Congressman Ensign Also Helping SBC

Ensign Measure Would Restrict Municipal Broadband Networks By David Hatch

Sen. John Ensign, R-Nev., is drafting restrictive language on the creation of municipal broadband networks that might blunt efforts by Sens. John McCain, R-Ariz., and Frank Lautenberg, D-N.J., to allow localities to offer low-cost wireless or wireline service.

Ensign, who favors a pro-business agenda as chairman of the Senate Commerce Technology Subcommittee and the Senate Republican High Tech Task Force, will insert his provisions into a comprehensive deregulatory telecommunications bill he is drafting, aides said. McCain and Lautenberg introduced their bill last Thursday.

The conflicting bills address one of the most heavily lobbied issues in this year's rewrite of 1996 telecommunications law -- whether municipalities can compete with private enterprise and offer broadband services.

The high-stakes question -- millions of dollars in fees might be lost by Internet providers such as SBC if local governments are given a chance to serve some customers -- has already resulted in backroom maneuvering and changes in loyalty.

Congressman Ensign's broadband provisions would prohibit government-sponsored networks except in instances of a "true market failure," said Jack Finn, his spokesman. He added that the senator thinks "private enterprise and the free market should prevail."

Ensign said late last week he is working with the High Tech Broadband Coalition, which represents more than 12,000 corporations, on his provisions. That came as a surprise to some backers of the McCain-Lautenberg bill, who said the coalition had backed their approach and helped shape the language.

The coalition's members include the Consumer Electronics Association, Information Technology Industry Council, Business Software Alliance, Semiconductor Industry Association, Telecommunications Industry Association and National Association of Manufacturers.

Sources in industry and government said tech and telecom companies are willing to appease Ensign because they stand to gain on a bevy of issues through his draft.

The coalition counters that it never formulated a position on the McCain-Lautenberg bill.

"We have not seen the bill or been approached to endorse it," said ITI spokesman Adam Kovacevich, speaking for the coalition.

"I have had zero communications with Sen. McCain and Sen. Lautenberg," added David Peyton, spokesman for the National Association of Manufacturers, whose members include Verizon and SBC. "The NAM has done nothing on this issue."

But a staffer for Lautenberg said executives identifying themselves as coalition representatives helped draft the bill and indicated they would back it.

"As late as last Monday, members of the coalition were working with Sen. Lautenberg's office," said Alex Formuzis, the senator's spokesman. He noted that the coalition was involved "from the start."

A "Dear Colleague" from Lautenberg in May also suggests the coalition was receptive to the approach. The letter cited the High Tech Broadband Coalition by name and urged lawmakers to support the bill. An attached policy statement with the coalition's logo noted: "No statewide statutory barriers to municipal participation, whether explicit or de facto, should be erected." The sentence was underlined for emphasis.

Coalition sources emphasized that the coalition did not explicitly say in the letter or attachment that it endorsed the McCain-Lautenberg bill. The statement was prepared in response to developments at the state level, they said, adding that the coalition has not developed a position on a federal solution.

"That was an inappropriate use of the document," said NAM's Peyton.

An industry source said representatives of companies in the coalition "were involved with McCain and Lautenberg throughout," but did not officially represent the coalition. The source added that some coalition members said they were pressured by Ensign's office to back away from the McCain-Lautenberg proposal, a contention that Ensign flatly denied.

"I don't know where you're getting your information," the senator said in a brief interview late last week. "You're not getting it right."

McCain and Lautenberg now must proceed without a substantial block of industry support, a potentially huge blow for their just-introduced measure. The developments underscore the shifting alliances and horse-trading that is taking place as lawmakers consider a broad rewrite of the 1996 telecommunications law.

The Community Broadband Coalition, a comparatively smaller group representing mostly watchdogs and cities, endorses the McCain-Lautenberg approach. "We're supporting any legislative effort that can move broadband forward," said Jim Kohlenberger, an organizer of the group.

McCain and Ensign insisted they are not competing with each other on municipal broadband.

"We're working with Sen. McCain. We'll continue to do that. We consider him a very good ally on the Commerce Committee," Ensign said.

McCain added: "I respect the leadership position that Sen. Ensign plays on all of these issues, including telecom reform. We work together."

Copyright 2005 by National Journal Group Inc. The Watergate 600 New Hampshire Ave., NW Washington, DC 20037

202-739-8400 fax 202-833-8069 National Journal's Insider Update is an Atlantic Media publication.

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