[Congressional Record Volume 147, Number 92 (Thursday, June 28, 2001)]
[Senate]
[Pages S7093-S7095]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. BROWNBACK (for himself and Mr. Enzi):
  S. 1127. A bill to stimulate the deployment of advanced 
telecommunications services in rural areas, and for other purposes; to 
the Committee on Commerce, Science, and Transportation.
  Mr. BROWNBACK. Mr. President, next week our nation will celebrate 
Independence Day. Yet, as we celebrate the land of opportunity that is 
America, we must keep in mind those who, even in this great nation, do 
not have the same opportunities as everyone else. In rural communities 
across the nation, an entire segment of our population does not have 
the opportunity to access powerful broadband communications services 
representing the high-speed, high-capacity on-ramps to the information 
super highway. Why? Because for all intents and purposes broadband does 
not exist in most of rural America.
  Broadband is increasing the speeds and capacity with which consumers 
and businesses alike access the Internet, and opening up a whole new 
world of information, e-commerce, real-time high quality telemedicine, 
distance learning, and entertainment. The power of broadband will level 
the playing field between rural and urban communities in a global 
economy.
  Today I rise to introduce the Rural Broadband Deployment Act of 2001 
and the Broadband Deployment and Competition Enhancement Act of 2001. 
Two bills designed to ensure that all Americans have access to the 
advantages of broadband connections. I would like to thank my colleague 
from Wyoming, Senator Enzi, for his cosponsorship and support. These 
two bills, together or individually, will ensure broadband deployment 
in our nation's rural areas, and will enable us to renew our long-
standing commitment that rural communities have access to the same 
telecommunications resources as urban communities.
  My singular objective, in both bills, is high-speed Internet access 
for everybody in America by 2007.
  This is a bipartisan objective. The Democratic party has announced 
its intention to ensure universal access to broadband by the end of 
this decade. I commend my colleagues on the other side of the aisle for 
their recognition of the importance of broadband and I look forward to 
working with them to achieve our common goal.
  New approaches will be needed to achieve universal broadband 
availability. Some of my colleagues have introduced legislation 
consisting of tax incentives or loan subsidies. Programs such as these 
can help to deliver on the commitment to make broadband universally 
available, but these proposals alone will not achieve that goal. 
Deregulation has a key role to play in this effort.
  Deregulation has been the driver of broadband deployment to date: 
cable companies, largely deregulated by the 1996 Telecommunications 
Act, have invested almost 50 billion dollars in upgrades to their 
networks. These upgrades have in turn enabled them to deploy broadband, 
and cable companies now serve 70 percent of the broadband market. 
Satellite companies, also unregulated in the broadband market, are 
deploying one-way high-speed Internet access and are working to deploy 
two-way broadband services. Some companies are utilizing wireless cable 
licenses to deploy broadband, and they too are unregulated in the 
broadband market.

  Deregulation is a powerful motivator for the deployment of new 
technologies and services. Unregulated small cable companies, and all 
but unregulated rural and small telephone companies are taking 
advantage of their regulatory status to deliver broadband to rural 
consumers.
  The broadband market, distinct from the local telephone market, is 
new. Yet, federal and State regulators are placing local telephone 
competition regulations on broadband-specific facilities deployed by 
incumbent local exchange carriers, ILECs, the only regulated broadband 
service providers, as if they were part and parcel of their local 
telephone service. This is simply not the case. The local telephone 
market is not synonymous with the broadband market. The disparate 
regulatory treatment of phone companies deploying broadband and all 
other broadband service providers is serving to deny broadband to many 
rural communities.
  Broadband facilities being deployed by ILECs throughout our cities 
and towns require billions of dollars of capital investment in new 
infrastructure that must be added to the existing telephone network. 
The sparse populations of rural communities already diminish

[[Page S7094]]

the return on infrastructure investment so that, when combined with 
local telephone market regulations, ILEC broadband deployment has not 
proven to be cost effective.
  As a result, rural telephone exchanges owned by regulated telephone 
companies are not being upgraded for broadband services even while 
unregulated companies seem to be capable of making that substantial 
investment. In Wellington, Kansas, a rural community with around 10,000 
residents, a small unregulated cable company called Sumner Cable has 
deployed broadband service. Yet, Southwestern Bell, the local regulated 
telephone company and a Bell operating company, is not deploying 
broadband. Different regulatory treatments of these companies creates 
the incentive for one to deploy broadband, but not the other. This is 
being seen throughout our nation's rural communities, and is 
particularly disappointing. The Bell operating companies serve 
approximately 65 percent of rural telephone lines like those found in 
Wellington.
  Broadband is certainly being deployed at a much faster rate in urban 
markets than rural markets. But that does not mean all is well in our 
nation's cities. Today, broadband deployment in urban markets is being 
characterized by the market dominance of the cable TV industry, 
unregulated in the broadband market, which serves approximately 70 
percent of all broadband subscribers. This is good for consumers. Cable 
companies have taken full advantage of their deregulated status, and 
the inherent economic incentives, to deploy new technologies and 
provide new services to consumers. But while the cable industry 
finishes rebuilding its entire infrastructure with digital technology 
that permits it to offer broadband, ILECs are, in many instances, not 
making the same investment to rebuild their infrastructure.
  The Broadband Deployment and Competition Enhancement Act of 2001 
promotes broadband deployment in rural markets by requiring ILECs to 
deploy to all of their telephone exchange subscribers within 5 years. 
In exchange, ILEC broadband services are placed on a more level-playing 
field with their broadband competitors. This is achieved by 
deregulating only those new technologies added to the local telephone 
network that make broadband possible over telephone lines. By 
permitting ILECs to compete on a level playing field with their 
broadband competitors in their urban markets, we can create the proper 
balance between requirements and incentives.
  The limited deregulation in this legislation will not affect 
competition in the local telephone market. CLECs will still have access 
to the entire legacy telephone network to use as they see fit, and they 
will still be permitted to combine their own broadband equipment with 
the telephone network to compete in the broadband market. In those 
parts of the local telephone network where new network architecture 
must be deployed to make broadband possible, CLECs are free to add 
their own facilities to the network so they can compete for every 
potential broadband subscriber in a market.
  In Kansas, we have many farms and small rural communities. I grew up 
on a farm near Parker, Kansas. My hometown has 250 people. My singular 
goal in introducing this legislation is to facilitate rural broadband 
deployment. Given the importance of ensuring broadband is deployed in 
rural communities, I have elected to introduce two different bills on 
the same issue. I am willing to pursue either approach depending on 
which one will get us to the day of ubiquitous broadband.
  It seems clear that, no matter how worthy broad-based deregulation is 
in the broadband market, any such effort must navigate through the 
typical back and forth between the baby Bells, long distance companies, 
and now CLECs. If a more limited approach can avoid the traditional 
``phone wars'' then I am happy to put forth such an alternative.
  The Rural Broadband Deployment Act of 2001 is a more geographically 
limited approach to spurring broadband deployment. It includes broader 
deregulation of ILEC broadband services, but limits that deregulation 
only to rural communities. By ramping up the deregulation, yet 
restricting the size of the market where that deregulation is applied, 
it is my intention to create the same balance of requirements that I 
previously mentioned.
  I realize that introducing two pieces of legislation on the same 
issue on the same day is a bit unorthodox. But given the clear need and 
importance of universal broadband, I feel it is my duty to do anything 
I can to move this debate forward. Providing alternatives for the 
consideration of my colleagues is part of this process.
  I urge my colleagues to give consideration to either of these bills, 
and I urge your cosponsorship.
  Mr. ENZI. Mr. President, I rise as an original cosponsor of Senator 
Brownback's Broadband Deployment and Competition Enhancement Act of 
2001. I thank my colleague from Kansas for drafting this innovative 
legislation to help solve the problem of the lack of availability of 
advanced telecommunications services in rural areas.
  Telecommunications has come a long way from the days of the party 
line and operator assisted calls. Telecommunications services have 
allowed entrepreneurs to locate their business anywhere they can get a 
dial tone and have helped to bring jobs to rural America. I have been 
working to encourage more infrastructure development as a way of 
creating a business environment that will attract new jobs to the 
places that need them.
  The 20th Century has seen the economy of the United States and the 
world change from an industrial economy to an information economy. We 
are only at the beginning of the ``Information Revolution'' and now is 
the best time for private industry and government to take a pro-active 
role in helping to create the business and regulatory conditions 
necessary to encourage the widespread deployment of advanced 
telecommunications services.
  Since 1995, the State of Wyoming has been attempting to create a 
competitive local phone market that would have a multitude of 
competitors and result in lower rates. The cost of providing service in 
Wyoming is significantly higher than in other areas of the Nation due 
to our low population and long distances between towns. This has caused 
many companies to pass Wyoming by in search of easier profits in urban 
areas and leave many of our towns with only one choice for broadband 
service, if they have a provider at all.
  One of the reasons why advanced services have been slowly deployed is 
that Wyoming's wide open spaces make the telecommunications needs of 
our residents very different than people in urban areas. The economic 
model of the industry is to serve areas with a high population density 
in order to keep costs low. In the West, it's harder to make that model 
work, but the independent telephone companies, Qwest and the cable 
companies are working hard to offer their customers a full complement 
of services at a reasonable price, many services that urban telephone 
customers take for granted.
  High speed Internet access has been delayed for two reasons, cost and 
availability. Advanced telecommunications services can help to build 
Wyoming's economy. Companies are beginning to realize that our State 
has a ready work force and the lower costs of doing business are making 
companies choose Wyoming. Many existing businesses are taking advantage 
of the Internet to bring their products and services to the world. 
Where once a store was limited to only being able to serve those within 
driving distance of it, now it can bring Wyoming to the world. This 
cannot take place without the continued roll out of broadband business 
services.
  Wyoming has for many years been promoting the benefits of 
telecommuting. People living around the State have been able to connect 
to their office via computer and remain in contact with clients. 
Telecommuting now requires high speed access and that is available in 
some limited areas. In other areas, the only data access is via a 
regular dial-up modem. There are companies that are deploying digital 
subscriber lines and cable modems, but those locations are limited and 
the price is too high to be adopted by a majority of Wyoming residents. 
Over time that price will come down, but this is not a call for public 
subsidies or government mandates, but a call for more competition and 
deregulation. Competition will bring lower prices and

[[Page S7095]]

greater deployment of services to even the smallest of towns.
  That is why I am an original cosponsor of Senator Brownback's bill. 
His bill creates a deregulatory regime that is backed by specific 
performance requirements and strong enforcement provisions.
  The bill requires Incumbent Local Exchange Carriers, ILEC's, to be 
able to provide advanced services to all of its customers within 5 
years of the enactment of this legislation in order to receive the 
benefits of deregulation. This ensures that companies will bring 
advanced services and competition to rural areas by giving a hard 
deadline for companies to complete their build-out.
  Advanced services would be deregulated by exempting them from the 
requirements that ILECs make packet switching and fiber available to 
competitors at below cost rates. This would specifically deregulate the 
equipment that makes it possible to provide advanced services over 
traditional phone lines. The bill also exempts fiber optic lines owned 
by ILECs from below cost pricing if the fiber is deployed either to the 
home or in areas that never had telephone infrastructure before. I 
believe that this will be key to making the economics of rural advanced 
services more favorable for companies wanting to invest in rural 
broadband deployment.

  The bill would also give ILECs the necessary pricing flexibility for 
their broadband services. I believe that we should not hamstring a new 
technology in a very competitive marketplace with outdated regulations 
on price. It is important that Congress ensure that in addition to the 
wholesale pricing relief contained in this legislation, it also 
includes retail pricing flexibility to further make the economics more 
favorable.
  The bill does not change the requirements that ILECs allow 
competitors to collocate their equipment in an ILEC facility. 
Collocation is very important since it ensures that competitors have 
access to the network and do not have to build distant links or other 
connections to the ILEC network.
  The bill also does not eliminate the requirement that ILECs give 
competitors access to local loops. In fact, if an ILEC does not grant a 
competitor access to local lines the bill gives state regulators the 
right to strip the ILEC of the deregulatory benefits contained in the 
bill.
  The bill's enforcement provisions are very strong and explicit. If a 
company does not meet the build-out requirement, does not permit a 
competitor to collocate and/or grant competitors access to local loops, 
state regulators have the authority to return an ILEC to the old 
regulatory regime. Deregulation without proper enforcement mechanisms 
does not benefit consumers and competitors. It is important that we 
hold ILECs accountable if they are granted relief from the pricing 
requirements.
  I have been working with my colleagues to create a mix of 
deregulation and incentives to encourage private infrastructure 
development. Government cannot force private firms to make unprofitable 
investments, but government can work to make investments in rural 
infrastructure more favorable. The Broadband Deployment and Competition 
Investment Act helps to make investment in advanced services in rural 
areas possible.
  The great strides made by both Qwest, the smaller phone companies and 
the cooperatives show that rural areas can support fiber optic based 
services. The Wyoming Equality Network, the fiber based network linking 
all of Wyoming's high schools, has been a great advancement for 
education and I applaud the State's foresight for undertaking such a 
far reaching project. The WEN has had the added effect of showing other 
companies that it is possible to link rural areas with fiber, bringing 
high speed data services and other advanced services to homes and 
businesses.
  I am pleased to see that Qwest and several smaller companies have 
worked together to close the inter-office fiber loop, linking all local 
phone exchanges with a fiber optic connection. This will allow for 
greater capacity and new services like DSL and other high speed 
broadband services. This connection will help many areas of Wyoming 
overcome many of the service problems they have been experiencing for 
the last several years.
  The objective of telecommunications policy should be to bring as many 
players into the marketplace and allow them to compete in the 
marketplace. Congress should not tie a company's hands in a continually 
changing and competitive marketplace. We should ensure that all parties 
are on a level playing field and that all services are regulated in the 
same manner regardless of the company that is offering the service or 
the technology they are using. This legislation will help bring some 
needed consistancy to the regulation of advanced services and I urge my 
colleagues to support this vital legislation.
                                 ______