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Hanging Fire With the FCC

Can the Federal Communications Commission (FCC) save the day? Many folks are expecting the FCC to make sweeping change to federal regulations so that RBOCs (regional Bell operating companies) will prosper and return the telecom industry to a steady, monopoly-driven state.

With telecom regulation the talk of the town (see The Other Powell Preps for FCC Vote, Senators Skeptical of Deregulation, and FCC Talk Boosts Lucent, Nortel), Light Reading’s paid research service, Optical Oracle, has prepared an entire report on the topic. Divided interests in the FCC are likely to prevent a huge shift in federal telecom policy -- though some incremental changes are likely to help the RBOC position, says the new Optical Oracle report, called "Fed Watch: U.S Regulatory Outlook," released to subscribers today.

The topic couldn't be more current. Next week, the federal agency come to a decision about current regulations for Unbundled Network Elements (UNE), which require incumbent carriers to provide competitors with low-cost access to their network infrastructures (see FCC Delays UNE Ruling).

This closely watched, and perhaps most volatile, of the issues is likely to be a thorny issue inside the FCC, says the Optical Oracle. The report, which profiles the five commissioners and handicaps their positions, concludes there is sufficient dissent to derail an effort to completely eliminate UNE -- perhaps by leaving the decision up to individual states.

But what about broadband access? There is mounting pressure for the federal government to do something to help spur broadband deployment.

This issue could bear more fruit for the RBOCs, concludes the report. FCC Chairman Michael Powell is seen as a major champion of regulatory “parity,” whereby similar services receive similar regulatory treatment. Right now, that doesn’t happen -- because cable broadband and copper-based DSL are treated in distinct nanners. Expect the FCC to switch the classification of ILEC DSL services as information services, from Title 2 to Title 1. That change would benefit ILECs by releasing their obligation to unbundle and share their DSL facilities with competitors. Expect a decision on this some time in the spring.

The full report, "Fed Watch: U.S Regulatory Outlook," is 17 pages long. It is available for sale here. A single-user subscription is $400. An annual subscription to the service, which costs $1,250, grants a user access to the report as well as the entire report archive of Optical Oracle Research.

— R. Scott Raynovich, US Editor, Light Reading

Editor’s note: Light Reading is not affiliated with Oracle Corporation
(We are, however, loosely affiliated with Nora Barnacle)

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optical_guy 12/5/2012 | 12:39:21 AM
re: Hanging Fire With the FCC I have to say that the statement in the article about there being "sufficient dissent" rather ignores the reality of what is happening at the FCC. Specifically, Martin (appointed by Bush) has formed a majority with the two Democratic commissioners in what I have a hard time believing is nothing more than a personal power struggle.

Martin wants to let the issues of UNE be decided by the states, those paragons of efficient professionalism many of whose legislature meets for a whopping 60 days or so. Yeah, that's the ticket....instead of a single illogical regulatory system we can now have 50 illogical regulatory systems.

Bush should adopt a policy on this issue and ensure that his appointees execute it or go home.

OG
Scott Raynovich 12/5/2012 | 12:39:19 AM
re: Hanging Fire With the FCC Good point. The report discusses this issue at length. In fact, I believe I wrote above that the UNE issue will most likely be handed to the states... which would be a lukewarm victory for the RBOCs
Consultant 12/5/2012 | 12:39:18 AM
re: Hanging Fire With the FCC Scott,

To the contrary, the states are the best outcome for the CLECs. The key states including Texas, California, Illinois, and New York are all pro competition.

The CLEC industry needs a few more years to get to critical mass in these states and make local competition irreversible. As the FCC has already reported, 25% of the DSO switched access lines in NYC are already CLEC serviced.

Once that is replicated in Texas, California and a few other states, the RBOCs are dead.

Consultant 12/5/2012 | 12:39:18 AM
re: Hanging Fire With the FCC Hogwash. The real reason you are complaining is that you are pro-RBOC. And your understanding of representative government is sloppy. The system is designed not to put robot representatives in place who mindless vote the positions of the voters or the person who appointed them, but rather use their expertise on issues.

The RBOC side has fundamentally lost because CLEC penetration will continue to grow and reach a point of no return. Once 20 million residential customers are on UNE-P, the grass roots support for UNE-P will be strong for the RBOC lobbyist and their money bags to overcome.

skeptic 12/5/2012 | 12:39:18 AM
re: Hanging Fire With the FCC Bush should adopt a policy on this issue and ensure that his appointees execute it or go home.
---------------
The best policy would be to do nothing and table
the whole issue. Other than the perceived need
for SBC and Verizon to crush their competition,
the whole matter is a waste of the FCC's
time.

SBC has wasted more money on television
commericals than these rules cost them.
Scott Raynovich 12/5/2012 | 12:39:17 AM
re: Hanging Fire With the FCC Hmm, let's see, who do you consult for?

Thanks for the feedback
rjmcmahon 12/5/2012 | 12:39:09 AM
re: Hanging Fire With the FCC Martin wants to let the issues of UNE be decided by the states, those paragons of efficient professionalism many of whose legislature meets for a whopping 60 days or so.

You raise an interesting observation. Why are so many State representatives term limited while the feds, like Rep. Billy Tauzin, are not?

Giving all our power to these entitlement oriented feds seems to be leading to a least common denominator model for our country. Are we all willing to let our country and economies trend to that of the great state of Louisiana?

Commissioner Martin deserves our respect for standing against continued economic deterioration and the foolishness of folks like Tauzin. Maybe Chairman Powell will have the courage to follow Martin's example?
rjmcmahon 12/5/2012 | 12:39:08 AM
re: Hanging Fire With the FCC The best policy would be to do nothing and table the whole issue. Other than the perceived need for SBC and Verizon to crush their competition, the whole matter is a waste of the FCC's time.

Agreed, sorta.

The FCC standing tall and enforcing the 1996 Telco act is best the way to give "regulatory certainty." Chairman Powell fool nobody when he claims regulatory certainity requires taking away UNE-P and yielding to deregulated, RBOC monopoly based pricing.

Many, many small and medium businesses have become dependent on UNE-P pricing for their business growth. Letting the RBOCs tax them even more will only add to our 2 million jobs lost over the last 2 years. (Not much "trickle down" going on by proxying the RBOCs as the tax collectors.)

PS. The great State of Louisianna has done this "proxy" tax collector trick many times before. Reading up on Tauzin will reveal his tendency to mandate others collecting taxes and directing the proceeds towards his pork projects.

Tauzin needs to learn that productivity, and not his pork, needs to be rewarded before our industry can rise to the levels where it belongs.
Ramu3 12/5/2012 | 12:39:07 AM
re: Hanging Fire With the FCC re: "Commissioner Martin deserves our respect for standing against continued economic deterioration and the foolishness of folks like Tauzin. Maybe Chairman Powell will have the courage to follow Martin's example?"

I wonder about this. Martin's alleged new position may be a calculated ploy to give the appearance that the final verdict is a fair and reasoned consensus via much internal debate. Martin's position and statements pre-xmas-2002 were nearly identical to Powell's.

Will Powell follow Martin's example? Powell will follow Tauzin's position to the end, because Tauzin nominated him. Mutual backscratching, 'ya know.
rjmcmahon 12/5/2012 | 12:39:07 AM
re: Hanging Fire With the FCC RBOCs which are forced to subsidize

If this were true, why are not the RBOCs going out of territory and using each others subsidized networks? It's a no brainer.

Maybe there is no subsidy? Maybe the RBOCs are just playing gatekeeper to a public infrastructure that has been paid for many times over? Maybe they don't have any idea on how to provide real services in a competitive environment?

PS. RBOC employees need to be very, very careful. Their execs know they have sinking ship on their hands. And unfortunately, they may not be such honorable people when that ship takes in more and more water. Diversify any retirement holdings and prevent them from Enron"ing" you.
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