This month the House Energy and Commerce Committee will mark up a new telecommunications bill sponsored by its chairman, Rep. Joe Barton. Mr. Barton, a Republican, recently opined that a version of his bill should be signed into law by President Bush this year. In the Senate, the chairman of the Commerce Committee, Senator Stevens, plans to introduce and pass a telecommunications reform bill in short order, although he is less certain than Mr. Barton of its becoming law.

The open secret is that, despite Mr. Barton’s protests, the prospects of major telecommunications legislation becoming law this year are poor, certainly no better than the Cubs’ chance of winning the World Series.

Financial institutions that cover telecommunications have in recent weeks reported the details of these and other congressional bills. Why do rational financial institutions invest scarce analyst talent following legislation that almost certainly will not become law? Unlike baseball, where readers thirst for information about teams that are sure losers, congressional legislation is not just a spectator sport. Even unsuccessful legislation can substantially affect businesses. Investment analysts follow such legislation, and that is why they track the activities of Messrs. Barton and Stevens.

Here’s how even unsuccessful telecom legislation can affect companies. The legislative process serves as a barometer of national political interest and support. Hearings on one topic, such as the unbundling of cable services, demonstrated congressional interest and ultimately compelled cable companies to offer a form of unbundling, even without successful legislation. Similarly, other government agencies react to the political barometer of Congress rather than waiting for passage of legislation.

Both Messrs. Barton and Stevens have held many hearings on telecommunications over the past several months. These hearings have given business leaders an opportunity to present their pet issues to Congress, and in turn have given members of Congress an opportunity to express their sympathy – or lack thereof.

For example, Mr. Barton’s bill has many provisions, but the one that has attracted the most attention would have the federal government pre-empt state and local authority over cable franchises. Part of the paradox of American politics is that voters will go to the polls this November to elect Washington politicians committed to taking power away from the very state and local politicians whom the same voters will also elect in November.

The paradox is easily explained. In the legislative hearings, many powerful telephone company executives have voiced frustration with the local cable franchising process. While observing these hearings, state and local government officials see that relatively few members of Congress seem troubled by the prospect of federal pre-emption of the franchising process. These hearings become a barometer of political support in Washington for state and local governments, which today have remarkably little support, at least on franchising issues.

Sensing little support in Washington, state and local officials may be less willing to contest franchise applications and may ultimately become resigned to the shifting of franchising decisions from local to state government or even to the federal government. Local governments could suffer a crushing political defeat even though the Barton bill will almost certainly never become law.

Just a few years ago, the Tauzin-Dingell bill had much corporate and bipartisan support on Capitol Hill. It was named after then-chairman Billy Tauzin and the ranking minority member John Dingell. Their bill offered deregulation of broadband services. Those services have been largely deregulated, but without the benefit of the Tauzin-Dingell bill. It suffered the fate that befalls more than 95% of legislation and never became law.

Many businesses invested heavily in the Tauzin-Dingell bill through advertising and lobbying campaigns despite the fact it was certain not to become law. All the demonstrations on Capitol Hill convinced the Federal Communication Commission to do through regulation what Congress failed to do through legislation. Broadband services were ultimately deregulated by an FCC that was acutely aware of political sentiments in Congress.

The same may be true of telecommunications legislation in 2006. Some businesses are investing heavily in the hopes of favorable results, even without a new law. Mr. Barton’s challenge is to send clear signals and defuse partisan squabbles, which have already erupted. The smoke signs of Congressional political views are closely noted not just by investment analysts but also by government agencies at the federal, state, and local level.

A former FCC commissioner, Mr. Furchtgott-Roth is president of Furchtgott-Roth Economic Enterprises. He can be reached at hfr@furchtgott-roth.com.