Communications Politics 102

Posted: 11/2000

Communications Politics 102

Tis the season for political contemplation. With that in mind I thought I
might try a little tutelage called Communications Politics 102. For this purpose
I will don my old "flea-bitten-inside-the-beltway" jacket and get down
and dirty with the truth, the whole truth and nothing but the truth, at least as
the communications pundits would have us believe.

I will not begin by reiterating the clichi about it "all being about
money." We learned that in Communications Politics 101.

I would only add that according to the press and Federal Election Commission
(www.fec.gov) reports I have seen, we seem on
course to break all previous records for political donations from within our
industry this year. The stakes are high, and apparently that message is hitting
home. Which brings us to HR 2420, the Internet Freedom and Broadband Deployment
Act of 1999, and its sisters and its cousins and its aunts who reside elsewhere
in the federal legislative domain.

These are bills that would free the remaining BOCs from any restrictions
regarding the delivery of interLATA data services. Critics contest that in a
communications world that is moving rapidly from analog to digital, this would
effectively remove current limitations on the BOCs to offer any interLATA
service until they open their local markets to competition.

At last count there were only two of the 50 states where the BOCs had
accomplished this current requirement. If true, this would all but end the grand
experiment for introducing competition into this industry as envisioned by the
1996 Communications Act, but then that is a small price to pay in the interest
of progress. Progress for three or four companies, that is.

The great congressional proponents of this bill are Rep. Billy Tauzin, R-La.,
and Rep. John Dingell, D-Mich. That is a pretty powerful combination as one or
the other may well end up being the Chairman of the House Commerce Committee.

Last time I looked, the bill had garnered at least 219 co-sponsors–enough to
pass the full House. From firsthand accounts it appears that Tauzin has been
particularly relentless in his pursuit of co-sponsors for the bill. One member
described it to me as "arm twisting in the great tradition of Sam
Rayburn."

Why would Tauzin put so much time and energy into an effort, which
realistically had no chance of going anywhere this year?

According to many industry experts, the reason may have to do with the issue
of who gains ultimate control of the Commerce Committee. Tauzin has a potential
challenger in Mike Oxley, a long-time Republican member of the committee from
Ohio. Tauzin has a slight problem in that, until a few years ago, he was a
Democrat. He was among those conservative Democrats who changed parties when the
Republicans took control of the House in 1996.

In fact, then-Speaker Newt Gingrich agreed to preserve Tauzin’s seniority if
he would switch parties to strengthen the slim majority the Republicans had.
With current Commerce Committee Chairman Tom Bliley retiring, Tauzin stands
ready to collect his reward after being a Republican in name for only a few
years!

That doesn’t sit too well with Oxley, who has been a Republican all his life
and has served on the committee since the early ’80s. But Gingrich made a
promise, and promises must be kept.

Except Gingrich is gone! Does that mean that his successors have to honor the
commitment? In the world of Congressional Politics the answer is, "I’m not
sure" which further translates into, "What have you done for me
lately?"

If one were to pick the half-dozen strongest BOC advocates in the House, it
would be hard to end up without Texas Representatives Dick Armey and Tom DeLay,
as well as Speaker of the House Dennis Hastert, R-Ill. By the way, they happen
to hold the three top leadership positions in the House.

Throughout the years, SBC Communications Inc. (www.sbc.com),
GTE Communications (now Verizon Communications, www.verizon.com)
and the other BOCs, through their officers, employees and consultants, have
poured an enormous amount of corporate and personal money into causes and
campaigns favored by the two Texas congressmen. Also, it is commonly known in
Washington that one of Hastert’s closest friends has been the effective,
long-time BellSouth Corp. (www.bellsouth.com)
lobbyist Dan Mattoon, who is off the BellSouth payroll and is serving as the
Deputy Chairman of the National Republican Congressional Campaign Committee.

Do we think that perchance, over the years these individuals or corporations
have made known their legislative desires to these Representatives? Possibly,
yes. If there were a way for Tauzin to further endear himself to Armey, DeLay
and Hastert, would it help his chances of becoming the next Commerce Committee
Chairman? Possibly, yes. Well, now you have the other theory.

Many observers believe that even if Tauzin or Dingell were to become the next
Commerce Committee Chair, the bill would still never become law. Because, as
currently constituted, there would be many influential people in the Senate
opposed to the bill.

Most observers feel that it would be opposed strongly by the three
longest-serving members of this committee, Ted Stevens, R-Alaska; Dan Inouye,
D-Hawaii; and Fritz Hollings, D-S.C.

Stevens and Inouye are from noncontiguous states and have never had to dance
to the BOCs’ beat. Hollings just plain dislikes them.

These three gentlemen could kill it outright. Stevens, by the way is
scheduled to become the next Chairman of the Commerce Committee in 2002. If this
weren’t enough, proponents also would face the daunting task of gaining support
from Tom Daschle, the Senate Democratic leader, who is not a BOC sympathizer and
Trent Lott, the Senate Republican leader who would have the difficult task of
explaining any support he rendered to the bill to local corporate hero WorldCom
Inc. (www.wcom.com).

The whole thing reminds me of 1976 when AT&T Corp.(www.att.com),
under the leadership of John DeButts, made one last attempt to legislate its
monopoly by unleashing its massive lobbying power behind a bill entitled
"The Communications Consumer Reform Act of 1976." That piece of
legislation eventually garnered hundreds of House co-sponsors. When it reached
the Senate, it was dead on arrival.

Nonetheless, many Bell lobbyists toasted each other this summer as they
passed the magic number of co-sponsors necessary to "ensure" passage.
Presumably, visions of big bonuses flashed through their minds. Imagine the
year-end report–"so-and-so got 15 members of Congress to sign on as
co-sponsors of HR 2420." All it took was a few campaign donations, and a
little glad-handing on the rubber turkey circuit to earn the eternal thanks of
their management.

Passage or not, the bill served its purposes. Short range it kept political
heat on the FCC (www.fcc.gov) to pass those
Section 271 applications. Secondly, it endeared many members of Congress to the
deep-pocketed BOCs that have been responding with nice political donations.

So let’s cut to the chase. Assuming the readers of this magazine are
advocates of open and competitive markets, what should we be thinking as we
ponder these elections? Since most people vote according to their personal
politics rather than their business politics, perhaps it doesn’t matter. For the
sake of argument, let’s suppose it does.

In Congress the only real question is who will control the House, where the
Republicans now have a razor-thin margin. Assuming you get the Republicans, you
will have a solid lineup of pro-BOC congressmen in most of the relevant
leadership positions. That seems certain.

If the Democrats take the House, you are likely to see a strong BOC advocate
in Dingell assuming the key committee chairmanship. However, you may also see Ed
Markey, D-Mass., long a supporter of the competitors, assuming the chairmanship
of the Telecommunications Subcommittee.

What about the other end of Pennsylvania Avenue? With Al Gore you pretty much
know what you are going to get. If you like the positions that have been taken
by the Antitrust Division of the U.S. Department of Justice (www.usdoj.gov)
and by the FCC during the past eight years, then you probably know that Gore’s
fingerprints are all over these policies.

Communications is one of the two or three substantive policy areas that
Clinton has ceded to Gore and his minions since assuming office.

George W. Bush is an open book. You can certainly look at the work of the
people he appointed to the Texas Public Utilities Commission (www.puc.state.tx.us).
While it has its critics, there are those who believe that they have done a fair
job in coming to a conclusion with the SBC 271 application, and that the process
has gone more smoothly in Texas than it has in New York.

On the other hand, somebody named Mike Pettit, reportedly a campaign adviser
to Bush, showed up at the Progress and Freedom Foundation’s Aspen Summit 2000
Aspen Institute this summer to partake in some savaging of the FCC for its
policies on unbundled loop prices, Bell company restrictions and the like.
According to press reports, he was quoted as saying that if the Republicans took
charge "there would be some changes."

What does this mean? Well, there were no details available. Why should there
be? Keep it vague and keep them guessing.

Ernie Kelly is president of the Association of Communications Enterprises
(ASCENT, www.ascent.org). He can be reached
at +1 202 835 9898.

ROUNDTABLE

On whether the FCC (www.fcc.gov) should
regulate telecom competition in multitenant buildings …"I seriously
question the need for the commission to regulate the real estate industry."

–Rep. Ellen O. Tauscher, D-Calif.

"Setting aside the policy ramifications, I was troubled to learn that
the [FCC] would even consider extending its regulatory oversight to buildings,
which have never before been subject to its jurisdiction. Congress never
intended that building owners, and their properties, be subject to the
commission’s jurisdiction when it passed the Telecommunications Act of
1996."

–Rep. Thomas C. Sawyer, D-Ohio

"It’s an issue that goes across the board, hitting all carriers."

–Tiki Gaugler, telecom attorney, ALTS (www.alts.org)

"The Telecommunications Act of 1996 gave consumers–not landlords–the
power to choose their local provider. We now call upon the FCC to … adopt
nondiscriminatory building access requirements to give all Americans a choice
when selecting their local communications provider."

–Tom Cohen, spokesman, Smart Buildings Policy Project (www.buildingconnections.org)