By Kay Baily Hutchison
U.S. Senator from Texas
The first major step toward deregulating the nation's burgeoning telecommunications industry was taken March 23 when the Senate Commerce Committee overwhelmingly approved the draft Telecommunications Competition and Deregulation Act of 1995.
Standout provisions of this far-reaching telecommunications bill include the encouragement of competition in the local telephone market, allowing Bells into the long distance market, reducing price controls on cable television and ensuring the availability of affordable basic phone service for all - a policy the industry calls universal service.
For all segments of the communications industry - telephone, cable, broadcast, wireless and a variety of information services - the goal is to encourage competition.
From my perspective, this is a much better bill than last year's telecommunications deregulation effort, in particular because the voice of local government is represented.
During the two months of negotiations over the bill's specific provisions, I did everything I could to advance the interest of local governments in maintaining their authority over public rights-of-way. Among the issues addressed in this legislation is an important basic principal: That the public right-of-way is appropriately managed by local government, which has the responsibility for guarding the taxpayers' financial investment.
More than three million miles of roads, streets and highways in the United States come under state and local jurisdiction. Local and state taxpayers invest close to $28 billion a year in maintaining public rights-of-way and $15 billion annually on new acquisitions and construction.
When a telecommunications company digs up the streets, local governments have an obligation to their taxpayers to obtain compensation - at fair market value - in return for the use of public property. Those taxpayers and their local elected officials -not Washington - should decide how local public property is to be used.
Fair market value can be defined in a number of ways - as locally appropriate - including cash, franchise fees, in-kind services and capacity.
I am told that Texas has one of the fairest systems for managing rights-of-way. The state has made this possible by delegating right-of-way franchise authority to local governments. Currently, rights-of-way users are subject to rules based on historical agreements, technological requirements and regulatory distinctions. Such an approach made sense when each segment of the industry had a unique transmission technology, but advances in digital communications have resulted in voice, video and data technologies converging.
At the leading edge of the information revolution is video dialtone service, which makes it possible to convey video, audio and other data along two-way, high-capacity wires. The provisions which I added to the deregulation bill acknowledge that, given the emerging telecommunications technologies, public rights-of-way issues are no longer confined to digging up streets to lay lines.
As now written, the bill levels the playing field so that new entrants into telecommunications markets can negotiate fair compensation for using the public rights-of-way, just as the powerful incumbents have and will be able to do.
FRANCHISING AND LOCAL REGULATION
All too often, policymakers in Washington assume that franchising and local regulation of telecommunications are synonymous. They are not. They are two distinct issues. I do not favor increasing regulation in any form, but I do feel strongly that cities must have the flexibility in the negotiation process to obtain from carriers deals that are in the best interest of their local taxpayers, consumers and the variety of competitors.
The cities' compensation for rights-of-way, whether wireline or cable, is above all an issue of parity.
Provisions which I included in the measure specifically protect the authority of local governments to manage the public rights-of-way in a nondiscriminatory and competitively neutral manner, and to charge fair and reasonable compensation for doing so.
I put a great deal of effort into getting language included in the final bill that ensures local authority over the market. But cities must realize that if they discriminate between incumbents and competitors, they can be challenged in court.
Local authorities must guarantee fair access to the on-ramp of the information superhighway. Through negotiated uses of the public rights-of-way, cities can benefit from the new, increasingly competitive marketplace.
