December 5, 2001

The Honorable Dennis Hastert

Speaker

U. S. House of Representatives

Washington, D.C. 20515

Dear Mr. Speaker:

As you prepare to bring H.R. 1542, the “Internet Freedom and Broadband Deployment Act of 2001,” to the House floor for a vote, AARP would like to share our views on the legislation as currently drafted and, in addition, comment on recent developments that could determine the future of broadband deployment for residential consumers. AARP shares the goal of Congress to accelerate the deployment of broadband services to all consumers. However, we have concerns with H.R. 1542 related to the expansion of competition in local and long distance telephone service that must be corrected prior to passage.

In April of this year, we sent a letter to Energy and Commerce Committee Chairman Tauzin outlining AARP’s areas of concern and expressing our interest in working with the Committee to strengthen the legislation. We asserted our belief that residential consumers are best served in a fully competitive marketplace. We expressed support for full and open competition not only in local and long distance telephone service, but also in the advanced services of broadband and cable as well. As a means to achieve this, we urged that legislation promoting the deployment of broadband services incorporate the following four core principles:

· First, the mandate that Regional Bell Operating Companies (RBOCs) fulfill the Section 271 requirements of the 1996 Telecommunications Act (the Act) prior to providing voice long distance service in a state must be maintained.

· Second, the continuing trend toward worsening service quality must be reversed via tougher enforcement and stiffer penalties.

· Third, broadband must be deployed nationwide to all consumers, including inner city and rural residents.

· Finally, a priority must be placed on ensuring that local phone and broadband service facilities are accessible to competitors so that residential customer choice becomes a reality.

A good deal of activity has occurred in the ensuing months that has focused on many of the concerns we raised regarding H.R. 1542, and attempts are clearly being made to address the bill’s inadequacies.

Unfortunately, preservation of the Section 271 market opening requirements of the Telecommunications Act of 1996 has not been one of the items where progress has been made. Fulfilling the Section 271 checklist requirements that Congress put in place – specifically, restricting an RBOC’s provision of interLATA voice or data services -- is an important issue to AARP. We have been a strong supporter of the Act, believing that residential consumers are beginning to see promised benefits of competition. To subvert existing law in this area would be anti-competitive; the Section 271 requirements should be maintained.

Progress has been made, however, on the issue of service quality. AARP has expressed its concern about the disturbing degradation in the quality of service that consumers are receiving throughout the telecommunications industry. The fact that consumers were already reporting frustration with the installation and service of DSL lines in limited service areas does not bode well for the nation-wide deployment the legislation seeks to promote. In our April letter, we supported the inclusion of legislative language that would focus on the enforcement of service quality standards in the provision of DSL service. Therefore, we support legislation like that of Rep. Fred Upton (R-MI), whose bill strengthens enforcement of service quality measures while increasing penalties for infractions. We hope that Mr. Upton’s bill is ultimately incorporated into the legislation.

In keeping with the ultimate goal of the legislation, a provision should be included in H.R. 1542 requiring the “build out” of telecommunications facilities so that all consumers have access to “reasonably comparable” broadband services as referenced in Section 254 (b)(3) of the Act. Of specific concern are the millions of Americans residing in rural areas and within pockets of the inner cities that do not traditionally have the ability to subscribe to advanced telecommunications services. A measure ensuring access to these services should become a part of H.R. 1542.

Finally, attempts to amend and redraft H.R. 1542 must include provisions to remove potential impediments to the advancement of competition for local telephone and broadband service. Despite well-intentioned attempts to remedy the problem, the legislation continues to put at risk the line-sharing requirements of the 1996 Telecommunications Act that allow competitors into the local exchange market. Absent these requirements, it is unlikely that a truly competitive marketplace will continue to develop, leading to market power concerns and the attendant pressures to increase local rates for phone and broadband services. Adding provisions to facilitate line-sharing would prevent competition from being foreclosed and would serve to benefit a large segment of AARP’s members.

A step towards resolving this issue was taken this past August when Verizon introduced its “rational regulation” plan. The regional carrier’s plan is an attempt at bridging the gap between the concerns of the competitive local exchange carriers (CLECs) and the desires of the incumbent local exchange companies, while addressing consumer advocates’ interest in the promotion of local exchange service competition. The key components of the plan -- retaining regulation over voice telephony, preserving line sharing in the existing network, treating competitive carriers as wholesale customers and ensuring that competitive carriers have access to customers at commercially reasonable rates -- serve to advance the debate and provide the Members of the House with a model upon which to build. We expect to work with all interested parties to develop the plan into legislation. Clearly, the addition of legislative language that promotes broadband deployment without burying the competitive carrier industry is imperative.

AARP appreciates the efforts of the Chairman, Ranking Member and others to accelerate the deployment of broadband technologies to a greater percentage of the population. We are in favor of efforts to close the “digital divide” by providing residential ratepayers with the Internet access they desire. H.R. 1542 has served as a vehicle to reach our mutual goals; in its current form, however, it should not be the House’s final word on this issue. Progress is being made in addressing some of the concerns we highlighted in our April letter and we hope that trend continues.

We look forward to continuing to work with the Congress to find an approach that will bring technological advances to all Americans without endangering the framework that serves to stimulate the competitive marketplace that we all desire.

Sincerely,

William D. Novelli

Executive Director & CEO

Cc: The Honorable Richard Gephardt