HR 1542 — Telecom Disaster in the Making

Leaving government seems to have made Bill Kennard, the former chairman of the Federal Communications Commission, more willing — or at least able — to speak his mind. Witness his extraordinary comments at this week’s Vortex conference here.

The first speaker of the day, Tom Noll, had praised a bill now before Congress. HR 1542, which would give the local phone monopolies the right to build broadband services to the home but not require them to provide access to competitors.

The last mile is not a free market, and it never has been, Kennard said. It has been a monopoly, protected by government. And to think we can just deregulate and make everything fine is “folly” — witness the problems the competitive local exchange carriers (CLECs) have faced as the inumbent carriers (ILECs) have thrown up roadblock after roadblock to genuine competition.

The local phone companies “are taking advantage of a down makret for CLECs to say it’s a failed business model, and the only way you’ll get broadband deployed is if you let us do it,” Kennard said, calling HR 1542 a “very, very misguided” piece of legislation.

Happily, Kennard and other telecom experts here don’t think this bill will end up passing Congress, at least not this year. I’m not so optimistic, because the phone monopolies are getting support from some powerful backers, including Intel and others that are willing to do anything to spur broadband deployment, even risk a new and more dangerous monopoly.

Look for more updates during the conference.


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