DSL Prime: Please Talk to Kevin Martin

FCC Comissioner Kevin Martin has asked for comments from those in the business. Answer his call and contact the FCC. In other news—surely Tauzin could dangle some lure to get Bell service in Louisiana?

by Dave Burstein DSL Prime [January 9, 2003]

Kevin Martin says "Your move"
Speaking publicly and inviting an open debate
FCC Commissioner Martin made a remarkable speech December 12, clearly and openly outlining the key issues in the process of decision, and giving his opinions. We all know how many policy decisions are made behind closed doors. The 1996 Telecom Act itself, according to Senator Hollings, was written by a group of lobbyists, and merely reviewed by the Senate Committee. Martin's recommendations included raising the rate of return accelerating depreciation in TELRIC pricing; deregulating new "fiber to the home" but not DSL or wireline DLCs unless they provided services more sophisticated than today's; removing switch unbundling requirements where some competitors have switches; that line sharing was not necessary where cable and DSL might compete; and other key issues. Martin concluded, "I therefore welcome your reaction, criticism, and suggestions. Your move."

This kind of invitation to public discourse is a model of open government. Ironically, he was lambasted both by those who disagreed and insiders who wanted to keep the details private. "Martin's not the Chairman" was a comment from inside the FCC. The insiders were particularly afraid because Martin is the crucial swing vote on most of these issues, and on some is much closer to Copps and Adelstein than he is to Powell. Many of these issues are not simple "right wing/left wing"as Martin once said to me.

Perhaps most interesting is Martin's judgment "if a sufficient number of alternative providers are present, the Commission would assume that a wholesale market for switching is viable." That is dramatically different than what Dreazen and Young report Powell is putting through the FCC, a proposal that that would need UNE-P in most locations quickly. Presumably, "a sufficient number" would be at least 3 or 4 able to wholesale; that would apply to few locations, and would not be nearly as sweeping as the WSJ reported. Martin may have changed his opinion in three weeks. The pressure is enormous—imagine $21 billion riding on your decision. More likely, Powell is trying to push through something Martin hasn't agreed to. But that's why I applaud Martin's speaking out—and question Powell's "quiet decisionmaking."

Personally, I profoundly disagree with many of his conclusions. In particular, following Alfred Kahn, the "Great Deregulator", I believe you don't have an effective market until you have at least three or four viable players. So line-sharing must be protected, because a DSL/cable duopoly is inclined to rig prices near monopoly levels. I also don't think "potential competition" is an adequate substitute for a market, and much of his argument is based on the possibility of additional competition, not the reality of actual competition. Rising consumer prices as costs drop dramatically is strong evidence the market isn't working. I can't accept any argument we need less, not more, competition.

Billy Tauzin, call Duane Ackerman
BellSouth isn't delivering for Louisiana—and is threatening less
The PSC ordered BellSouth to stop shutting off DSL service to customers who switch telephony to MCI or others. BellSouth's Louisiana President William Oliver responded to AP BS "will halt investment in its high-speed Internet network if the ruling is not changed."

There's no technical or economic reason not to require line-splitting—BellSouth makes a profit selling DSL on the higher frequencies, and the only reason to refuse is to handicap the competition. The order is right, and Todd Wallack on the San Francisco Chronicle reports that California and other states are contemplating similar rulings. The FCC, in the Texas 271 ruling, gave the Bells clear permission to split lines. "We need to be vigilant to make sure customers have choices," said California PUC President Loretta Lynch to the Chronicle.

BellSouth in North Carolina has the most extensive DSL network of any state in the union, essentially every CO and two thousand remotes as well. DSL Prime called BellSouth "U.S. DSL Company of the Year" for that achievement. But despite Congressman Tauzin's massive support of the Bells, his home state is lagging far behind others. Any slowdown will put it even further behind.

Congressman Tauzin can solve the problem with a single call to Duane Ackerman. He should insist Louisiana be wired as extensively as North Carolina, or Tauzin-Dingell will stay in his committee.

Copyright 2003 Dave Burstein.
The DSL Prime Newsletter is reprinted with permission.

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