By David Kurlander
The Biden administration last week announced the American Jobs Plan, a $1.9 trillion infrastructure bill. The Plan devotes $100 billion to securing “broadband for all,” access to high-speed Internet for every American. On Monday, President Biden Tweeted, “Broadband is infrastructure.” Technology pundits were quick to highlight the difficulty of Biden’s goal: Vox’s Sam Morrison called the plan “an enormous and complicated undertaking,” while WIRED’s Stephen Levy invoked failed efforts by past presidents and Congress to effectively cooperate with broadband providers. The controversy surrounding one such scuttled legislative effort, the Internet Freedom and Broadband Deployment Act of 2001, captures a particularly tense political snapshot in the long and gnarled history of Internet access.
The 2001 congressional broadband dust-up had its origins in the break-up of AT&T, known colloquially as “Ma Bell.” The telephone company had enjoyed a virtual monopoly throughout most of the 20th century, controlling local and long-distance phone lines and manufacturing most of the physical phones nationwide through its Western Electric subsidiary. The Department of Justice embarked in 1974 on a decade-long quest to break AT&T’s monopoly, eventually pushing AT&T to give up its local phone arm, which in 1984 became seven regional companies known as the “Baby Bells.”
The Baby Bells—which included companies like SBC and Bell Atlantic (which became Verizon)—continued to reign supreme over local phone lines. AT&T, meanwhile, moved into long-distance and cable, through which it began to provide early connection to the Internet.
As Internet technologies matured in the mid-1990s, President Clinton moved to limit the ability of the Baby Bells to take control of the industry. Clinton guided the passage of Telecommunications Act of 1996, which allowed the Baby Bells to wade into the high-speed Internet marketplace—which they would deliver through phone lines (DSL)—only if they shared their facilities and technologies with local DSL startups at wholesale prices.
The Act was designed to foster an Internet provider landscape with enough room for the DSL-originating Baby Bells, the DSL startups, and the former “Ma Bell,” AT&T, which was expanding its existing efforts to deliver broadband through its cable modems.
“For nearly two decades, Vice President Gore has worked to spur the creation of a national information superhighway,” President Clinton said at the February 1996 signing ceremony. “This Act lays the foundation for the robust investment and development that will create such a superhighway to serve both the private sector and the public interest.”
Between 1996 and 2001, however, the Internet exploded even faster than anticipated. The “Baby Bells,” economically hamstrung by their Telecommunications Act sharing agreements, claimed that they were unable to meaningfully compete with the cable providers, led by AT&T and new competitors like AOL Time Warner. The Baby Bells wanted out of the restrictions.
To make matters more pressing, the initial dot-com bubble burst in Spring 2000. NASDAQ tech stocks plunged, and Baby Bell executives began speaking out forcefully for deregulation, arguing that the impediments to delivering DSL had contributed to the downturn and were stopping Americans from getting good Internet. “The rate of adoption of these technologies has slowed dramatically, along with the growth of the economy itself,” Verizon public policy head Thomas Tauke said in August 2001. “So what’s flattened the slope of the curve in 2001? The answer is the lack of widespread deployment of broadband technology.”
Washington legislators were hearing the Baby Bells loud and clear. A few months earlier, in April 2001, Louisiana Representative Billy Tauzin, chairman of the House Energy and Commerce Committee, and long-serving Michigan Representative John Dingell, the Democratic Ranking Member, had introduced a bill to eliminate the regulations on the Baby Bells.
Tauzin and Dingell positioned their Internet Freedom and Broadband Deployment Act primarily as a means of getting more Americans online. “Americans are only 7% connected with broadband,” Tauzin told C-SPAN’s Washington Journal. “Urban centers are not only going to be last in line to get these incredibly important services, but they may never get them.”
Meanwhile, AT&T corralled the cable broadband providers and the DSL startups into a vocal opposition, arguing that the “Baby Bells” were wriggling out of Clinton’s prudent restraints and would corner the broadband market if they were allowed in. They hired former Clinton Deputy Chief of Staff and Washington lobbyist Steve Ricchetti—the chairman of President Biden’s 2020 campaign and the current Counselor to the President—to co-chair “Voices for Choices,” a multi-millionaire dollar radio and TV advertising blitz positioning the Baby Bells as a greedy wannabe monopoly.
The “Baby Bells” responded with an equally aggressive campaign, with SBC alone spending $3.8 million on lobbying in the first half of 2001. SBC President Bill Daley, President Clinton’s former Commerce Secretary, acknowledged that “The costs are getting out of control.”
“These are huge stakes,” Tauzin told the Washington Post in the midst of the lobbying war. “These giants are just beating up on each other.”
Despite the massive investments on both sides, the Bill was arguably doomed from the start, largely due to a one-man firewall: South Carolina’s Democratic Senator Fritz Hollings, the 80-year-old Senate Commerce Committee Chair. Hollings—a longtime hater of the Baby Bells who had written much of the 1996 Telecommunications Act—openly detested the proposal. He also received substantial campaign contributions from AT&T.
President Bush, decidedly preoccupied with the War on Terror, decided not to weigh in on the fracas, further ceding the floor to Hollings. And the lack of clear partisan side-taking made reportage on the Bill somewhat perplexing to the public.
By the time Tauzin-Dingell passed the House by a vote of 273-157 in March 2002, Hollings had emerged as an impenetrable force. “The communications bill…is blasphemy,” he wrote in a Roll Call op-ed after the Bill passed the House. “It merely allows the Bell companies to extend their local monopoly into broadband…the country would return to an AT&T-like monopoly control of communications.” Hollings, in his chairmanship, had the power to stop the Senate from marking up the Bill.
And that’s what Hollings did. He consented to hold one hearing, on March 20th, during which the debate over the Bill devolved into ad hominem attacks. Hollings got into a macho sparring match with Tauzin over the merits of the Bill, decrying Tauzin’s “pretty little charts” and taking offense to Tauzin’s characterization of his attitudes as rigid. “You are the only person I know in this town who has ever called me tight. And I want to tell you, I am as loose a guy as you ever found here,” Hollings claimed. Following the mudslinging, the Bill faded into oblivion.
Clearly, the back-and-forth over Tauzin-Dingell and the Baby Bells did not define the legacy of the Internet. The struggle is largely forgotten, in part because AT&T ultimately re-merged with many of the Baby Bells and established a new sort of Internet near-monopoly in the heady 2010s.
What Tauzin-Dingell demonstrates twenty years on, then, is the difficult role of government in determining the distribution of Internet technologies—and the ways in which entrenched corporations can influence that process. Whether Tauzin-Dingell was truly meant to grant broadband access to more Americans or was simply an exercise in amplifying special interests, the Bill’s failure showcases the mammoth task ahead.
Biden’s American Jobs plan, then, may finally be the spur that transcends the convoluted political gamesmanship that has accompanied so much of the Internet’s rise.
For more on the early-2000s debates over broadband, check out two collections: Ronald W. Crandall and James H. Alleman’s 2002 Broadband: Should We Regulate High-Speed Internet Access? and Ellen S. Cohen’s 2007 Broadband Internet: Access, Regulation and Policy.
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