The head of the Federal Communications Commission (FCC) continues to see the
government in a hands-off position for the most part when it comes to
regulating the telecom industry.
Chairman Michael Powell reiterated his belief in the power of
innovation over regulation to a crowd of hundreds of industry manufacturers
and providers attending this year’s Supercomm trade show in Chicago Tuesday.
“I think the [telecom] industry will be hot next year,” he said. “With the
economy recovering, there will be a dramatically increased deployment of
broadband this year and as demand grows, the infrastructure that supports
broadband will grow with it.”
Powell himself has drawn a lot of heat from critics for his oft-spoken and
long-standing
criticism for the 1996 Telecom Act, a piece of legislation that tried to
give start-up telephone and DSL
with incumbent carriers like SBC Communications and Verizon
Communications .
Powell pointed out the Act doesn’t take into account the new technologies
available today. With cable providers providing phone service and telephone
companies providing TV content and video on demand (VOD), the old rules
don’t apply.
Back when the first telecom regulatory measures were put in
place, he said, there was one piece of technology for one service, like the
PBX
But today’s networks are increasingly turning towards fiber optics, which
will radically change the environment. With the bandwidth fiber brings to
the table — up to 30 Mbps
1.5 to 3 Mbps — everything, from telephones to high-definition TV to PCs
will run under one technology.
“I don’t think people realize how revolutionary IP really is,” Powell said.
“The FCC does everything it can to stimulate new technologies. Regulatory
agencies are good at looking back at what they’ve done, but not looking
forward. We have an obligation to the industry [because] we indirectly
incubate new companies [with our decisions].”
A good example of that, he said, was SBC Communication’s
announcement Tuesday morning to invest $6.2
billion in fiber optic deployments to businesses and homes in their
coverage area in the next five years.
“Halleluiah,” was Powell’s first reaction to the announcement when asked for
a comment. “I watch all companies — whether it’s a local ISP or a large
company like SBC — and this is the type of investment I’ve been looking
for, so that the consumer has access to next-generation services.”
Critics, however, see the innovation and investments coming at the cost of
competition. With the likely
expiration of the UNE-P
Utility Commissions (PUC) set the rates competitors can access incumbent
telephone facilities — at the end of the year, it could spell trouble.
Ed Whitacre, SBC chairman and CEO, told Supercomm attendees his company
would not unilaterally raise the fees for competitors this year. He said
nothing about next year. It’s possible the $6 billion fiber investment
could be partially offset by increased fees to CLECs
already fighting a DSL pricing
war with SBC, which dropped its DSL pricing earlier this year.
Powell said that, for the most part, state PUCs are going along with the
expiration of UNE-P rules, but some are still clinging to the old
regulations and say they will fight to keep them in place.
“There are a handful of states that want more regulations, which I think is
a grave mistake,” he said, “a very grave mistake to the detriment of our
country.”
