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Optical/IP

Calls for FCC Relief Get Louder

The Federal Communications Commission (FCC) received more pressure to modernize telecom regulations this week as BellSouth Corp. (NYSE: BLS) and others touted a new report all over Washington D.C.

The report, published by the U.S. Chamber of Commerce, claims that 212,000 new jobs would be created and $127 billion a year would be added to GDP over the next five years if telecom regulations were overhauled.

“The government needs to step aside so that markets and technology can step in,” said Chamber head Thomas Donohue, during a seminar organized by the Chamber that featured several telecom titans, including BellSouth CTO Bill Smith.

The Chamber, with its three million member businesses, is viewed as the voice of American small business.

BellSouth, a giant incumbent carrier with huge lobbying interest, was out promoting the Chamber's findings because the report -- "Sending the Right Signals: Promoting Competition through Telecommunications Reform" -- supports its position, yet comes from a different segment of the business community.

Bob Blau, VP of public policy development for BellSouth, says: “The Chamber’s concern is not the telecom industry. Their concern is business users and the U.S. economy.”

The essence of the Chamber's report is that the U.S. regulatory scene, while not directly responsible for the telecom recession, is indeed making the U.S. less competitive throughout the world. “It’s very difficult to ask a bunch of regulators without any technology training –- who are lawyers by profession -– to figure whether this policy or that affects a Lucent’s ability to compete with their counterparts in China or wherever," Blau says. “The best part of valor here may be [for the FCC] to get out of the way and let markets make those decisions.”

The study doesn't just assign blame, though. It makes six reform recommendations:

  • Phase out mandatory network sharing rules. This, while punishing competitors who rely on incumbent networks, will give the Bells an incentive to upgrade and build out their own networks.
  • Make 438 MHz of prime radio spectrum available for commercial wireless operators. This, the Chamber notes, will make wireless broadband a viable competitor to DSL.
  • Exempt high-speed cable modem and digital subscriber lines from common carrier regulations.
  • Exempt VOIP and other Internet services from state telephone service regulations.
  • Raise funds for Universal Service directly from general tax revenues, rather than from hidden costs that penalize telecommunications competition and the growth of network services.
  • Distribute Universal Service funds directly to targeted consumers, rather than with payments to phone companies.
Those specific reforms, the report says, could generate as much as $58 billion in additional capital spending on networks by industry sectors.

BellSouth CTO Smith says the current regulatory framework is impeding his company’s ability to deploy fiber-to-the-home and broadband-on-demand services. "Furthermore, voice over IP is an excellent example of a technology that has far outpaced the obsolete regulatory framework in the U.S."

Speaking of VOIP, the FCC faced pressure on a second front this week as U.S. Rep. Chip Pickering (R-MS) and 61 other members of Congress delivered a letter to FCC chairman Michael Powell calling on the Commission to declare VOIP an interstate medium that's not subject to state and local regulations.

One common thread between the Chamber's report, the Bell's lobbying, and the VOIP-loving Congressmen is that time is of the essence. All time spent arguing for regulations -- or phasing out the existing rules -- is simply extending the lead other nations have in communications.

“If somebody were benefiting from this regulatory morass it would be one thing," grouses BellSouth's Blau. "But they aren’t -- at least not in this country. The people benefiting are our competitors in Asia and elsewhere.”

— Gale Morrison, special to Light Reading

Budisa 12/5/2012 | 1:11:57 AM
re: Calls for FCC Relief Get Louder First, the US Chamber of Commerce report is not a "government report" as the article claims. The US Chamber of Commerce is a privately operated, privately funded organization that lobbies the government for business interests. Claiming this report is a government report is either bad wording in the article, or sloppy reporting.

Second, much of the report's information, at least as it pertains to spectrum is quite old and outdated. For example, the reports authors cite data that 438 MHz of spectrum has been "left on the table" and prevented from being used for broadband services due to outmoded rules. The basic idea of idle spectrum is right; there's plenty more the FCC could do. The lion's share of that 438 MHz figure, however, comes from the 190 MHz or so of MDS/ITFS spectrum in the 2500-2690 MHz band that has labored for years under a byzantine set of rules limiting service. In a major reform effort adopted over the summer (well before release of the Chamber's report), however, the FCC basically freed up the vast majority of that 190 MHz of that spectrum for broadband use. To reflect the newly available spectrum, the FCC even changed the name from MDS (Multipoint Distribution Service) to BRS (Broadband Radio Service). That spectrum still has to deal with a swath of spectrum in the middle used for the Educational Broadcast Service (EBS, formerly ITFS), but the Order represents a major and enormously important step forward in moving a huge chunk of the 438 MHz of "idle" spectrum into productive use.
optical_man 12/5/2012 | 1:11:56 AM
re: Calls for FCC Relief Get Louder Alchemy guesses:
What the Chamber wants is for wealthy urban/suburban households with broadband connections and corporations with direct internet feeds to be able to opt out of 911 and universal services by going with VoIP. This means that rural people and poor people will end up funding 911 and universal access.

OM responds:
Alchemy, I'm poor and live in a shack. I want to opt out of 911 and universal access.
I'll keep my wireless broadband service that I get out here in the sticks, and put Vonage across it.
I had no idea my Rich Urban/Suburban brothers and sisters wanted out of 911 and Universal fees as well!?!?!
Looks like rich AND poor want out of this.
Let's petition the FCC to limit regulations on Service Providers.
Uh, wait, I just ran across some sort of CHAMBER report that says the SAME thing.
alchemy 12/5/2012 | 1:11:56 AM
re: Calls for FCC Relief Get Louder Let's see if I can get the HTML in the right places...

Exempt VOIP and other Internet services from state telephone service regulations.

The biggest issue I see here is that the 911 infrastructure is a state function typically funded by taxing telephony at the state level.

Raise funds for Universal Service directly from general tax revenues, rather than from hidden costs that penalize telecommunications competition and the growth of network services.

I'd much rather have the 60% of Vonage customers who actually ship their phones overseas fund domestic universal access.

Distribute Universal Service funds directly to targeted consumers, rather than with payments to phone companies.

And how does this encourage providers to enhance infrastructure in rural areas? Personally, I think universal service should be expanded to broadband access. In this day and age, it's a severe penalty to live somewhere that doesn't have broadband access.

What the Chamber wants is for wealthy urban/suburban households with broadband connections and corporations with direct internet feeds to be able to opt out of 911 and universal services by going with VoIP. This means that rural people and poor people will end up funding 911 and universal access. I'm usually one to take the libertarian position but I don't believe the very small 911 and universal service taxes are doing anything to slow down VoIP and there's clearly a public good in funding the 911 and universal service systems.
alchemy 12/5/2012 | 1:11:56 AM
re: Calls for FCC Relief Get Louder Exempt VOIP and other Internet services from state telephone service regulations.

The biggest issue I see here is that the 911 infrastructure is a state function typically funded by taxing telephony at the state level.

Raise funds for Universal Service directly from general tax revenues, rather than from hidden costs that penalize telecommunications competition and the growth of network services.

I'd much rather have the 60% of Vonage customers who actually ship their phones overseas fund domestic universal access.

Distribute Universal Service funds directly to targeted consumers, rather than with payments to phone companies.

And how does this encourage providers to enhance infrastructure in rural areas? Personally, I think universal service should be expanded to broadband access. In this day and age, it's a severe penalty to live somewhere that doesn't have broadband access.

What the Chamber wants is for wealthy urban/suburban households with broadband connections and corporations with direct internet feeds to be able to opt out of 911 and universal services by going with VoIP. This means that rural people and poor people will end up funding 911 and universal access. I'm usually one to take the libertarian position but I don't believe the very small 911 and universal service taxes are doing anything to slow down VoIP and there's clearly a public good in funding the 911 and universal service systems.
DCITDave 12/5/2012 | 1:11:53 AM
re: Calls for FCC Relief Get Louder budisa,

good catch on the wording... the report isn't a government report. editing error. we'll fix.

ph
fgoldstein 12/5/2012 | 1:11:52 AM
re: Calls for FCC Relief Get Louder The Chamber is hardly nonpartisan. It's essentially parroting the Republican Party line, which is to say the Bell line. There's nothing they want so much as a deregulated monopoly.

This, of course, is very, very bad for Small Business, whose telephone rates will rise. "Forced sharing" of switches has led to a plummeting of "zone" usage charges, which were a profound tax on small business -- it often costs more to call your local customer 15 miles away (on the ILEC tariff) than to call your supplier in Hong Kong! But UNE-P is based on cost, not tariff, so it provides an out. The ILECs hate that. The Chamber's willing to let VoIP be the out -- technologically-biased regulation, almost never a good thing -- and the Bell's know that it's not really a good substitute.
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