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IP: Metcalfes Column Bashing Reed Hundt This Week in InfoWorld
From: David Farber <farber () cis upenn edu>
Date: Sun, 18 May 1997 19:28:57 -0400
From: Bob Metcalfe <metcalfe () infoworld com> My column in InfoWorld this week, FYI: InfoWorld / From the Ether / Bob Metcalfe May 19, 1997 FCC's Hundt takes a step forward, two backward with subsidies and taxes Federal Communications Commission Chairman Reed Hundt must see himself as Robin Hood. He robs rich urban business data telephone users and gives Internet access to poor schools and libraries (S&Ls). And Hundt is bucking too hard to be President Albert Gore's Secretary of Education. For now, Hundt's FCC has done little to de-monopolize the telephone industry's rapacious local exchange carriers (LECs). In Hundt's defense, he's not our only FCC commissioner. He's up against a 60-year accumulation of failed FCC regulations that have left, for example, T1 lines costing maybe 10 times more than they would if LECs got meaningful competition. (See "After steering clear of Microsoft's pathway, Ferguson takes on FCC," May 5.) And Hundt's hands are tied by Congress and the ridiculous "universal service" requirements of its Telecommunications Act of 1996. On May 7, Hundt's FCC cut $1.7 billion from the $25 billion paid by long-distance telecommunications providers to subsidize LEC monopolies. The long-distance telcos promise to pass these billions on as reductions in charges for long-distance telephony. Thanks, Chairman Hundt, for this step forward, even if the LECs soon file lawsuits defending their inflated monopoly profits. The FCC also just voted to spend $2.25 billion per year subsidizing Internet access for schools and libraries. Hundt is big on redoubling Washington's failing efforts in socialized education. With a "historic" bipartisan budget deal only recently in place, the Clinton administration had to find new off-budget federal moneys for education. Robin Hundt apparently thinks it's OK, when our children are at stake, to rob from telcos and their rich customers. What's worse, Hundt ignored my pleas to forward his subsidies directly to the S&Ls. Instead, the FCC voted to force Internet service providers (ISPs) to give S&L "discounts," playing into LEC hands by forcing ISPs to beg telco regulators for reimbursement. (See "Telco Empire strikes back with monopoly embrace and subsidies for schools," April 28.) Clever, but not appreciated, Chairman Hundt, this step backward. So then to pay for subsidized S&L Internet access, the FCC also voted for new charges on second telephone lines. Hundt calls these charges "reductions on subsidies" for second telephones, and if you won't swallow that, these charges are, Hundt says, less than 4 percent of the $40 Internet users pay each month for their second lines and to ISPs. Hundt's second-line charges are decried as "modem taxes" by Dennis Hayes and his Association of Online Professionals and by Internet father Vint Cerf at MCI, among others. Another step backward, Chairman Hundt. Since the Telecommunications Act of 1996, which was supposed to bring competition to local telecommunications, LECs have been merging. Bell Atlantic just had its merger with Nynex approved by Washington -- which won't let Staples buy Office Depot -- because the two neighboring telcos would not be competing anyway. And why not? Have the LECs agreed not to compete in one another's territories? Aren't such "horizontal" agreements illegal under Section 1 of the Sherman Act? And now it's rumored that Bell Atlantic and Nynex will lay off 10,000 people, triple earlier estimates. How are we supposed to take this news? Should we cheer because reduction in costs will reduce prices? Or should we lament the announcement because the LECs are supposed to employ lots of people -- a 60-year-old jobs program that has been inflating costs and marking them up for rich telco customers to pay? It's often said that Robin Hood in the 12th century, like Reed Hundt today, robbed from the rich to give to the poor. Fact is, Sir Robin of Locksley robbed from usurpers who oppressively taxed subjects of the crusading King Richard. When King Richard returned, Sir Robin joined him, ejected the usurpers, and ended oppressive taxation. I'm sorry, but Marxists just can't have Robin Hood. Reed Hundt is not Robin Hood when he taxes modems. He plays the Sheriff of Nottingham to Albert Gore's Prince John. Join me in opposing the FCC's new modem tax. We will not be alone -- see http://www.aop.org. See also http://www.fcc.gov. Send your complaining e-mail to Reed Hundt at rhundt () fcc gov. Write to your representatives in Congress. We need de-monopolized telecommunications. It may take a whole new batch of politicians to do it. So I wonder: Who will be our King Richard, and when's he coming back? Copyright =A9 1997 by InfoWorld Publishing Company ______________________________________________ ______________________________________________ Dr. Robert M. ("Bob") Metcalfe VP Technology, International Data Group InfoWorld Columns: www.infoworld.com Mail: metcalfe () infoworld com Telephone: 617-534-1215 ______________________________________________ ______________________________________________
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