FCC's Michael Powell: Let the market do its job

CHICAGO'Federal Communications Commission chairman Michael K. Powell espoused his free-market approach to regulation at the SuperComm trade show this week, focusing on the problem of universal broadband access without offering solutions.

Powell sees the FCC as a steward of the communications industry as it transitions to a new, IP-based era. He said companies should not be burdened with unnecessary regulation that wastes resources.

'We have responsibility not to draw capital off of an innovative market,' he said. The FCC should work with the presumption that no new regulations are needed until that need has been proven, he said.

Powell cautioned that companies would have to adhere to existing regulations. 'The free market works, and if we catch you cheating, we'll have to kill you.'

But he offered few specifics about how the FCC would balance the needs of industry with the rights of consumers. He called the president's proposal to provide universal broadband access throughout the country by 2007 an ambitious but achievable goal.

He said the lag in providing high-speed network connections was 'intolerable and unacceptable,' but he had no suggestions for how the 2007 deadline should be met except to say that every type of wired and wireless connection should play a role: 'any layered network capable of IP.'

His most specific comments dealt with regulating the market for voice over IP service and RF spectrum management. Powell noted that a number of states are moving aggressively to regulate VOIP service.

'I think they're making a grave mistake,' he said. 'I'm trying to find out what the problem is that needs such a drastic solution.'

He did not address the issue of protecting traditional phone companies, now required by law to provide universal access to telephone service, from flexible competitors offering VOIP and other advanced services without a mandate to provide universal access.

Powell said management of the broadcast spectrum is out of date.

'The system for spectrum management we have used for 50 years might have been effective, but the clock has been ticking on that,' he said.

A broad range of personal communications applications means that radio and TV broadcasters and emergency services no longer dominate the market for radio frequencies. He called for a market-based approach to doling out spectrum, and for recovery of traditional broadcast bands now held by analog TV broadcasters by speeding the transition to more efficient digital TV.

Powell also criticized the Telecom Reform Act of 1996. He said it addresses individual media'such as broadcast, wireline telecom and cable television'without taking into account IP technology that cuts across these lines. But he gave no details about what changes should be made in the law.

At least one industry executive at the show agreed wholeheartedly with Powell on the need for change.

'I would agree it is time to rewrite the Telecom Act of 1996,' said Vinton G. Cerf, senior vice president for technology strategy at MCI Corp. and a founding father of the Internet. 'That act was not written with the Internet in mind.'

He said the Internet cuts across the vertical stovepipes of radio and television, telephones and cable. Current regulations give effective monopolies to providers of DSL and cable modem service without making provisions for extending these services to all consumers, he said.

About the Author

William Jackson is a Maryland-based freelance writer.


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