The giant phone company SBC is on one side of a high-powered lobbying battle in Springfield over deregulating broadband services. On the other side are a couple of other giants, AT&T and WorldCom’s MCI, a host of independent local telephone and Internet providers and consumer advocates.
Yes, that’s what all those ads–including the ones with the guy in the cowboy hat–are about.
By now, the regulatory and legislative battles between SBC and its telephone competitors have become commonplace. SBC fought to keep its phone monopoly, it lost, and consumers finally have a choice. Miracle of miracles, SBC has become much more responsive to its customers now that its customers can go elsewhere.
This battle is a little different. SBC is trying to make its mark in broadband, the high-speed Internet access that is gradually finding its way into many homes. SBC argues that its main competitors in broadband–indeed, the dominant competitors in broadband–are the local cable television companies. SBC has about 25 percent of the broadband market. Cable companies are the dominant force, controlling 70 percent of broadband access.
The cable firms aren’t regulated by the Illinois Commerce Commission. But SBC is. One result is that SBC has to give its phone competitors access to its telephone and its broadband network at discounted prices.
And so, the fight: SBC wants to be free of state regulation as it expands its broadband services and competes with unregulated cable firms. It doesn’t want to extend its broadband network and have to sell it on the cheap to its phone competitors. On the pure question of broadband regulation, SBC has a solid argument. Unlike telephone service, which was long a monopoly, there is already competition for high-speed Internet. SBC should be freed to compete.
Level the playing field, SBC says, and its investment dollars will flow into the state. Pretty soon, all SBC customers in Illinois will have access to high-speed Internet services. Then they can decide if SBC’s service is a better buy than what the cable company or other competitors have to offer. Competition flourishes. Prices drop. That’s the promise.
Here’s the problem.
SBC’s telephone competitors argue that proposed legislation to deregulate broadband actually goes much further and lifts the rules on their access to the mother lode–the SBC local telephone network. Pass this law, they say, and all the hard-fought gains in local telephone competition will vanish.
The larger problem for SBC is one of its own making. Ever since its takeover of Ameritech, SBC has developed a big credibility problem in this state. It has made promises regarding customer service and expansion of offerings that never happened or only happened after the company was slapped with hefty fines. So there is a natural tendency of many people in Springfield to be wary of SBC promises.
Illinois should follow the direction recently set by the Federal Communications Commission, that telephone service competition can be nursed through regulated competition, but broadband services should be deregulated.
The proposed Illinois legislation is not complicated. It is no more than two pages in length. It could be narrowly worded so it clearly deregulates only broadband. Legislative sponsors could also reinforce this definition by stating the legislative intent in House and Senate debate.
If the legislation can be written in such a narrow way–we believe it can–then it should become law. But the onus is on SBC. The company must recognize it still has a credibility problem. If lawmakers think they’re getting fast-talked into a law they don’t want, they will rightly send SBC away empty-handed.
