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Wired for Progress

Barton Primed for Effort to Overhaul Telecom Act

When Texas Rep. Joe Barton (R) assumed the chairmanship of the Energy and Commerce Committee from retiring Rep. Billy Tauzin (R-La.) in the last Congress, he also inherited something else. Namely, stewardship of a tangle of national telecommunication laws applying a mish-mash of regulations to a cluster of industries growing so rapidly that the government has been hard-pressed to keep up oversight.

Already, Barton’s panel has dug into the issues with a bill addressing the onset of universal digital television technology and is moving forward with legislation that will have a profound impact on the way the federal government regulates the Internet.

But the biggest mountain for Barton and other Members and Senators to climb in this arena will be a massive rewrite of the Telecommunications Act of 1996, something he estimates has a “75 percent chance” of coming to pass in the current Congress. Barton sat for a Q&A with Roll Call Executive Editor Morton M. Kondracke.

ROLL CALL EXECUTIVE EDITOR MORTON M. KONDRACKE: You’re working on a rewrite of the 1996 Telecommunications Act. What are the chances of this actually getting through in the current Congress?

ENERGY AND COMMERCE CHAIRMAN JOE BARTON: Well, they just improved with what happened in the Senate last night, with the Senate just totally shut down, slowed down to a crawl, it would have been hard to do regular bills because of the time issue. I think [Senate Commerce, Science and Transportation Chairman Ted] Stevens [R-Alaska] wants to do a big bill, and I think there’s probably a 75 percent chance we get it done this year. We started with the digital television bill, I thought that was the easy one. I’ve not yet been able to get [Energy and Commerce ranking member John] Dingell [D-Mich.] and Energy and Commerce subcommittee on telecommunications and the Internet ranking member Ed] Markey [D-Mass.] to become co-sponsors. I think I might get there yet. We’ve got an IP broadband bill that we want to do, the broader telecommunication reform bill. There’s not too many people out there who say we shouldn’t do it, they all just have different opinions about the speed of it, and what’s included.

KONDRACKE: Now the first bill is the digital television bill …

BARTON: The Telecom Act of 1996 required the broadcasters to be able to broadcast digitally within 10 years. To help them, we gave them double spectrum, so technically they could have an analog signal and a digital signal. It really didn’t direct how they used the extra spectrum. Some of them have put additional channels, weather channels, public service channels, some do broadcasting, analog and digital. Some have learned to compress their signal and they do both. In any event, the transition date is set to be Dec. 31, 2006, or when 85 percent of their local market has the ability to receive the signal. Well, we haven’t dictated the receiver side of it. We have a kind of moving target on the sets that are sold in the United States, depending on the diameter of the screen, by a date saying they have to have a digital tuner in the sets. That actual transition, under the old law, the current law, the last group of sets, didn’t have to be digitally receivable until July 2007, and the hard date was Dec. 31, 2006. So what we’ve done in the bill we released last week was we moved the hard date forward to Dec. 31, 2008. We moved it forward two years. We’ve moved back the receiver transition to July 2006 and we’ve put a notice requirement that all the analog sets being sold have to have this as of Dec. 31, 2008. …

ROLL CALL: When would the analog spectrum space go back?

BARTON: It would go back on Dec. 31, 2008.

ROLL CALL: Are the broadcasters fighting the return of the analog?

BARTON: Ah, if we had them in here they would tell you they’re all for it, they just have these concerns that there are consumers that don’t have the ability to receive it, and the ability to buy a consumer box, and that they’re ready to go, and it’s peace and love. Of course they’re running ads all over the country blasting us and scaring the pants off the viewers. So they’re trying to have it both ways.

ROLL CALL: Does it require some sort of subsidy to have people able to buy converter boxes?

BARTON: It never has before, we don’t give people a subsidy to sign up for satellite TV, we don’t give them a subsidy to sign up for cable. We don’t buy their antenna. Most sets come with a little pair of rabbit ears that come with it, but if you want a little more than that you have to pay for it. The other side of the story is, to be honest, when television came into being, we didn’t mandate people buy TV sets, people just wanted to do it. We’ve never had a universal service requirement for television. We have had various rules and regulations about public service announcements and various doctrines about equal time, and things like that. But the concept is, if we’re going to have a date certain — and after this date everything’s going to be digital — that makes sense in a technical sense. But in a human sense, if you’re a low-income family and you only have one or two TV sets in your home, and they’re all analog and you don’t have cable and don’t have satellite, maybe we should give them a one-time rebate, or voucher to get that first set-top box. I don’t philosophically have a problem with this, because we’re mandating that all the signals be in digital. I have a concern about the cost of it. In our discussions with Mr. Dingell and Mr. Markey, we never really got an agreement on how much the federal government should pay.

ROLL CALL: And then the next step after the digital television bill is … ?

BARTON: Well, you have this various Internet Protocol, IP services and broadband services, and historically you’ve had state regulations, some federal regulations, based on original ownership. If it’s a phone company, it’s regulated by the state and regulated by the federal government. And the Internet just cranked up and started providing a service over the Internet, an identical service to the phone company, but the phone company’s regulated and the Internet company’s not. The concept of broadband going into the home and into the office is something that really is kind of a phenomenon of the last 10 or 15 years. If you step back, philosophically, you say, “How should we do this, what role should the federal government play, what role should the FCC play, what role should the market play?” … I’m not going to be bound by the way it has been done, let’s look at what makes sense today. And you get to something called functional regulation. If you’re providing, if you’re a broadband carrier, and you provide a data service and a voice service and a video service, under current law there’s no easy way to pigeonhole you.

ROLL CALL: Essentially the same people are providing all three.

BARTON: Right, so the Internet Protocol/Broadband bill is what kind of federal rules and regulations we put on a discrete IP carrier, which are the voice services and the data services and the video services. Do we handle each one differently? Do we handle each one the same? Do we let the feds do it, let the states do it? Do we let the government do it?

… My general feel is that we do as little regulatory oversight as possible, provide access and transparent interstate commerce rules and regulation, and let the market dictate the outcome.

ROLL CALL: Is the Internet going to be tax free forever?

BARTON: I hope so.

ROLL CALL: But state and local governments think there’s so much interstate commerce that goes on that they’re missing taxation and there’s a disadvantage for not only them but for local stores because Internet commerce is not taxed.

BARTON: You get a sales tax state like Texas. Is it fair to the Best Buy in Arlington, Texas, that people walk in there and pay taxes in Arlington and state of Texas sales taxes, but then goes on the Internet and buys something from Best Buy on the Internet, and you don’t have to pay state sales tax?

ROLL CALL: Is that fair?

BARTON: Probably not. … I would allow a local point of origin sales tax — state or local — to be collected if you have the various reciprocity agreements with the buying location or selling location. I wouldn’t put a federal interstate commerce tax on Internet.

ROLL CALL: Right now under law nobody can charge sales tax for Internet transactions, isn’t that right?

BARTON: I think you can charge it — you may have difficulty collecting it. It’s kind of a voluntary compliance. The states are trying to get some compacts together where they jointly agree. And I’m supportive of that.

ROLL CALL: What about the indecency situation? There are various proposals around to try to extend federal coverage to cable.

BARTON: The House has already passed our bill. Passed it in the last Congress, passed it in this Congress. The Senate hasn’t done anything this Congress. But we increased the fine and we broadened the reach so that the entertainer, the perpetrator, the individual who causes the event to happen could be held liable. It’s discretionary, not mandatory. We don’t apply the same rules to cable and satellite. I’m supportive of the concept that they be applied, but I don’t want that debate to slow down the debate that we’ve already had. … So let’s get that done on over-the-air broadcast television and then come back and work with Sen. Stevens on how to either broaden the reach of it to cable and satellite or work with the cable and satellite industry to get them to do some things voluntarily.

ROLL CALL: Since the public owns the airwaves you have a way of regulating decency on broadcast. But what’s your hook, or what’s your authority, over cable since it’s not owned publicly?

BARTON: Well, they still use some sort of a means of conveyance that reach the customer that’s in the public arena. … But the problem with cable and satellite is, they argue that since people pay for it, it’s not free, that you pay Comcast or you pay Time Warner a set fee, and then even within that you pay for specific previous channels, that there is a right to receive that material and that it can’t be regulated and you can’t set any terms or conditions on it. I disagree with that. I think most people view cable and satellite as an extension of over-the-air television, and a lot of what they’re watching through cable and satellite is over-the-air television. It just comes through the satellite signal or their cable outlet into the home. But within that context, I’m not going to try to set terms and conditions on what somebody buys. … Here’s how I view it; so you get your basic tier one cable package, that is family friendly, and you pay a certain fee for that, so 50 bucks a month. Then you may want to add the young adult package to it, and get E! and MTV and some of these things that are a little bit more raunchy in content. And then if you want to go beyond that you may want to go to the adult-oriented channels that include adult movies and stuff that may be extreme violence or whatever. So what I get for my basic cable package would be subject to the same indecency standards as is on-the-air television.

ROLL CALL: Let me just go back to the tax issue. Do you think that Internet telephone service should have some sort of universal fee applied to it?

BARTON: I don’t.

ROLL CALL: Why not?

BARTON: We have a universal service fee for telephones today. What was the logic, what was the principle?

ROLL CALL: Would you repeal that?

BARTON I would. … We haven’t because when telephone service originated in urban areas and people in the rural areas said, “We want telephones, too.” And the telephone companies said, “Well, I’m sorry buddy, but to get a telephone line to your home, you live 5 miles out in the country, we’d have to charge you $2,000 to put the poles and string the line.” And the guy says, “Well you’re not charging the person who lives in downtown New York City $2,000.” Yeah, but there’s 2,000 people on their block. So a universal service fee came into existence where you collected a fee from people in the urban areas to subsidize the cost of the service in the rural areas, so that theoretically … the people in the city paid a little bit more, which meant the people in the country got phone service. … In 1930, let’s say you’re paying $2 a month in New York City for basic service, somebody in East Texas might be paying $1.50. That’s why.

ROLL CALL: But from time to time it’s been proposed … I believe Al Gore was in favor of this, taking that tax and using it to expand broadband coverage.

BARTON: It’s called the e-rate program. … It’s an absolute boondoggle.

ROLL CALL: But if we did it for rural areas why shouldn’t we make sure that everybody, regardless of income, has broadband service?

BARTON: … Go back to original concepts. We now have the Internet, you can now get phone service over the Internet. However you get the Internet, you get it, OK, you live in a town, you live out in the country, you can get it by satellite, you can get it through your cable, you can get it all kinds of different ways. But you decide you want a telephone. Why in the world do we set up a universal service fund for Internet phone service when there is absolutely no need to subsidize the phone anymore wherever you are? However you’ve done it, you’re hooked up to the Internet with no subsidy. You’re going to create a subsidy for phone service?

ROLL CALL: Is there a digital divide?

BARTON: I don’t think so.

ROLL CALL: I’ve seen various surveys, or statements anyway, that we don’t have the kind of broadband penetration that other countries do.

BARTON: That’s very true, and primarily because of all the various state and federal and local regulations. … There’s good news and bad news about the United States of America. The good news is that we’ve always been an innovator of technology and we’re the most advanced industrial society and the most productive, so we’ve got this huge base out there. The bad news is we’ve got all kinds of rules and regulations on how to use it because we did start in the 1880s. Where some, like Singapore, or some of these developing nations, you know, 100 years ago they probably didn’t have 10 telephones in the whole country. So if they’re starting from scratch they can put it all the best technology today and use it in the most innovative ways because they’re not hung up with all the regulations that we are.

ROLL CALL: I’ll combine two issues; what are you going to do about Spyware, and what are you going to do about copyright infringement?

BARTON: On Spyware, we passed two competing bills yesterday on the floor. The Judiciary bill which sets criminal penalties that doesn’t require any kind of advise and consent. Under the Judiciary bill, you can put Spyware on your computer and it’s fine. If you use it for something that varies purpose, and you get caught, you can be fined a lot and I guess sent to jail. Under our proposal, out of the Energy and Commerce Committee, the act of putting the Spyware on the computer is a crime, and you can’t do it unless you say you want it.

ROLL CALL: In other words, if somebody inserts Spyware into my computer, that’s ipso facto against the law.

BARTON: Under the Energy bill. Under the Judiciary bill, they’re fine with it. If they use it for the purpose that harms you, then they can be brought to trial and sent to jail. Under Judiciary, you put all the Spyware you want on your computer without your permission or knowledge, and you can pretty well use it for any purpose and it’s OK.

ROLL CALL: So both bills passed the House, but presumably this would be resolved in conference?

BARTON: Well, let’s see what the Senate does and then we’ll go to conference with the Senate. What I’ve offered to [Rep. Jim] Sensenbrenner [R-Wis.] and to [Rep. Bob] Goodlatte [R-Va.] is we’ll take your criminal penalties — I don’t have jurisdiction there. I love criminal penalties for this. I want to throw the book at these guys. Putting it on the computer is a crime. That these key-stroke login theft is a crime, and all of these things. But they don’t want to do that.

ROLL CALL: And copyright infringement?

BARTON: Are you talking about fair use?

ROLL CALL: Yes, I’m taking about the ability of people to steal movies, music, all that stuff. Do you think you’ve done as much as you can do?

BARTON: Pure copyright infringement is Judiciary and some Energy and Commerce. I want to protect our creators, the creative talent in this country, the movie producers and the television producers, and the musicians. I have great respect. … I wish I had that talent. I don’t, so I respect those that do. And anything we can do to go against piracy I’m for. Where I’m a little bit different, I believe that [Rep.] Rick Boucher [D-Va.]; you buy a video, you buy a CD, you do have the right to make one or two copies for your own personal use. That’s called fair use. And we’ve always allowed people, under the older technologies, to make one or two copies. The problem when you get to the digital technology is that you can make a thousand perfect copies. So, the Judiciary Committee … their solution has been to outlaw the act of copying. So you just can’t make any copies. That’s the Motion Picture Association … that’s their position. No copies. And so Boucher and I’s position is, let’s find a way to make a few copies and then that’s it — not for commercial purposes, not for resale — just for your own personal use. And the technology is debatable. Some people think the technology is there to do that. The CD people are putting that technology in their CDs. The video people have not yet agreed that they can do it, although I think they can. So that’s an in flux issue.

ROLL CALL: As a Parkinson’s disease activist, what’s going to happen on the National Institutes of Health reauthorization?

BARTON: We’re trying to move the bill this summer. We’re having the stem-cell debate today. I’ve got an agreement with the stem-cell people that by doing the debate separately, we won’t let the NIH bill get bogged down in recriminations on the ethics of stem cell research. So we’ve got several staff people working with the stakeholders to come up with a draft model bill, and the closer we get to doing it the more people here are a little jumpy and they want to try to protect the status quo. You’ve got 27 institutes out there, they all have their own budget, they all have their own turf, they have some coordination but very little. So we’re trying to maintain the visibility of the various institutes that put some more collectivism into play, and more sharing of resources, administration. If somebody’s doing research on lung cancer in the lung institute, we want to find the mechanism that they’re working with the people in the cancer institute, because they’re both working for the same purpose, except that one’s technically in cancer and one’s in lung so they don’t communicate. So we want to share data. We also want to share resources, to give the NIH director the ability … whereas right now all the money is put in different silos and you can’t … give the director a percentage of the total budget so that he can redirect. Of course when you’re talking about moving money, everybody’s ears kind of perk up. What I tell people is, well, if you’re doing the best research like you claim you are, you’re going to be fine. You’re going to get more money. Ultimately, there’s going to be somebody somewhere that maybe is not doing the cutting-edge research and they’ll have to acknowledge that and get by with less. We’re not trying to cut the budget of NIH, we’re not trying to cut people at NIH, we’re simply saying, we have an institute that’s spending $30 billion a year, let’s make sure we spend that in the most cost-effective way to do the best job we can to find a cure for Parkinson’s and Alzheimer’s and cancer and whatever. …

ROLL CALL: Most of the disease activists are now very concerned that we’ve spent all this money and have very little to show for it. There seem so be lots of problems in the whole pipeline, from discovery to actually getting medicines. And part of it’s litigation.

BARTON: We’ve done that with the best of intentions. … It’s time to revisit basic principles and see if we can’t do it a little better. …

[We need to] see if we can’t do some consolidation, and then do some reorganization, reset some mission statements, give a little more budgetary discretion at the top — you’re still going to have discreet line items — and then set some guidelines on sharing.

ROLL CALL Thank you so much.

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