Hearing of the Subcommittee on Telecommunications and the Internet of the House Committee on Energy and Commerce - Digital Future of the Unites States

Statement

Hearing of the Subcommittee on Telecommunications and the Internet of the House Committee on Energy and Commerce - Digital Future of the Unites States, Part VI: The Future of Telecommunications Competition

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REP. JOHN SHIMKUS (R-IL): Thank you, Mr. Chairman.

I'm going to ask Ms. Herda if she will respond to questions that I pose to her, and not jump in on questions that I don't pose to her. I've seen that frequently this morning. And I find that troubling and disconcerting.

And I'd like to start with Mr. Tauke. Another problem with really troubling with Mr. Markey was his comment about who owns what. So Mr. Tauke, assume my friend rents an apartment, and he's been paying rent for multiple years, a lot like a lot of members here.

Does he own that apartment any more than the customers who rent part of your network, or the last mile, as Mr. Markey made the assumption?

MR. TAUKE: I notice we pay the taxes on the network.

REP. SHIMKUS: It's very -- this is the key -- (inaudible) -- of telecommunications. This isn't -- if you pay rent on an item, do you own it? And I'm not partaking -- and the chairman of this committee is talking numerous times about when the federal government takes things, the federal government has to compensate.

Because you pay rent, doesn't mean you own it. Now there may be other ways to address this concern. But assuming that someone who pays rent owns the property that obviously struck a tough chord in a personal property rights member like I like to be.

Let me go to Mr. Tauke, Mr. Casto and Mr. Cheek. When -- and you tried to identify this before -- when you sell special access services to business customers, how much leverage do these customers have?

And Mr. Casto, why don't you go first. If you go briefly I have a couple of other questions.

MR. CASTO: They're really carrying the cards given the environment that we operate in today. And they're very sophisticated customers are well aware of their options, and they utilize those options, including the customers that are represented at this table when they purchase special access from us.

REP. SHIMKUS: Okay, Mr. Tauke?

MR. TAUKE: I will simply repeat what he said.

REP. SHIMKUS: And Mr. Cheek.

MR. CHEEK: Along the same lines. If you look at our territory in Florida alone, we have in excess of 24 active competitors in all of our -- I shouldn't say all of our Florida markets, the majority of our Florida markets.

So there is plenty of leverage in the marketplace, because it is a competitive marketplace.

REP. SHIMKUS: And I appreciate, you've been pretty quiet on the panel compared to the opening statements and stuff.

And let me -- I think the frustrating thing is, you know if we were in the old days of a monopoly, instead of seven people sitting up here we'd have one. Now comments have been made -- during the break I walked off the floor, I met with some constituents, and I kind of told them over the TV what we were doing. And he said, boy, I yearn for those old Ma Bell days. Talking about the frustration of dealing with billing and for consumers to have choices.

And I said, but you know if we were in the old mom and -- Ma Bell days, what would we have? We would have no cell phones. We would have no broadband. We would have no competition. And my fear is that people who yearn for the old days of a monopoly provider, you all are a perfect example of a competitive market, trying to deal in the arena that we have obviously -- there are some regulation still there, regulations that Mr. Tauke has mentioned, regulations that Mr. Forsee has mentioned.

And so my final point, based upon these questions: Mr. Evans, you talk about your triple play option. How much do you charge on that?

MR. EVANS: $79.

REP. SHIMKUS: The -- Mr. Rosenbalm, and I appreciate, because you're a -- you're a, you know, provider by the local municipality, correct?

MR. ROSENBALM: Correct.

REP. SHIMKUS: What does yours cost?

MR. ROSENBALM: Around $80.

REP. SHIMKUS: Around $80. I need y'all to deploy to my area. I have the triple play -- that's one thing about this committee too, we all deal with these services that we're fighting about, right? And right now mine is $99.97 for my phone, voice, and broad -- my video, broadband and home phone services, which -- but I have other options too. You know, AT&T is trying to roll out to get in my neighborhood.

So I would ask Mr. Rosenbalm because of it's a utility, does -- does the other aspects of the utility help subsidize rollout? Or was there any government role, development, or state development loans that helped you do this?

MR. ROSENBALM: There were no loans from the state. We launched our network in Bristol itself with bond issue revenue backed from the venture. Since then we have received some EDA grant funding to expand -- expand into southwest Virginia, as well as the Virginia Tobacco Commission has extended funding.

REP. SHIMKUS: And I just want to applaud that. I mean I have 30 counties in southern Illinois, and I think going that direction where it's more difficult for other people to provide is a good answer.

Thank you, Mr. Chairman.

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