Breaux-Nickles Would Provide Life-Line to the Economy

Today, Senators John Breaux (D-La.) and Don Nickles (R-Okla.) introduced the “Broadband Regulatory Parity Act of 2002” to eliminate the asymmetric regulation that has penalized investment and undermined competition in the high-speed Internet, or broadband, market. Currently, Digital Subscriber Line (DSL) technology is subjected to the same common carrier regulations as local telephone service, while cable modem service is essentially unregulated. Sens. Breaux and Nickles’ bill would level the playing field by relieving DSL providers of some of the most harmful regulations they currently face.

Erick Gustafson, Vice President of Federal and State Affairs, made the following statement:

“Although the economy surged by 5.8 percent in the first three months of this year, most of the growth came from a dramatic increase in government spending and a slowdown in inventory liquidation. Business investment – the key to the historic growth of the late 1990s – fell for a fifth consecutive quarter and consumption fell by two percent from the previous quarter. All is not well. Policymakers need to take positive steps to eliminate the disincentives that penalize investment and serve as an impediment to growth.

“Today, Sens. Breaux and Nickles introduced a bill to do precisely that. Their ‘Broadband Regulatory Parity Act of 2002’ would eliminate many of the regulations that have contributed to the 24-month high-tech depression. Ubiquitous broadband deployment would be a tonic for our economic ills, but companies will not commit private risk capital to such projects if they cannot profit from them.

“This bill would eliminate regulations that force incumbent telephone companies to socialize their assets and treat their broadband offerings similarly to those of cable companies. Cable broadband has a 2-1 edge in subscribers and is insulated from market pressure to improve and market its service. Incumbent phone companies have the cash flow and access to debt markets to invest in a new generation of services for consumers. All Congress has to do is get out of the way.

“With the obstructionist Fritz Hollings as Chairman of the Senate Commerce Committee, consumers should hold-off on popping the champagne just yet. But public pressure for broadband deployment and more sensible regulation has yet to reach a crescendo. Once it does, Chairman Hollings will have no choice but to act.”

To schedule and interview, please contact Marty Reiser at 202-942-7628.