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http://dailynews.yahoo.com/h/nm/20011213/tc/congress_broadband_dc_2.html

Thursday December 13 5:32 PM ET
House Delays Vote on Broadband Until 2002

By Jeremy Pelofsky

WASHINGTON (Reuters) - The U.S. House of Representatives on Thursday dealt a
blow to local telephone giants by delaying until next year a vote on a
measure that would allow them to offer long-distance data services without
first opening their networks to rivals.

Dominant local telephone carriers like SBC Communications Inc. (NYSE:SBC -
news) and BellSouth Corp. (NYSE:BLS - news) have been pushing the
legislation for months arguing that the measure would accelerate the
deployment of high-speed Internet service using digital subscriber line
technology.

``The (House) leadership has decided to move the vote on the broadband bill
to a date certain after we return next year,'' Richard Diamond, a spokesman
for House Majority Leader Richard Armey, said in a statement. ``The likely
date would be March.''

The so-called baby Bells created from the 1984 breakup of AT&T have been
competing head-to-head against cable companies for lucrative high-speed
Internet access customers.

So far cable operators have been in the lead with 6.4 million subscribers
compared to 3.1 million digital subscriber line customers. Both services
cost about $50 per month.

``We are going to continue to work on this and continue to persevere,'' said
Susan Butta, a spokeswoman for Verizon Communications (NYSE:VZ - news), the
biggest local telephone carrier. ``We think it's very important to the
country and it will ultimately bring additional choices for consumers.''

The bill specifically would allow telephone giants to sell long-distance
data services without opening their networks to rivals as they must under
the 1996 Telecommunications Act.

Additionally, the so-called Bells could deploy data services using fiber
without having to sell rivals pieces of the network for the provision of
high-speed Internet service, known as broadband, as required for voice
services.

``We can't declare victory on this issue but it's a definite setback for the
Bells and their strategy and advancing their ability to drive out
competitors,'' said Jim Cicconi, general counsel for AT&T Corp. (NYSE:T -
news), the biggest U.S. long-distance telephone and cable company.

The bill would also establish milestones for the Bells to deploy high-speed
Internet service in hard-to-reach and rural areas.

On Wednesday, Armey had tentatively scheduled for Friday a vote on the
measure, which is sponsored by Reps. Billy Tauzin and John Dingell. There is
stiff opposition to the bill in the Senate, raising questions about its
chances of becoming law in its present form.

``This was simply a delay not a defeat,'' said Ken Johnson, a spokesman for
Tauzin, a Louisiana Republican. ``We have a firm commitment for moving the
bill to the House floor. We have the votes to pass it and we have the
champagne ordered.''

One person familiar with the situation said the delay came after some in the
Republican party expressed concern that a vote could shut off campaign
contributions from various sources. However, Johnson said the delay was
because lawmakers wanted to go home after a long week.

Lobbying against the measure were long-distance telephone giants AT&T Corp.
(T.N) and WorldCom Inc. (Nasdaq:WCOM - news)(Nasdaq:MCIT - news).

Sen. Ernest Hollings, the South Carolina Democrat who chairs the powerful
Senate Commerce Committee, has said he does not support the measure,
opposition that makes slim the legislation's chances of becoming law.

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