IP: : Powell: Market should guide telecom changes

[David Farber <dave () farber net>]

> To: OpenDTV Mail List <openDTV () topica com>
> From: Craig Birkmaier <craig () pcube com>
>
> http://digitalmass.boston.com/news/daily/03/030801/fcc_telecoms.html
>
> Powell: Market should guide telecom changes
> FCC chief urges less reliance on law
>
> By Anthony Shadid, Globe Staff, 3/8/2001
>
> WASHINGTON - The government should rely less on the law and more on
> the market to guide changes that are remaking the telecommunications
> industry, from the Federal Communications Commission's regulatory
> role to rules determining which telecom companies have access to
> which markets, FCC chairman Michael K. Powell told industry
> representatives yesterday.
>
> Powell, whose Democratic predecessors brought a stringent
> interpretation to the law that often rankled the Bell companies and
> other big telecommunications firms, warned that the government should
> avoid intervening in the innovation of technology and overregulating
> a fast-changing market.
>
> ''In government and in markets, we're all standing right now in
> no-man's land,'' Powell told a luncheon of the US Telecom
> Association, which represents the Bell companies. ''We're standing
> where things go wrong.''
>
> His remarks, echoing themes he has touched elsewhere since assuming
> the chairmanship, were noteworthy mostly for their context: They were
> delivered to the group that has lobbied the FCC to take a more
> lenient approach to regulation and to relax the rules that bar the
> powerful Bell companies from entering long-distance markets.
>
> Telecommunications, an area that has grown more important with the
> rise of the Internet and wireless, is defined in large part by
> landmark legislation passed in 1996 that has come under mounting
> pressure in Congress.
>
> The law, sweeping in its scope, deregulated the industry to spur
> competition by encouraging smaller companies to take on the
> longstanding Bell monopolies in local markets. The law bars the Bell
> companies from expanding into long-distance service until they can
> prove they have given up those monopolies.
>
> So far, the FCC has permitted only two Bell companies to enter the
> long-distance business: Verizon (formerly Bell Atlantic) in New York
> and SBC Communications in Texas, Kansas and Oklahoma. Verizon's
> application to provide service in Massachusetts is pending before the
> FCC.
>
> The Bells have argued that the FCC has overregulated the market,
> barring them from expanding despite their moves to open the local
> markets. In the meantime, they have pushed for new legislation that
> would allow them to offer long-distance data transmission, separate
> from long-distance voice service - a proposal that has drawn sharp
> criticism from public interest groups.
>
> Key telecom players in Congress, including Representative W.J.
> ''Billy'' Tauzin, a Louisiana Republican who heads the powerful House
> Commerce Committee, have promised to reintroduce regulation making
> that possible. A similar measure was bottled up last session by
> Tauzin's predecessor.
>
> Powell suggested he would support such an approach, saying his agency
> had been ''overaggressive'' at times in applying the law.
>
> ''The market clearly has to be at the pinnacle of any government
> philosophy or policy,'' he said.
>
> Citing the California electricity shortage that stemmed in part from
> a poorly devised deregulation plan, Powell said the government risks
> making even bigger mistakes by trying to create a hybrid from the
> market and regulation. Better, he said, is to let the market form ''a
> dialogue between consumers and producers,'' mediating innovation and
> new technologies.
>
> ''The public interest works with letting the market work its magic,''
> said Powell, who served as an FCC commissioner before taking over as
> chairman.
>
> Critics of the plan, including US Representative Edward J. Markey,
> Democrat of Malden, have argued that smaller companies have no chance
> to compete if the Bells aren't forced to open local markets. Right
> now, they argue, that incentive is long-distance data transmission.
>
> While House support for a change in the Telecommunications Act
> remains likely, its fate in the Senate is less certain.
>
> ''It is going to be very difficult to move legislation to enactment
> absent a consensus and there's not a consensus here,'' said Andrew
> Jay Schwartzman, president of the Media Access Project, a Washington
> public interest firm that deals with telecommunications issues.
>
> Powell spoke in favor, too, of streamlining the FCC's regulatory
> process. Some big telecoms firms, including the Bells, have urged the
> FCC to relax its oversight of mergers and quicken its decisions.
>
> Powell cautioned Congress from pushing too hard, but agreed that
> reform within the agency was a priority. ''I am fairly and firmly
> convinced that there are very healthy things that the agency can
> do,'' he said.
>
> Anthony Shadid can be reached at >Anthony Shadid can be reached at ashadid () globe com.
>
>
>
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