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Lashing out at critics who have declared upstart telecommunications companies effectively dead, former FCC Chairman William Kennard has denounced moves by the Bush administration and Congress to dismantle many of the regulations put in place by the FCC during his three-year tenure. Speaking at an exclusive technology conference on Wednesday in Laguna Niguel, Calif., Kennard expressed annoyance with those who call the Telecommunications Act of 1996 a failure. Enacted to free up local telephone service from control of the Baby Bells, the act so far has neither lowered rates nor improved service for most Americans. Many upstart competitors, officially known as competitive local exchange carriers or CLECs, have seen their stock prices plummet, and several have filed for bankruptcy protection in the past year. After reviewing the shattered state of the business, Kennard called for stricter enforcement of the provisions of the 1996 act. “The [Telecommunications] Act didn’t create a free market,” he said, arguing against wholesale deregulation in telecommunications. “That’s a myth. What it did was bring more balance to what was historically a monopoly market.” The only way to foster real competition in local markets, Kennard added, is through “the intervention of government.” It was Kennard’s most outspoken statement since he left office the night before President Bush’s inauguration. This month, the former chairman became a managing director at the Carlyle Group, a $13 billion private investment firm in Washington, D.C., where he will look for bargains in the bruised telecom sector. He was speaking at the Vortex conference, which focuses on the networking industry and the convergence of Internet, phone and television services. Now, Kennard said, Baby Bells — SBC, Qwest and Verizon — are using the economic downturn in the telecom sector to argue that CLECs are “not a viable business model” and that the Bells are the only companies capable of building out high-speed residential networks. “I like to call that the ‘seduction of monopoly,’ ” Kennard said in rejecting that argument. A bill before Congress, the Internet Freedom and Broadband Deployment Act of 2001, would lift the prohibition on the regional Bell companies from providing high-speed Net access, without requiring them to open their markets to local competition as specified in the Telecommunications Act. Sponsored by Rep. Billy Tauzin, R-La., the new chairman of the House Energy and Commerce Committee, along with Democrat John Dingell, the committee’s ranking member, the bill directly criticizes Kennard’s efforts to promote competition in phone and Net access service. “The imposition of regulations by the Federal Communications Commission … has impeded the rapid delivery of high-speed Internet access services to the public, thereby reducing consumer choice,” the bill states. Although it passed Tauzin’s committee, the bill has drawn strong opposition from much of the industry, and its prospects for passage in the Senate are considered slim. Last month, the Computing Technology Industry Association — a lobbying outfit that represents AT&T, Cisco Systems, Lucent Technologies and hundreds of other high-tech firms — circulated a letter to members of Congress opposing the legislation. “Make no mistake about it,” a CTIA public policy manager wrote in the letter, “these initiatives are being driven by a few incumbent local phone monopolies. … Please do not attempt to fix what is not broken. Do not roll back the clock to the days of a monopoly-dominated industry.” The key now, according to Kennard and other proponents of increased competition for the Bells, is to vigorously enforce the provisions of the 1996 act that requires them to open their markets. Such “rhetoric” surrounding the Tauzin-Dingell bill, Kennard said Wednesday, is making it harder for the beleaguered CLECs to regroup and grow again. Related Articles from The Industry Standard: Report Shows Emerging Telecoms Making Headway British Telecom’s Rights and Wrongs BT’s Rights of Passage Copyright � 2001 The Industry Standard

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