While sex on television may get more headlines for the FCC, its more important work may be the most arcane: telephone regulation. But it’s not without drama–the Commission is scheduled to vote on its new, improved unbundled network element rules this Wednesday. All reports indicate the debates within the FCC are intense, and no one really knows what the final order will look like. The good news is that the rules will almost certainly be scaled back (as all but ordered by the D.C. Circuit).
But how much? Here the question gets fuzzy. On some important issues, the indications are not good. For example, the market for “high-capacity” loops is one of the most competitive in the industry–with Bells outpaced by CLECs in many areas, and even being challenged by cable companies. Yet rather than declare success and sweep controls away here, the commission is looking at rather timid relief. UNE requirements would not only be lifted in areas where the density of lines is enough to support competition, but where there is a certain number of
actual facilities based competitors. The problem, of course, is that this could be a self-defeating prophecy, as the availability of cheap UNEs discourage others from putting facilities in those areas. Perhaps worse, the test could be applied on a builing-by-building area.
In other words, downtown areas would be examined building-by-building to see whether there are competitors lines coming in. This seems a recipe for a regulatory quagmire–with CLECs and LECs fighting over buildings one at a time at the FCC and in the courts over which has whose lines installed. One imagines platoons of FCC officials digging around in basements on the lookout for stray wires and telltale circuits.
Instead of this Fallujah approach, the FCC should lift UNEs in areas where competition has been shown to be economically possible–perhaps based on line density alone, then get out of the way.
Using a computer makes a kid less able to compute. Or so one study says. An article in The Register reports on a study that finds students who use computers in school do worse than their computer-less peers in math and reading.
From the article: “The researchers suggest two theories to explain their findings. One is ‘ability bias’ – that it might be that teachers do not want lower-ability students to use computers. The other theory proposed is that students who use computers frequently do so at the expense of traditional learning methods.”
This is from the FCC’s page on the E-rate (the Gore tax, the part of the universal service tax for school and library technology funding):
“Welcome to the FCC’s informal education page. Technology has great power to enhance education. The FCC is working to bring every school and library in America into the information age. Join the dialogue to help spread the benefits of technology to schools and libraries nationwide.”
Perhaps the benefits of technology are not as great as people or the FCC think.
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Congress Daily (subscription-only site) is reporting that the Rev. Jerry Falwell and other television evangelists are opposing “a la carte” regulation (per-channel pricing) for cable and satellite television networks. Falwell, president of the Old Time Gospel Hour, said, “Though well-intentioned, the fact is that a la carte would threaten the very existence of religious broadcasting and the vital ministry conducted over the television airwaves.” The statement was released by the Faith and Family Broadcasting Coalition.
I always knew God was on our side when it comes to multichannel video regulation. From my old Catholic school days, I think I remember something in Deuteronomy that said, “The LORD your God goeth before you, he shall fight for you, and he shall strike down any wicked attempts by Cesar to tinker with channel tiering or pricing on cable or satellite video systems.”
Amen! Praise be the maker. God hates cable regulation.
(For a more serious treatment of this issue, see this. In the meantime, you regulators out there should go read your Bible. I’ve heard there’s some language in the New Testement about the evils of taxing the Internet.)
If you want to know just how screwed up America’s universal service system is, take a look at this excellent report in today’s USA Today.
Author Paul Davidson documents some of the waste and abuse associated with the system and highlights just a few of the rural carriers that milk the system for all it’s worth.
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Like some regulatory Freddy Krueger, it looks like the FCC’s UNE rules just can’t be killed off. Earlier this year, it looked like the rules were doomed when the D.C. Court of Appeals struck down the regs–which require telephone companies to lease network elements to competitors. And only last month, the Supreme Court turned down requests to review the decision. It was widely assumed then that the rules, if not eliminated entirely, would be reduced to a minimal level. Recent news reports, however, now indicate that the Commission may in a few days adopt new rules that retain forced access requirements in certain circumstances, if there is not sufficient competition among telephone companies in a given area. That sounds reasonable, except that “competition” may be defined in an extremely narrow way–perhaps on a block by block basis. Thus, for instance, if there are a slew of competitors offering service on K Street, but none on L Street, the rules would be retained for L Street (even if competitors could easily expand into neigboring areas). Surprisingly, the new rules are being pushed by Chairman Michael Powell, usually seen as key defender of deregulation. We’re still awaiting details on what exactly the new rules will provide, but right now it looks like the UNE horror story will continue for some time to come.
Today the FCC told state public utility commissions to back off – it announced its ruling (see press release as ruling text is not yet out) that marks the beginning of the process for telecommunications regulatory reform. A unanimous FCC ruled that VoIP is not subject to traditional state regulation.
There still remains much to do before we have coherent telecom law. What federal rules will apply to VoIP is still an open question. The FCC’s ongoing IP-Enabled Services Proceeding will determine whether VoIP services are an “information service” or a “telecommunications service” under current law.
At the very least, this ruling answers the question of “who decides.” Commissioner Copps, in his statement, downplays this ruling. But don’t believe him. This is a good start toward the recognition that a national industry deserves an institution accountable to national interests. This is a win for federalism, the principles of which recognize that federalism is not just “state rights” but is a consideration of what institutional arrangement will best serve the national interest over time. This is a win for consumers, although I envision that so-called consumer “watchdog” groups will gripe about this decision. These same groups bemoan the fact that the U.S. is slipping in the per capita penetration of broadband subscribers. But perhaps, just perhaps, one of the reasons (and there are many) for high penetration rates in Korea and Japan is that they don’t have 50 state PUCs trying to run the show!
Of course, states have other ways to insert their noses into VoIP under the guise of “consumer protection” and social services like 911.
The universal service tax on long-distance calls is expected to increase. The Wall Street Journal reports that the Universal Service Administrative Corp. will ask regulators to increase from 8.9% to 12.5% the percentage of long-distance revenues that phone companies must hand over to the universal service fund. I’m not happy to hear this, and I suppose the USAC is just doing its job, but this increase highlights just how bloated this creature of the 1996 Act is becoming. But I’m truly becoming more and more incensed at the way that politicians are playing the “rural” card in telecom policy.
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Here’s yet another another article documenting the growing substitution of wireless for wireline services in America and across the globe. A new Yankee Group report says that 6 percent of households have now “cut the wire” entirely and gone wireless for all their communications needs.
The Yankee report notes that the wireless-oriented households are skewed to urban, young and single users. That’s not surprising, but I’ve seen plenty of anecdotal evidence that people in rural communities are making the leap to wireless as well. As wireless systems become more robust and reliable in those rural communities, this revolution will really start to pick up steam.
Meanwhile, back in Washington, the regulators continue to regulate as if we all still live in a one-wire world dominated by monopolists. Just silly.
“The Commission is not simply considering minor adjustments to specific regulations–the Commission is considering the future of electronic and optic communications for many years to come” – FCC Chairman Michael Powell.
Does this statement scare anyone?
Powell said this at the Fall Voice on the Net Conference 2004 in Boston yesterday. He said it in the context of streamlining regulations from the quilt of 51 different state regulatory bodies. One unified regulatory body for VoIP is good, right? (here’s an article on the speech)
Powell’s “patchwork” argument has benefits, but is also an excuse for FCC “oversight” and “involvement.” Shouldn’t this be handled by Congress, where there could be simple legislation banning states from interfering with VoIP. Whoops, there is – and it got hugely bloated.
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AT&T is cutting another 7,000 jobs this quarter. Combined with earlier cuts, this means the once-proud king of communications will have cut 20% of its workforce this year. They have also bailed out of the residential phone market entirely.
In a piece earlier this year, I discuss how and why the end is coming for the company. I try to make it clear that, despite claims by AT&T that the regulators did them in, the company made a series of strategic business blunders over the past few years that sealed its fate. I received some very interesting responses to this piece, including a number of letters from AT&T employees largely agreeing with me that management had driven the company into the ground. Others bitterly disagreed with my analysis and held onto the view that public policy screwed them over. Anyway, read my piece and tell me what you think.
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.