FCC's McDowell: I'm No Dropout

Representatives from two key regulatory bodies, the European Commission and the U.S. Federal Communications Commission (FCC) , spoke out on key topics in London today: the creation of a centralized European telecom regulator and the ongoing merger between AT&T Inc. (NYSE: T) and BellSouth Corp. (NYSE: BLS).

FCC's McDowell clarifies position
FCC Commissioner Robert McDowell, speaking at the FT World Communications conference in London, said he felt he needed to clarify his position when asked by Light Reading about the hiatus in the AT&T/BellSouth merger process.

Basically, McDowell isn't allowed to vote in the approval process for that merger because he used to work for the Incompas , an industry body that opposes the merger. That has left four FCC commissioners voting on the mega-merger, with two in favor and two against the deal as it is currently proposed. And that's a stalemate that is frustrating AT&T. (See AT&T Rages at FCC Delay.)

McDowell believes he has been misrepresented by many media outlets with respect to his situation. "Some of the press said I dropped out of the voting process. I say, I never dropped in!"

He says that because of the position of his former employer on the merger, the code of federal regulation means he is prohibited from voting on the matter in his first year as a commissioner -- a time period that ends on June 1, 2007 -- unless the FCC's general counsel rules that the public interest outweighs any potential conflict of interest, and requires him to vote on the merger.

"That hasn't happened so far," says McDowell. Does he think it might happen soon? "I can't comment on that."

EC mulls central regulator
The European Commission is considering the creation of a central telecom regulator that would have some jurisdiction over the 25, and soon to be 27, member countries in the European Union, says Martin Selmayr, a spokesman for the EC's Information Society and Media group.

The idea was first floated by the Information Society and Media Commissioner, Viviane Reding, at a meeting organized by the European Competitive Telecommunications Association (ECTA) last week. There, Reding, in talking about the future of wireless spectrum management in Europe, noted that the EC needs to "discuss the idea of a European spectrum agency or the integration of spectrum into the mandate of a possible future EU telecom authority."

Future EU telecom authority? Will the national regulators be retired and all control over telecom markets handed over to the EC?

Not at all, says Selmayr. He told today's conference in London that Reding is seeking "more coordination across Europe, and not to replace the national regulators."

But there's also a desire to help bring some of the EU members in line, as, while many countries are meeting their telecom obligations, some individual member states continue to breach basic rules set down by pan-European directives. (See EU Updates on Rulebreakers, EU Needs Broadband Push, and EU Praises Members.)

"A number of countries still don't have an independent regulator… [In some countries] the government tries to interfere in economic regulation. In some countries the regulator isn't staffed properly, or doesn't act quickly enough. These situations distort competition," says Selmayr. "We need to integrate national regulators into a more European framework."

And, of course, some EU member states just don't want to play by the rules. In Germany, for example, the government is planning to introduce a law that would grant Deutsche Telekom AG (NYSE: DT)'s new fiber-to-the-node and VDSL2 access network the status of "new market," putting it outside telecom regulation.

But, as Selmayr noted, there will be "no regulatory holiday" for DT's new network: "The EC has already warned Germany against this plan. It is not justified in the German market." Reding has said she would take "infringement proceedings" against Germany should the law be passed. (See Achtung! Regulators Force DT to Share.)

— Ray Le Maistre, International News Editor, Light Reading

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