Sen. Ernest “Fritz” Hollings, D-S.C., yesterday criticized the U.S. Telecom Association for “inaccurate statements” allegedly made by the association concerning Hollings’ broadband deployment legislation (S. 2448).

According to Hollings, the USTA stated that his legislation “heavily subsidizes the creation of government-owned networks.” He also accused the USTA of stating “if rural telecoms accept… loans, they [would] lose their rural exemption and become subject to regulations even more onerous than those imposed on the RBOCs.”

Hollings said the alleged statements are “totally inaccurate” because S. 2448 “simply does not take either of these actions.” The bill, introduced on May 2, would quicken the pace of broadband deployment and adoption, particularly in rural and underserved areas, by tapping monies from the existing telephone excise tax to fund low-interest loans and grants that could be used by carriers to build out their networks.

The legislation also would provide grants to universities and a variety of research and development laboratories with the goal of developing technology that would achieve transport speeds of 50 Mbps to 100 Mbps. In addition, the bill would establish pilot projects for wireless and other non-wireline broadband technologies for deployment in rural and underserved areas.

A USTA spokeswoman said the association has carefully reviewed Hollings' bill and stands firmly behind its previous statements.

“Section 201 of the bill clearly leaves rural telecom companies vulnerable to losing their rural exemptions with respect to remote terminals, fiber-optic cable or any loop into which these components are deployed if they use loan funds to deploy these facilities,” she said. “Section 206 plainly does not restrict state and local government use of the grants for deploying government-owned networks.”

The spokeswoman fired back at Hollings, alleging that he previously has acknowledged flaws in his own bill. She also said the large number of the rural telephone companies USTA represents believes the broadband parity legislation introduced by Sens. John Breaux, D-La., and Don Nickles, R-Okla., “is a much better approach to fair regulations for all broadband providers, especially in rural areas."

The Breaux-Nickles bill would remove one of the most controversial elements of the Tauzin-Dingell bill, which passed the House in March, by dropping the provision that would let Bell companies bypass the Section 271 approval process for gaining entry into data long distance.

In addition, Breaux-Nickles would leave it up to the FCC to determine, within 120 days of the bill's passage, how to sort out the details. However, while Breaux-Nickles would give the FCC the authority to determine which current regulation should stay in place, it also specifically prohibits the commission from adding new rules.

--Glenn Bischoff, Senior News Writer