Republican members of the Senate Commerce Committee have released an outline of draft telecommunications legislation that would remove all state or local barriers to entry for telecommunications service. The legislation would allow any regional Bell operating company (RBOC) to apply to the Federal Communications Commission (FCC) to offer interexchange services (em subject to generic safeguards, such as a separate subsidiary requirement. If the FCC certifies that interconnection/opening requirements have been satisfied, the RBOC request must be granted. (The interconnection/opening requirements ensure that the RBOC will not impede competition, as stipulated by the Modification of Final Judgment (MFJ)).
One year after enactment, the bill would lift the MFJ's manufacturing restriction and allow RBOCs to manufacture the full range of communications equipment. Although the bill would also repeal the ban against cable-telco cross-ownership, telephone companies would still have to offer video programming through a separate subsidiary. Similarly, cable companies would have to deliver telephone service through a subsidiary, unless they obtain a public interest waiver from the FCC.
After one year, the proposal would also allow all electric, gas, and water utilities to sell telecommunications services, including registered holding companies subject to the Public Utilities Regulatory Policies Act. If justified due to lack of competition, the proposal allows federal and state regulators to impose regulation, but prohibits rate-based rate-of-return regulation.