May 16, 2005

Recap: HB789 in the Senate

Wayne Caswell sent in a report from the HB789 hearings at the Senate Business and Commerce Committee on Monday:

I was at the Capitol to testify on Monday. Since I got a good feeling from the substitute bill, the committee itself, and other testimonies, I cut my prepared remarks considerably. Here's a recap from my perspective.

* Stark contrasts between the Senate and House committees.
While the House seemed to cater to big bells, the Senate was clearly trying to limit the power of monopolies and seemed far less influenced by the telecom lobby. The Senators even chastised SBC and Time Warner for their war of TV and print ads, asking readers to call their representative or congressman. One of them said the ads generated "zero calls" to his office, so "stop wasting your money on such foolishness."

* Senate version limited the scope of HB-789 to phone deregulation. They want to ensure that competition exists (4-5 competitors) before deregulating markets, which were characterized by size (under 30K lines, 30-100K lines, and >100K lines).

* Testimonies were shorter.
Chairman Troy Fraser effectively managed time limits for testimony since the room was only reserved until 11:00 am. He also stressed that the legislative session is near an end, so the number of changes would be limited.

* The Senate called for a very measured transition to deregulation, to be phased in over time as market competition is proven. Much of the responsibility for determining if competitive tests are met is placed on the PUC.

* USF decisions were postponed until after a PUC study is complete.

* Chairman Fraser held SBC to the fire when they asked for concessions, remembering the details of past SBC testimony when they agreed to the specific compromise. Fraser was almost hostile to SBC. Throughout the hearing, he and other Senators referred to "incumbent monopolies."

* Provisions limiting municipal networks were absent, as were provisions detailing rights-of-way, cable TV, and advanced information services over broadband. Adina already said that four people thanked the committee for removing the municipal network limits and no other testimony even mentioned municipal networks. That "should" make it more difficult to add it back as an amendment later.

* Adina Levin ( stressed that broadband is a growing necessity, that towns have varied objectives for broadband and need flexibility to use different technologies and business models, and that municipal projects charging a fee are almost all public/private partnerships - not cities competing with service providers. Even though the municipal network issue was removed from the substitute bill, these messages were important to cover so they aren't added later as amendments.

* AARP testified on behalf of consumers in general, saying that premature deregulation would let monopolies gain strength and that we need more competition, not more monopolies. "In absence of 'proven' competition, you should avoid deregulation." They described the FCC Triennial Review and recent telecom mergers (SBC/AT&T and Verizon/MCI) as anti-competitive.

* Snapper Carr (Texas Municipal League) strongly opposed HB-3179 (not in the substitute bill), saying cities are against state-wide cable franchise agreements. This was a surprise to Fraser, who seemed displeased that SBC and others may have misled him to think cities were supportive.

* Robert Wood (City Manager of Flatonia) echoed Carr's thanks for removing municipal obstacles and concerns about HB-3179.

* Wayne Caswell (CAZITech Consulting) stressed conservative constraint, praising the committee for avoiding a rush to legislation before completing a PUC study. Section 52.202 was cited as having useful language to enhance the PUC's "Scope of Competition" report and give the PUC the authority it needs to cover all telecom and information service markets and assess the impact on the big Bells, non-Bell CLECs, ISPs, cable companies, electric utilities, municipalities, equipment providers, citizens, and other stakeholders. 52.202 is not currently in the substitute bill.

* I added that, with better insight from the PUC study, legislators in future sessions could explore ways to safely deregulate all of telecom, beyond just phone service. This could be like deregulation of the electric industry, with a separation of retail services (phone, TV, music, email, Web browsing, etc.) from wholesale transport (cable, copper, fiber, powerline, wireless). "By all means, please allow public officials in local municipalities to treat transport as public infrastructure like roads, bridges, airports, water, and electricity."

--Wayne Caswell

Posted by alevin at May 16, 2005 08:05 PM