New FCC Rules: 600 Pages?
That forthcoming morass of legalese may do little to clear up the uncertain regulatory environment, thus hampering broadband deployment. "It's absurd," deadpanned David Mould, Nortel Networks Corp.'s (NYSE/Toronto: NT) director of co-marketing and regulatory affairs.
Some background, as covered by keynote speaker, TechNet board member, and Anda Networks CEO Charles Kenmore: In May 2002, the U.S. Court of Appeals overturned the UNE-P rules set forth in the Telecom Act of 1996, which required incumbent carriers to unbundle parts of their networks, making them available to competitive carriers. The Appeals court then required the FCC to reissue those rules based on local market conditions by February 20, 2003. The FCC's February 20 preliminary ruling, among other things, said that the states should decide where unbundling should occur (see Powell Loses FCC Vote, Fiber Players Giddy Over FCC Ruling, and Will RBOCs Spend More on Broadband?).
The FCC's rules, all 400 to 600 pages of 'em, were promised in March. However, "we are still waiting for March 2003," Kenmore noted.
While the world waits, one thing is for certain: Broadband deployments are suffering from lack of a clear, stable set of regulatory guidelines. Competitive carriers can't afford to build their own local loop networks, and the costs involved with leasing incumbent facilities are up in the air.
So the FCC's rules, whenever they show up, may do little more than spark legal battles galore. "There will be 50 lawsuits in 50 states and one big one at the federal level," said Kenmore in his talk.
Where does that leave service providers who want to deploy broadband services? Kenmore again put forth TechNet's proposal of providing 100 Mbit/s to 100 million homes within 100 months as one way of pushing the industry forward. TechNet proposes that the whole thing be financed by a new form of 30-year U.S. Treasury bonds, which would fund the effort to the tune of $30 billion per year without burdening the Federal Treasury (see Charles Kenmore). The plan would work on a national level similar to the way the Utah Telecommunications Open Infrastructure Agency is using municipal bonds to fund local broadband deployments in Utah, Kenmore says.
Of course, in the panel following Kenmore's talk, it was pointed out that there are no service providers on TechNet's board -- which was perhaps meant to imply that the proposal is dead in the water without wide-scale support from carriers.
Fair point; but if there are no better alternatives, the U.S. will soon trail little countries like Austria and Denmark in the number of broadband subscribers per 100 people, Kenmore said. And if the panelists and audience here are stumped, wait 'til they take a few weeks to thumb through the coming FCC rules.
Is there a bright side? Perhaps. Mould, in fact, points out that since the FCC is willing to deregulate broadband, that might signal that they're willing to "take the cuffs off" regarding the deployment of Ethernet services.
More than once, panelists referred to last week's announcement that three top U.S. carriers had agreed on common technical requirements for fiber-to-the-home deployments as a hopeful development (see RBOCs Hungry for Fiber). Such industry cooperation, they say, makes it easier for regulators to do their jobs.
Recalling his days working for carriers, Kenmore echoed the mindset of many in the audience here. "I can work under just about any set of ground rules," he said. "But give me some predictability and consistency."
— Phil Harvey, Senior Editor, Light Reading