Powell Reiterates Plans For 1996 Rewrite

At the broadband technology summit conducted by the U.S. Chamber of Commerce, Michael Powell said that the FCC needs to ensure that the Bell phone companies make profits on their broadband buildouts.

by Jim Wagner of internetnews.com [May 3, 2002]

The Federal Communications Commission is bent on rewriting the rules established by the Telecom Act of 1996, a necessary change for broadband to move forward, said Michael Powell, the agency's chairman, to a group of U.S. businesspeople.

Speaking at the broadband technology summit conducted by the U.S. Chamber of Commerce, Powell earlier this week said the broadband revolution can move forward only if the rules that govern the industry's operations are revamped and universal.

His comments are in line with what many in Washington consider the "cure" for a relatively slow deployment of broadband. The Senate introduced a bill Tuesday, the "Broadband Regulatory Parity Act of 2002," which mirrors the FCC chief's comments.

The speech is nothing new for Powell, who has been struggling to convince consumers, competitive local exchange carriers (CLECs), and independent Internet service providers (ISPs) that less regulatory oversight of the major telephone networks is a good thing for the country.

"Any broadband regulatory environment must serve to promote investment and innovation," he said. "Substantial risk investment is needed to either upgrade legacy networks or to develop new networks to support broadband capabilities and applications."

To provide a safety net for networks taking the plunge from the analog world of cable TV and telephone services, Powell and fellow commissioners have adopted several notice of proposed rulemaking (NPR) initiatives to dramatically reduce the strictures for digital subscriber line (DSL) deployment and cable modem services.

In February, Powell launched his rewrite of broadband regulations with the redefinition of the term broadband ISP "an information service with a telecommunications component," potentially allowing incumbent LECs (ILECs) like Verizon Communications and SBC Communications to shut down independent ISPs as fast as you can say "Northpoint."

The end goal, according to Powell, is a level playing field for competitive technologies, with monopoly providers in each particular technology. The beef against FCC telecom policy has been that it favored cable networks over telephone operators by requiring competition in DSL without requiring competition for cable Internet providers.

SBC has been one of the most vocal critics of the FCC's current policy, saying current regulations are stifling its broadband deployment and keeping thousands of small businesses from business DSL service.

The carrier has touted the results of a Yankee Group report released Tuesday, which shows that DSL is an important, almost critical, function in any small business.

"DSL Internet access really provides the best combination of price, speed, and functionality for a small company," said Michael Lauricella, a Yankee Group analyst. "Small businesses are increasingly realizing how greatly the high-speed of DSL Internet access service can positively impact productivity, and ultimately, the bottom line."

According to the report, 90 percent of those surveyed found DSL costs were more than made up in employee efficiencies and that nearly 65 percent of that number would cut its DSL last from any cost-saving reductions necessary in an economic downturn.

"Sound regulatory policy should, where appropriate, harmonize regulatory rights and obligations that are attached to the provision of similarly-situated services across different technological platform," Powell said. "The convergence of industries, where advanced networks allow entities in traditionally distinct market segments to enter into each other's markets and into new similar markets, demands that we rationalize our regulatory regime to address these changes."

Powell's comments invited quick rejoinders across the industry. Said H. Russell Frisby, Jr., president of CompTel, "If adopted, the FCC's broadband proposal could give the Bell companies carte blanche to limit access to the network by competitive carriers, independent ISPs, and content providers. Such a deregulated monopoly would quickly result in fewer choices and higher prices for consumers."

Added Donna Sorgi, WorldCom Vice President for Federal Advocacy, "Only when the FCC fully and fairly enforces the existing rules can the broadband revolution reach its true potential."

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