With the U.S. House of Representatives poised to consider the controversial Tauzin-Dingell bill next week, two telecommunications economists have released a "blueprint for economic and broadband growth" and are urging congressman to defeat the legislation.
Entitled "Promoting Broadband Investment and Avoiding Monopoly", the paper -- written by Robert Hall of Stanford and William Lehr of Columbia -- lays out evidence it claims shows why the market-opening provisions in the 1996 Telecommunications Act have "dramatically" spurred investment into local phone service.
Tauzin-Dingell would revise the Telecom Act to allow the Baby Bells -- Verizon (Quote), BellSouth (Quote), SBC (Quote) and Qwest (Quote) -- to offer broadband Internet access over their existing long-distance lines without requiring them to open their local lines to outside competition.
As a result, the bill, known officially as H.R. 1542, "The Internet Freedom and Broadband Bill," and introduced in 1998 by the House Energy and Commerce Committee's chairman W. J. "Billy" Tauzin (R-La.) and ranking Democrat John Dingell (D-Mich.) would drastically alter the competitive landscape of broadband providers.
The paper notes that regulatory initiatives like the Tauzin-Dingell bill would "irreparably undercut" competitive phone and broadband providers. It concludes, "Both in the short term and longer term, prospects for investment in broadband infrastructure and services are best served if we retain the pro-competitive provisions of the Telecom Act."
Hall is a senior fellow at the Hoover Institution and professor in the Stanford economics department. His research considers the performance of the U.S. economy, including its capital and labor markets. He has a particular interest in the role of new technology, such as the Internet. He is a frequent contributor to discussions of national economic policy, including monetary policy, fiscal policy, and competition policy.
"Your choice is stark: You will either continue the beneficial open market policies of current law -- or return us to the days of one-company control over telephone services and the last-mile infrastructure that connects our homes to the information highways we depend on," Hall states.
Lehr is an associate research scholar in the Graduate School of Business at Columbia University and a research associate and the associate director of the Research Program on Internet and Telecoms Convergence at the Massachusetts Institute of Technology. Lehr's research focuses on the industry economics and regulation of the Internet and telecommunications industries. He is a frequent speaker and research contributor on policy and economic issues associated with these industries.
"This is an extraordinarily sensitive time in the development of local phone and broadband competition," said Lehr. "The destructive enormity of the Tauzin-Dingell bill simply cannot be ignored or explained away."
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