Sue Nord, Sr. Director
Government Affairs
713 345-4196

----- Forwarded by Sue Nord/NA/Enron on 05/24/2001 04:53 PM -----

	Scott Bolton@ENRON COMMUNICATIONS
	05/23/2001 08:47 PM
		 
		 To: Sue Nord/NA/Enron@Enron
		 cc: Stephen D Burns/Corp/Enron@Enron
		 Subject: Summary of Evil RBOC Campaign

Sue, per our discussion earlier, I wanted to outline the latest on 
Tauzin/Dingell and the UNE proceeding at the FCC.  Over the past 2 days, 
Steve and I met with the staff of Sen. Wyden, Sen. Cantwell, Rep. Largent, 
Rep. Markey, and with Rep. Boucher.  Additionally, we attended an RGA forum 
on "broadband deployment" presented by Verizon and ATT, and  met with reps 
from Comptel.  We also spent some time (off the clock) with Aileen and 
Johnathan Hintzman w/ KDW.  From all of these sources, we came up with the 
following observations/takeaways:

The RBOCs have a very expensive, sophisticated campaign in place to reduce 
access to their high-speed networks (it is now generally accepted that this 
is the main thrust of their effort - not sec.271 relief for data),
This campaign has several facets - the Tauzin/Dingell bill, UNE Petition at 
the FCC, delay/refusal of UNE provisioning to CLECs.  The campaign's main 
themes are that the '96 Act was only to open local networks for voice 
competition, regulatory relief is needed for telcos to compete w/ cable 
monopolies, CLEC business plans are unsound unless they are facilities-based, 
and only use UNEs as a transitional method of entry,
Both the UNE Petition and the T/D Bill would effectively prevent the 
unbundling of ILEC network elements that are classified as "High-speed" or 
"broadband" - meaning wholesale access to any UNE beyond narrowband voice 
facilities would be denied.
Tauzin/Dingell is now on referral to the House Judiciary Cmte.  Judiciary has 
a relative short time to examine the bill (they were only referred the 271 
provision, not the whole legislation) and will then report the bill out with 
or without amendment,
According to Rep. Boucher, the anti-trust language of the Cannon/Conyers 
amendment (which would make unbundling/interconnection complaints against 
ILECs an automatic anti-trust violation) will not likely survive a full cmte 
vote and he believes the bill will go back to Commerce with little change,
Rep. Largent's office told us that they have not developed a floor strategy 
yet to attempt to defeat T/D when it gets to the full House, but they expect 
the final vote to be bitter and very close (probably in favor).
Our meetings with the Senate suggested that they are not likely to take up 
T/D.  We believe that is still the case, especially in a Democrat-controlled 
Senate (which should be determined very soon).  This would make Sen. 
Hollings, an ATT ally, Commerce chairman,
On the regulatory side, Comptel and KDW were both taking the UNE Petition 
very seriously,
Neither Steve nor I are confident that Comptel will carry a very effective 
argument this time - they are pursuing economic and network data that, in the 
end, will not make a convincing argument and will not have significant buy-in 
from other Comptel members.  Their focus on backbone network maps, IRUs, and 
deconstructing the USTA competition report is not constructive,
KDW is leading a group of small CLECs and has invited our participation.  I 
think that we should participate in the effort but hold off in determining 
whether to file our comments with them or separately until we have a better 
feel for the focus of their argument and if we can provide a unique 
perspective,

Based on the above, Steve and I have developed this prognosis:

T/D will likely fail to move in the Senate, though the RBOCs may try some 
different tactics than in the House.
Failing a legislative remedy, the RBOCs full energies will then focus on the 
FCC.
It is very difficult to say how the new commission will rule on the various 
regulatory proceedings there.  However, Congress can send strong cues to the 
commission and opportunities to push back the RBOCs will be available, 
especially if T/D fails in a big way.
The threat that these attempts by the RBOCs pose to EBS is paramount.  
Considering that the RBOCs will likely continue to gain 271 approvals in the 
states, the ability to have below special-access pricing for local 
connectivity will mean the success or failure of bandwidth trading, since 
there would be no way to compete with the Bells on end-to-end bandwidth 
services.

I hope this is helpful as you prepare your download to Ken/Kevin/Jim.  Please 
let Steve or I know if you have any questions or would like additional follow 
up on any of these points.  Thanks