. "What this means is simple: Americans with access to high-speed Internet service will get the best of what the Internet has to offer in the way of on-line commerce, advanced interactive educational services, telemedicine, telecommuting, and video-on-demand. But what it also means is that Americans who don't have access to high-speed Internet service won't enjoy these same advantages."

Presently, the activities of the incumbent local exchange carriers (or ILECs) are limited by the Telecommunications Act of 1996, and regulated by the Federal Communications Commission (FCC). Under Section 251 of the 1996 Act, as interpreted by the FCC, ILECs must sell or make available their broadband access services to their competitors. The ILECs argue that this takes away the economic incentive to make the huge investments that are necessary to deploy broadband ADSL service.

The McCain bill, like those recently introduced by other legislators, provides relief from Section 251. S 1043 IS provides that ILECs which develop "advanced services" (such as ADSL) are not required to provide their competitors access to their "facilities and equipment used exclusively to provide Internet services."

Sen. McCain and the other sponsors and cosponsors of related bills all represent rural and Western areas where almost all businesses and households have basic telephone service, but where cable access lags behind that in large urban areas.

"If this situation is allowed to continue, many Americans who live in remote areas or who don't make a lot of money won't get high-speed Internet service anywhere near as fast as others will," said Sen. McCain. "And, given how critical high-speed data service is becoming to virtually every segment of our everyday lives, creating advanced Internet ‘haves' and ‘have nots' will perpetuate the very social inequalities that our laws otherwise seek to eliminate."

Sen. McCain's proposal is supported by ILECs.

Sol Trujillo, the President of U S West, testified before Sen. McCain's Commerce Committee on April 13. He asserted that "regulation and unequal treatment of industry players is widening the Digital Divide, redlining millions of small and medium sized businesses, rural areas, inner cities and government and educational institutions. Large businesses have reaped the benefits of hyper-competition among telecommunications providers, but the benefits of those services have stopped there."

Trujillo, whose company's service territory includes Sen. McCain's state of Arizona, argued that "Congress should act to lift the regulatory restrictions that have created disincentives for telecommunications providers to deploy high-speed services more widely. These regulations have their roots in the early 80s and were designed to regulate long-distance voice calls. Now, they are applied -- inappropriately and harmfully -- to data."

Bell Atlantic praised McCain in a statement released on Friday, May 14. "Bell Atlantic applauds Sen. McCain for his vision and leadership on this issue. This act will keep the Internet regulation-free, which will encourage companies like Bell Atlantic to continue to invest in advanced high-speed networks and services that benefit all consumers. We urge the Senate to act on this measure quickly so that consumers can rest assured that they will be better served in the future, with more choices and greater competition for Internet services.

Bell South also commended Sen. McCain. David Markey, VP for Government Affairs stated on May 14 that "this legislation would give local phone companies the freedom to compete effectively as we build advanced networks. We support the efforts of Sen. McCain."