EFF Staff summary of House Committee markup of HR 3636 and 3626

[David Farber <farber () central cis upenn edu>]

Date: Wed, 23 Mar 1994 11:56:19 -0500
From: mba () eff org (Mary Beth Arnett)


        The House Energy and Commerce Committee marked up two major
telecommunications bills last week.  The Committee approved HR 3636, the
National Communications Competition and Information Infrastructure Act of
1993, cosponsored by Reps. Markey (D-Mass.) and Fields (R-Tex.), and HR
3626, the Antitrust Reform Act of 1993, cosponsored by Reps. Brooks
(D-Tex.) and Dingell (D-Mich.).  The House Judiciary Committee, which also
has jurisdiction over HR 3626, approved the bill in a different version.
The House Rules Committee will decide which provisions from the two
different versions of HR 3626 to allow on the floor.  Floor votes on HR
3626 and 3636 may be scheduled as early as late April.


        Both bills are designed to provide more opportunity for competition
in long-distance telephone, cable television, and cellular communication
services.  HR 3636 would allow cable and telephone companies to compete in
each other's lines of business.  HR 3626 is a major antitrust reform
measure and would allow the regional Bell telephone companies, known as
Baby Bells, to offer long-distance services.


HR 3636


        HR 3636 proposes a major restructuring of the Communications Act of
1934 to account for changes in technology, market structure, and people's
increasing needs for advanced telecommunications services.  HR 3636
includes EFF's Open Platform provisions and supports an open, accessible
network with a true diversity of information sources.  Open Platform
service is designed to give residential subscribers affordable access to
voice, data, and video digital telephone service on a switched, end-to-end
basis.  Open Platform service would provide residential and business
customers access to a variety of applications on the information highway,
including distance learning, telemedicine, telecommuting, the Internet, and
many more.  HR 3636 directs the FCC to investigate the policy changes
needed to make Open Platform service widely available at reasonable rates.


        The bill promotes the entry of telephone companies into video cable
service and seeks to benefit customers by spurring competition in the cable
television industry.  Telephone companies that want to provide video
programming would be required to provide video services through a "video
platform," which would be open to all bona fide requests from other video
programming providers.  The markup bill substitutes a contract carriage
regime for the original bill's common carriage regime by dropping the
original bill's requirement that 75% of a telephone company's video
platform channels must be reserved for competitors.  Instead, the markup
bill would require that video platforms have a suitable margin of capacity
to meet reasonable growth in demand.  To promote local competition in
telecommunications services, the bill requires that local telephone
companies open their networks to competitors who wish to interconnect with
the public switched telephone network.  The bill also would establish a
Joint Federal-State Board (made up of FCC members and state regulators) to
devise a framework for ensuring continued universal service.  The Board
would be required to define the services encompassed within a telephone
company's universal service obligation and to promote access to advanced
telecommunications technology.


        Several amendments were approved during markup of HR 3636 to
address a myriad of issues.  Some of these amendments are designed to
facilitate the deployment of advanced telecommunications services.  For
example, Rep. Boucher's (D-Va.) amendment would accelerate FCC approval of
common carrier facilities' applications to provide video dialtone services
under section 214 of the Communications Act.  Rep. Swift's (D-Wash.)
amendment would require telephone companies to provide at-cost preferential
rates to noncommercial and governmental entities for advanced, non-video
platform services.  Rep. Schaefer's (R-Colo.) amendment would prohibit the
imposition of fees on new telecommunications providers that are not imposed
on existing service providers.


        Other amendments address common carrier rate regulation.  Rep.
Tauzin (D-La.) sponsored an amendment requiring that a common carrier with
more than 1.8 million access lines be "subject to alternative or price
regulation, and not cost-based rate of return regulation," when it has
implemented equal access, openness, and accessibility provisions.  Another
Tauzin amendment would allow broadcasters to use spectrum for ancillary
services and provides that the FCC would collect fees generated from any
broadcasts made using advanced services.  Rep. Wyden (D-Ore.) sponsored an
amendment requiring that telephone rate increases for residential customers
who opt out of advanced telecommunications services must be implemented
over a period of 5 years if they are more than an inflation adjustment.  To
address cross-subsidy and franchising requirements, Rep. Synar (D-Okla.)
sponsored a ban on cross-subsidies between regulated telephone service and
competitive telecommunications, information, and video services.  In
addition, Rep. Fields' (R-Tex.) amendment would preempt state and local
governments' ability to extend their franchising authority over cable
television providers to cover any telecommunications services offered by
cable television operators.


HR 3626


        This bill would phase out the limitations placed on the Baby Bells
under the modified consent decree that resulted in the antitrust agreement
that broke up AT&T in 1982 (the "MFJ" or "Modification of Final Judgment").
 The MFJ currently precludes Baby Bells from providing long distance
service and manufacturing telephone equipment.  Until two years ago, the
Bell Companies were precluded from electronic publishing.


        The bill gives the Attorney General and the FCC the authority to
make a public interest determination before a Baby Bell could offer
competitive long distance services.  The bill requires the Attorney General
to make a finding that there is no substantial possibility that the Baby
Bell or its affiliates could use monopoly power, for example by preventing
access to networks or using profits earned, to impede competition in the
market it seeks to enter.  HR 3626 also would lift MFJ restrictions and
allow Baby Bells to engage in manufacturing telephone equipment, electronic
publishing, and burglar alarm services.


          Two different versions of HR 3626 emerged from the Energy and
Commerce Committee, chaired by Rep. Dingell, and the Judiciary Committee,
chaired by Rep. Brooks.  The two Committee chairs had previously reached a
compromise on the conditions under which Baby Bells should be allowed into
interstate resale and intrastate service.  However, the Judiciary
Committee's version would tighten the requirements for Baby Bells to enter
intrastate long distance and interstate resale.


        Rep. Dingell's bill would allow Baby Bells to provide incidental
services across the LATA boundaries that currently divide their regions.
An amendment sponsored by Rep. Markey would list privacy requirements for
common carriers and require the FCC to study the impact of converging
technologies on consumer privacy.  Rep. Markey also introduced an amendment
to expand the definition of electronic publishing.


        An amendment to both HR 3636 and 3626 would authorize additional
FCC appropriations as necessary to carry out the acts and their amendments.




Mary Beth Arnett
Staff Counsel
Electronic Frontier Foundation
1001 G Street, NW
Suite 950 East
Washington, DC  20001
(202) 347-5400  VOICE
(202) 393-5509  FAX