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from: National Journal - Technology Daily

Bid To Pre-Empt State Laws Draws Controversy For Senate Telecom Bill

By Drew Clark

(Tuesday, June 20) Democrats are deeply troubled by a last-minute attempt to pre-empt state law under the latest draft of Senate telecommunications legislation authored by Senate Commerce Chairman Ted Stevens, R-Alaska.

Particularly controversial is the proposed pre-emption of state regulations on the wireless industry, which has stoked anger and brought a new set of adversaries to the table against the bill. The National Association of Regulatory Utility Commissions is lobbying against the change.

But many Republicans endorse wireless pre-emptions, and it is not clear that a planned amendment to strike the pre-emption will succeed when the Commerce Committee votes on the bill this Thursday. The pre-emption language was not included in the House-passed telecom bill, H.R. 5252, or in two prior bills drafted by Stevens, R-Alaska.

"The competitive national marketplace has proven that it can meet consumer needs far more effectively than can state government regulation," said Joe Farren, a spokesman for the wireless association CTIA.

Senate Commerce ranking member Daniel Inouye, D-Hawaii, said Monday that the language in the latest draft "calls into question" the Democrats' willingness to cooperate in passage of telecom legislation.

"Not only did the third draft not address the core concerns, but it made changes in some of the consumer protections" important to Democrats, Inouye spokesman Andy Davis said Tuesday.

The Democrats' core concerns involve network neutrality, video franchising, interconnection rules and "special access" rules to Bell company telephone networks by their rivals, Davis said.

Stevens aides said Monday that changes designed to secure Democratic support included new net neutrality language baring Bell and cable companies from blocking Web sites.

Other revisions focused on the anti-piracy technology known as the "broadcast flag" and on increasing the revenues that municipalities receive from video franchises.

"[The] franchising [language] is better, but we are still not where it needs to be," Davis said of the latest draft. "On the broadcast flag, we support the language there, but it was not one of [Inouye's] primary or core concerns."

In addition to the wireless industry, Internet telephone calls and Internet video would be subject to federal, not state, law.

The new points of contention come on top of controversies over net neutrality and video franchising. Pre-emption and the broadcast flag are likely to be the subject of proposed amendments during Thursday's Commerce Committee vote.

On net neutrality, Sen. Byron Dorgan, D-N.D., "does not think that the revised version does what is necessary," an aide said, adding that Dorgan intends to offer his amendment barring price discrimination by the Bell telecommunications companies and cable operators. The move could generate considerable Democratic support and some from Republicans.

Another potential amendment would require cable operators to carry some broadcasters' multiple digital signals, committee aides said. The FCC's decision to pull that item from its meeting this week also could spur further committee action.

On video franchising, Inouye and Sen. Conrad Burns, R-Mont., have sought to require Bell operators to provide pay-television service to all neighborhoods, regardless of income.

Along the same lines, Sens. John Kerry, D-Mass., and Barbara Boxer, D-Calif., plan to file an amendment to require that new providers build out their high-speed networks throughout entire franchise areas. "Kerry and Boxer feel that the Senate should not legalize cherry-picking of cable service," a Kerry aide said.