from: National Journal [1]

Wired In Washington

So Long To Massive Telecom Bill

By David Hatch

(Editor’s note: David Hatch’s ‘Wired In Washington’ column appears on alternate Wednesdays in CongressDailyAM. The below column was first published on February 7. Hatch regularly covers telecommunications for National Journal's Technology Daily, and is a contributing editor to CongressDaily and National Journal magazine.)

So long, massive telecommunications legislation. Welcome to the spotlight, series of byte-sized bills.

The new year has brought major changes to the communications policy landscape, putting regulatory minded Democrats in charge and executives at AT&T and Verizon on edge. Gone is last year's sweeping legislation, which would have upended the telecom universe if enacted. In its place, at least in the upper chamber, will be a succession of smaller measures.

The chief architect of this piecemeal strategy is Senate Commerce Chairman Daniel Inouye, D-Hawaii. To kick things off, he introduced a bill last month that would provide the Commerce Department with more guidance on awarding grants to bolster emergency communications.

A critical issue, indeed. But so far, there have been no grand pronouncements from Inouye about revamping the watershed -- yet hopelessly outdated -- Telecommunications Act of 1996. By contrast, last year's chairman, Sen. Ted Stevens, R-Alaska, marked the 10-year anniversary of that law with a proposed rewrite so ambitious that it spawned multiple net-neutrality fight songs, a short video poking fun at his poorly worded description of the Internet, and derision on Jon Stewart's The Daily Show.

So perhaps it's no surprise that observers in both parties think Inouye might be on to something. "Once he gets momentum, he can cobble [the bills] together," said a Republican Senate staffer, emphasizing that modest measures allow telecom and media companies to put their lobbying muscle and money behind specific initiatives. "It's worthy of a try after last year," the staffer said, pointing out that Stevens' bill never gained enough support from GOP leaders to move to the floor.

"I think that's probably a logical approach given the state of the industry," said Earl Comstock, president of Comptel, an industry group that strongly opposed the deregulatory House and Senate legislation considered last year. "In a sense, you could move three or four targeted bills that cover much the same ground as one comprehensive bill."

"I think it's very consistent with Inouye," remarked Justin Lilley, a lobbyist representing telecom and cable interests. "He's a very careful legislator guided by what's realistic and achievable."

Privately, Democratic and Republican staffers concur that lessons learned from Stevens' ill-fated effort are a key reason why Inouye has shown comprehensive legislation the door. The Alaskan's text grew heavy like a Christmas tree buckling from too many ornaments -- in this case, pet provisions from senators and well-connected industry groups. The more bloated it got, the more opposition it triggered, until it collapsed.

An Inouye spokeswoman said the new strategy is appealing because it is agile, allowing the senator to move quickly on urgent policy matters.

It would be easy for Inouye to follow in the footsteps of Stevens, who valiantly sought to keep his package afloat amid broadsides from Democrats, Internet behemoths, rural phone interests, state regulators and watchdogs.

Last spring, Inouye released a 105-page "discussion draft" as an alternative to Stevens' version. Inouye could have signaled early this year that it would become the basis for fresh legislation, yet he's keeping it shelved for now.

There's another reason why a grand rewrite is not in the cards: the two most powerful Bell companies are no longer pursuing it. AT&T and Verizon lobbied fiercely for Stevens' measure because it would have granted them expedited entry into the video programming business without saddling them with much, if any, regulation of their high-speed Internet offerings.

But the change in congressional control has precipitated a re-evaluation by the Bells, who have secured portions of the relief they were seeking at the Republican-controlled FCC and in state legislatures.

For some stakeholders, Inouye's humbler, gentler agenda lacks the cachet of last year's high-stakes, high-profile drama. "It's probably a let down for a lot of lobbyists around town," said an industry source, who added with a chuckle that thankfully she no longer charges by the hour.

Another observer noted that having a massive telecom overhaul on the table, even if it stands little chance of passage, is a fundraising magnet for politicians and lobbyists alike.

Indeed, telecom and cable giants are still reeling from the tens of millions of dollars they spent in 2005 and 2006 on lobbying, advertising and campaign contributions with the goal of passing federal legislation.

Gary Arlen, president of the research firm Arlen Communications, estimates that at the height of the madness last spring, industry titans -- mostly the Bells -- were shelling out $250,000 a week on issue-related advertising in Washington and in key congressional districts. "They were running ads when Congress wasn't even in session. It tells you how much they wanted to get the word out," he said.

So for now, the 2006 feeding frenzy, with its pitched battles, phone book-sized drafts and marathon mark ups is history, at least until the Republicans regain control or Inouye decides on a course correction.

Then again, it's not as if the K Street crowd won't have ample opportunities to make mischief and boost retainer fees. And lobbyists can count on these upsides: more opportunities to score legislative victories and attend signing ceremonies.