Tech Executives Tout Broadband as Telecoms Clash
By ANDREW SIMONS
Two prominent Orange County technology executives made the rounds in Washington, D.C., last week, talking up an issue they see as key to their future: nationwide broadband Internet access.
Dwight Decker, chief executive of Conexant Systems Inc., and Matt Massengill, chief executive of Western Dig-ital Corp., met with White House officials and lawmakers last week about the best way to expand broadband access.
Growth in broadband, or high-speed Internet access, stands to boost Orange County technology companies.
Newport Beach-based Conexant, as well as Broadcom Corp. and Intersil Corp., both of Irvine, make chips for broadband networks. For Lake Forest-based Western Digital, the lure of broadband could spur computer sales,and demand for its disk drives.
At issue is what role the government should play in creating a nationwide broadband network. The subject has become entangled in the ongoing battle between regional phone companies and rivals spawned by the 1996 Telecommunications Act.
Decker and Massengill’s visit came a week after the House of Representatives passed the contentious Tauzin-Dingell bill, which lifts what the Baby Bells call some of the most onerous provisions of the 1996 act.
The proposal would relieve Baby Bells of having to share their networks with rivals in exchange for the Bells offering high-speed Internet access across the country. The bill also would keep the government from regulating rates and terms for broadband providers.
That is music to the ears of the Baby Bells.
“There have been a lot of outlandish accusations about this bill,” said John Britton, a spokesman for Pacific Bell, part of San Antonio-based SBC Communications Inc. “All this bill does is create conditions that treat all players equally.”
The measure has its share of detractors because it would allow the regional phone companies to deny competing broadband providers access to their remote terminals,way stations between broadband subscribers and the phone company’s central office.
In the past nine months, Pacific Bell has installed nearly 52 new remote terminals to bring high-speed digital subscriber line service to new parts of OC. The move more than doubled the number of Pacific Bell terminals in the county.
The Tauzin-Dingell bill could keep small DSL resellers, such as Rancho Santa Margarita-based Ariel Communications, from offering service, according to April Josephson, Ariel’s president.
“It would put us out of business,” she predicted, “especially if they don’t have to resell to us.”
The California ISP Association, a lobbying group for statewide Internet service providers, opposes the bill.
Baby Bells would face the added cost of extending their networks to far-flung areas. But they wouldn’t have to bear the cost of accommodating their rivals. The Bells contend that offering wholesale access to their facilities amounts to a free ride for competing DSL providers.
“All we’re talking about here is future investments,” Britton said. “Why would we invest billions of dollars if we have to turn around and give it away? The whole idea is you want it open to competitors, not to give a subsidized ride into the future.”
But smaller competitors don’t have enough money to make the investments the Bells make, Josephson said. That, combined with the fees incurred locating gear within Pacific Bell facilities, makes it hard for smaller companies to compete.
Pacific Bell and other regional phone companies say they need more leeway to compete with rival broadband services, such as cable, satellite and wireless Internet access.
“There are four competing technologies here,” Britton said. “Cable companies with 65% to 75% of the market, face virtually no regulations. Our regulations were intended for the local phone service, not for Internet access.”
A spokeswoman for Cox Communications Inc., which serves most of South County, said the Atlanta-based cable company is staying out of the fray for now.
“We’re neither for nor against (Tauzin- Dingell),” said Cox’s Laura Oberhelman. “We were neutral in other types of legislation such as this, and we’re neutral here.”
For OC tech executives, the issue is simple: they want whatever’s going to spur broadband access the fastest, according to Garrett Ashley of TechNet, a Bay area-based lobbying group. Decker and Massengill both are members.
While TechNet has stayed neutral on the Tauzin-Dingell bill, the group laid out a set of goals similar to those in the Tauzin-Dingell bill. The key point: less regulation for quicker growth.
“This is an important issue for us,” Garrett said.
