RealTime IT News

Powell Rips FCC Delay on Connection Fee Reform

WASHINGTON -- Federal Communications Commission (FCC) Chairman Michael Powell warned his fellow commissioners today that they would eventually regret Thursday's FCC decision to further study intercarrier compensation reform.

After reviewing the issue for the last four years, the FCC is now seeking comment on seven reform proposals submitted to the agency by various telecom industry groups and alliances. Given the FCC's rulemaking procedures, any final decision made on the proposals is probably months away at best.

Powell and Commissioner Kathleen Abernathy bluntly said the time had come for action, not more study.

"Today, we act as timidly as ever in the name of dialogue and process," said Powell, who announced his resignation last month. "If you're looking for bold action, you're certainly not going to find it here."

The emergence of IP-based communications over the last three years, most notably Voice over IP , has put the FCC in a quandary over how to fit 21st-century technologies into a 70-year-old structure originally designed to regulate the then publicly owned telephone system.

The current system relies on per-minute connection fees that distinguish between different types of carriers and services. The distinctions roughly fall between local and long distance and wireline and wireless. According to the FCC these distinctions "often have no bearing on the cost of delivering services."

VoIP and the increasingly popular bundled, flat-rate communications packages offered by the incumbent Bells and cable companies further complicate the intercarrier compensation issue since they do not fit neatly into any regulatory regime.

"The problem is that technology is moving forward, and we are rapidly becoming, I think, irrelevant," Abernathy said. "It seems to me we are making absolutely no headway after four years and simply asking questions again is not the right approach for this commission."

Abernathy added, "If we do nothing we will find ourselves and our rules irrelevant because the new digital technology, combined with the power of the Internet, will continue to deliver lower cost, innovative ways to provide voice, video and data."

Commissioner Michael Copps, one of two Democrats on the five-person panel, took exception to Powell and Abernathy's comments.

"I don't agree with the assertion that we haven't made headway here," he said. "I think the dialogues that have been going on have made progress, have come up with new ideas, have brought people into the progress. So much of this is about process. Putting this proposal out in a neutral and open fashion is the way to do it."

Powell said by voting for further study, the FCC was "staying parked in neutral. I do believe we'll regret [this decision] because I believe technology is flooding into the room so quickly that I'm fearful that the compensation regime will be a result of chaos as opposed to judgment and forethought."

The new FCC request for further comment on compensation reform centers on four themes: the development of efficient competition, preserving universal service support, retaining technological neutrality and minimal regulations and enforcement.

"I wish we were moving forward today, but we're actually not doing a whole lot more than we did in 2001," Abernathy said. "This issue has been on our plate for a number of years. We have grappled with the complexity associated with intercarrier compensation. In 2001, we developed an extensive record and now we're asking [for more comments] again."

Powell called the intercarrier compensation issue the "most critical proceeding sitting in this commission. It involves a complicated set of compensation relationships that broke long ago. There is near universal consent among the industry and policy makers that this system is broken, has been broken and continues to be torn apart by the arrival of advanced and exciting new technology."

He was especially critical of those who want further study.

"I find it is fascinating that every time we are forced to deal with a new technology issue, we hear animated and pointed rhetoric ... that we should proceed on a unified compensation regime and how we need bold and effective action and we need it now," Powell said.

Powell also said he was disappointed the FCC decided not to act on two petitions involving rate disputes between local and long distance carriers.

"This commission bears an important responsibility to provide regulatory clarity to parties who have waited for years in intractable intercarrier disputes," he said. "I urge my colleagues to reconsider their positions and act upon the pending petitions ... expeditiously. These problems are not going to get any easier over time."