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Tauzin, Powell Talk Regulations, e911 at CTIA

NEW ORLEANS -- The dangers of regulation in the wireless telecommunications industry and the issues surrounding the roll out of e911 were among the first items on the agenda at the CTIA Wireless 2003 show in New Orleans Monday, as CTIA President and CEO Tom Wheeler brought out U.S. Rep. Billy Tauzin (R-LA), chairman of the House Commerce Committee, and then FCC Chairman Michael Powell for discussion of the industry's concerns.

The Cellular Telecommunications & Internet Association (CTIA) maintains that wireless is a completely different paradigm than the centrally switched telephone system that the U.S.'s telecommunications regulations were designed to deal with, and both Tauzin and Powell agreed that regulatory policy must emerge from the shadow of Theodore Vale, who as chairman of AT&T won a monopoly on telephone service from the U.S. government by suggesting that it could regulate the business.

At the time, when telephone service depended upon central switch offices, Wheeler said the concept made sense. But these days, he said, with telecommunications taking the form of a pervasive cloud in which the local switch is obsolete, the regulatory structure becomes an inhibitor to innovation and growth.

"How can a regulatory structure that was designed for a centralized switch possibly be relevant to a world of individual hubs?" he asked.

Tauzin agreed, saying that today's technology "requires policy-makers to rethink the concept of telecommunications."

Increasingly, Tauzin noted, individual states have taken it upon themselves to regulate -- a movement which he claimed stifles growth and innovation while also allowing the states to levy hidden taxes. One example is California, which now requires that all new services which have the potential to impinge on the privacy of citizens must be approved by the state before deployment. But Wheeler noted that all digital services leave a digital footprint, bringing them under those regulations.

Tauzin said the federal government can preempt state decisions, and indicated his willingness to bring those powers to bear, but also noted that such preemption can easily become defacto regulation.

"I suggest you move aggressively on your own code of conduct," Tauzin said, pointing to television broadcasters, which implemented a rating scheme on its own initiative. Tauzin said that such proactive measures can blunt the momentum of both federal and state government in regulation.

Powell agreed to the need for change in regulatory policies, noting that the government needs to take the lessons of the Internet revolution -- an industry which grew at a tremendous pace uninhibited by government interference -- to heart.

"The regulatory policies need to take on the same sort of radical change," he said. "Let innovation be the central focus of policy." He added that government can do something other than making rules, it can be a leader and coordinator.

That's what he thinks the e911 initiative -- which seeks to implement location-based services which will allow emergency responders to pinpoint the location of a caller on a mobile phone -- requires from the government. He said the various parties -- including regulatory bodies, carriers and emergency response officials -- will meet on April 29th to hash out what it takes to implement the long delayed initiative.

It cannot be acceptable to say 'we won't have 911, or it won't be ready for seven years,'" he said.

Both also spoke of the need to free spectrum for use in the market. "We're going to try to get new spectrum for 3G into the marketplace," Tauzin said.

Powell agreed, noting that a recent report by the FCC found that most spectrum goes unused most of the time, though spectrum allocated for cellular, PCS and Wi-Fi is extremely efficient.

Powell suggested new technologies will capitalize on that fact to bring efficiencies into the marketplace that will allow the use of wasted spectrum. He also suggested that a new spectrum management scheme will be much more flexible about how spectrum is used, allowing the market to dictate what uses spectrum is put to rather than hard and fast rules.