The future of telecommunications is being framed by a select--and secretive--group of congressional conferees.. A joint House-Senate conference committee met behind closed doors for months, eclipsed by budget wrangling. No one outside knew what they were up to.
The doors swung open during the first week in February and the House and Senate within two days approved the bill by overwhelming margins--before the conference committee report was even printed. The Clinton Administration, funded heavily by telecommunications firms, quickly signed it into law.
Their work is rewriting the Telecommunications Act of 1934, which set up telephone monopolies for the benefit of universal service. The act of 1995 is supposed to open up competition for local service and establish regulations that attempt to cover the dynamic industry of today.
Broad themes of legislation emerged from congressional votes last summer. The question remains how well remote areas will be served, and whether they will participate in the so-called Information Revolution.
The basic debate revolves around defining universal service. Congress will dump that question to a panel of federal and state regulators that is charged with coming up with an answer in a year.
Does it mean that every home will have a telephone with a copper wire? Or does it mean that two-way audio-visual communication will become the standard for service?
Rural development advocates believe that the latter will be vital.
"At some point we've got to say that we're going to build a road everywhere that carries all kinds of traffic," said Paul Bowers, a college professor and telecommunications expert who is helping direct fiber-optic development for the state of Iowa.
The broad aims of the bill are these:
þ Establish a joint federal/state board to promulgate rules that will "reform" the universal access system. The board will adopt principles that require "quality services at reasonable, affordable rates" and offer access to advanced telecommunications. No one knows what "reasonable" is, nor is anyone saying what "advanced" means. Ultimately, those questions will be decided by state regulatory commissions.
þ States will have the power to require companies to provide advanced telecommunications at "reasonable and affordable" rates that are based on the provider's cost of doing business.
þ No provider will be required to provide service if it cannot justify the long-term investment.
þ Service must be provided for those things to which "a substantial majority" subscribes. That may mean just simple phone service, and not Internet service.
Companies that want to serve rural areas will be reimbursed for cost differentials by the Universal Access Fund. That federal fund currently is at about $750 million, a relative pittance when one considers the cost of burying fiber-optics along every rural route. It is fed by surcharges attached to every long-distance call you make.
States probably will have to kick in infrastructure development costs if they want rural areas to enjoy the benefits of contemporary telecommunications, Bowers says. Iowa, for example, pumped some $200 million into building a fiber-optic system that links all universities, community colleges and schools. Telephone companies fear that the network eventually will be used to compete for commercial services with them.
To this point, rural areas are still in the dust on the Information Highway. Cities of 10,000 population are told that services such as ISDN, which has been a standard for telecommunications in Europe for 15 years, will not be offered them in the foreseeable future.
That's because so few rural development groups have lobbied hard on the telecommunications bill. The phone companies have set up elaborate lobbying systems that masquerade under names of research groups. In fact, most of the fight in the conference committee has been over cross-ownership of telecommunications facilities among huge conglomerates.
How rural areas and small towns come out is uncertain.
Laura Hessburg, an aide to Sen. Tom Harkin, D-Iowa, senses that rural areas will be taken care of. "All of us from rural states are fighting like heck," she said.
Drey Samuelson, an aide to Rep. Tim Johnson, D-South Dakota, sees it differently. "It's going to be terrible," he said.
With all the attention focused on the budget debate, rural areas easily could fall through the cracks.
Two venerable Iowa packing plants changed hands recently -- one is bound for IBP and the other by a vertically integrated pork company.
Old Harry Wahlert must be turning in his grave. A half century ago he founded the Dubuque Pack, and was on the kill floor with the men to win their respect and admiration. Plus, he endowed the local Catholic high school and kept a small liberal arts women's college alive.
Subsequent Wahlert generations shut down the Dubuque Pack and reopened it as FDL Foods in Dubuque. Thus old union contracts were broken and more favorable terms were won by the company.
What goes around comes around. Hormel, which bought product from FDL, cancelled its pork contract. The Wahlert family said it would shut down the plant unless a buyer could be found. Farmland Foods sniffed around but said no. Then IBP came in.
It's not known where the United Food and Commercial Workers will fit into this new arrangement. The UFCW boss in town is cowed by the prospect of IBP, and won't speak for the record.
Before the kiddies took over, Dubuque Pack employed 2,000 meatcutters. Now the ranks are down to 500 with a base wage of $9.80 per hour. The union lamb is ready to lie down with the lion.
Lewis Anderson, former UFCW vice president for packing, told the Progressive Populist that UFCW negotiated "sweetheart deals" so as to stay out of IBP's hair. Half of IBP's pork plants are union, half are non-union.
Dubuque well could remain a union plant. However, IBP's non-union plants pay (starting at $6.50 per hour, base pay around $9 per hour) is the same as the UFCW shops. Except, the non-union plants get profit sharing; union shops don't.
"It's outrageous," said Anderson, who now runs a group called REAP that aims to reform UFCW from within.
Anderson, in turn, is termed a wayward rabble-rouser by UFCW faithful.
IBP is interested in developing a business in "further processing," or the packaging and development of a product line. It remains to be seen whether the world's largest meatpacker will roll out the good old Dubuque brand name.
MEANWHILE, SMITHFIELD Foods took over the John Morrell pork plant in Sioux City, Iowa. Smithfield is one of the Top 10 producers of hogs in America, and now has its sights set on being one of the top processors, too.
Iowa law prohibits corporate hog owners from owning packs, too. Smithfield gets around it by setting up separate operations for production and processing.
This is in the back yard of IBP, which claims to rely on independent producers for the bulk of its kill.