Eight Reasons Why the Tauzin-Dingell Bill is BAD for America's Telephone Customers

SUMMARY:
"This bill gives the Bells more money, more power, less scrutiny, and even provides protection from investigations. The proposed bill would block competitors from using the networks, will raise customer Internet rates, and it doesn't address or fix any of the current DSL or competitor issues. Congress should not even consider this bill until the current problems, caused by the Bell companies, have been fixed." - Bruce Kushnick, Executive Director, NNI

1. The "Internet Freedom and Broadband Deployment Act." gives all the Freedoms to the Bells. The Bells are still monopolies. They control the wire into customer's homes and offices and because of this they control even competitive offerings of DSL, Broadband and other services. However:

• The bill prohibits the Federal Communications Commission (FCC) and the state commissions from regulating high-speed access,
• It stops the Bell from having to resell the services to competitors,
• It allows the phone companies into data long distance before there is local competition.

In short, this means that the Bell companies can block competitors from reselling the services, can enter into new business without any competitor safeguards, and the bill stops regulators from fixing anti-competitive practices.

2. The Bell companies are harming competitors, Internet Providers (ISPs) and Competitive Local phone companies CLECs), and this bill does nothing to fix those problems. Today, competition is on life-support in a large part because of the Bells.

• In surveys by the USISPA and CIX, ISPs stated that they were receiving sub-standard customer services - with over 50% of Bell installations having serious problems.
• In Kentucky, the Public Service Commission found that BellSouth was using discriminatory practices and predatory pricing against Iglou Internet, a small ISP.
• These problems are documented and are happening hourly, across America to thousands of competitive ISPs.

3. Harm to DSL Customers - Today, there is a DSL "Chain of Pain." Horror stories and lawsuits abound about the Bells' handling of current DSL. The claims include that the Bells' services are faulty, the advertised speeds rarely show up, and there are continuous problems. To read hundreds of complaints see http://www.newnetworks.com/alliance/signatures.php?view=1

4. History shows that the Bells already received massive financial incentives to roll out Broadband and failed to do so.

• Over half of America was supposed to have a fiber-optic line to their home and office by 2000, replacing the older copper wiring. Also, in many states, schools, libraries, and government agencies were also supposed to have very high-speed broadband - virtually none of these services exist.
• Over $53 billion dollars were collected to do these network upgrades - that's billions of extra pennies, nickels, dimes and quarters on customers' phone bills in the form of excess charges.

5. The Bells have become some of the richest companies in America through failing to deliver Broadband. This bill does nothing to curb the Bells excessive charges to customers.

• According to Business Week's Corporate Scoreboard, the Bell's profits are 200% above most American companies.
• Bell profits on some services, such as Call Waiting, is 48,000%, according to the Florida Commission.
• The Bell companies have taken massive write-offs of the copper networks, stating they were replacing them... but they are still in use.

6. This Bill is sponsored by representatives that seem to have serious conflict of interests with the Bell companies. NNI has called on Rep. Billy Tauzin, one of the bill's sponsors, and Chairman of the Commerce Committee, to recuse himself on regulating telecom.

• His current counsel to the Commerce Committee worked for Bell clients
• Many of his staffers have come to him from Bell/ telecom lobbying jobs.
• Tauzin has raised millions of dollars from the Bells through events he organized, for himself and for the GOP. Most recently, BellSouth and others Bells helped to sponsor Tauzin's Mardi Gras party at Dodger Stadium, cost: $400,000.

7. By eliminating competition, this bill destroys any hope of lower prices or better Broadband services, and it destroys a generation of new technology advances.

• Higher Prices to customers -- Without competition, there cannot be lower prices. By giving the Bell companies exclusive rights to the networks, they effectively shut down competition,
• By requesting that the FCC and states be left out of the plan, the Bells have carte blanche to continue customer harm,
• When the only choice is the Bell companies' inferior ADSL services, it will close out capital markets to innovators and competitors, and therefore, slow down, if not stop next generation services from reaching the markets,
• It can be argued that the entire economy would not have hit this recession snag had the Bell companies really delivered on their broadband promises. The tech sector would have kept designing more advanced products and services, and so the fall of companies like Lucent and Cisco, among others, would never have taken the market to new lows.

8. PUNCHLINE: What should happen next ---- Tauzin-Dingell is a bad bill and should not even be considered before the current broadband problems are addressed.

• Congress should be investigating how the Bells have continually failed to deliver on their other Broadband promises, and have cost the American public over $50 billion in extra phone charges,
• Congress should explain why Bell profits are 200% above most American companies,
• Congress needs to enact The Broadband Bill of Rights to fix DSL and competitive issues,
• Rep. Billy Tauzin, should recuse himself from regulating telecom.

For a decade, NNI has been doing telecom and broadband research in the Public Interest. To read more about Tauzin-Dingell (with links) see: http://newnetworks.com/TauzinDingellisevil.htm

To learn more about New Networks Institute, see: http://www.newnetworks.com