FCC Chairman Michael Powell |
You can't blame a general being indignant when his troops race off in the other direction. Such was the fate of FCC Chairman Michael Powell.
The son of the one of the world's most powerful men -- Secretary of State Colin Powell -- the FCC czar watched a coup unfold this winter as one of his underlings took the top regulator's telephone policy in an entirely different direction than Powell had envisioned.
The result: The regulations granting AT&T Corp., MCI and other local phone resellers access to the Bell networks at discounted rates will stay until state public utility commissions -- or the courts -- say otherwise.
Having to dissent from the majority -- a rare circumstance since FCC chairmen typically control the direction of policy -- Powell blasted the decision that upheld the resale platform, UNE-P, and eliminated line-sharing requirements that allow competitive broadband providers to lease the high-speed portion of the Bells' copper loop.
"Although we made notable strides in the area of broadband infrastructure deployment, the commission chose a course in some of its decisions that will cause further unrest for the industry with the ultimate loser being the American public," Powell said in his dissenting remarks the day of the Triennial Review order.
The decision, the chairman added, "is a gross step back from facilities-based competition."
"How could we expect a CEO to look at his board of directors with a straight face and explain a desire to expend capital on equipment when it could be rented for next to nothing?" Powell went on to say the UNE-P decision is riddled with flaws that won't hold up in the courts and will alienate droves of investors. FCC Commissioner Kathleen Q. Abernathy was the chairman's lone supporter.
"In a regime that allows for unfettered and unreviewable state discretion, one can only assume that the majority has an affinity for UNE-P, which in turn can only suggest that the commission for the third time has adhered to a 'more unbundling is better' approach -- an approach that twice has been rejected by the courts and flies in the face of the D.C. Circuit's mandate," the chairman said.
"Furthermore, one can expect continued regulatory uncertainty to accompany 51 state proceedings that may be litigated in 51 different federal district courts where the perceived aggrieved party will surely take its gripes. This could lead to court cases heard by each of the 12 federal courts of appeal where disparate opinions very well may end up before the Supreme Court, the same court that vacated the commission's first attempt at an excessive unbundling regime in 1999. What is the impact of the uncertainty today? The answer: Investment fleeing the sector."
FCC Commissioner Kevin J. Martin, a Bush ally who defected from the chairman's deregulatory agenda and ral-lied the support of Democrat commissioners Jonathan S. Adelstein and Michael J. Copps, disagreed.
"In the course of the debate surrounding this proceeding, some of my colleagues wanted to end the unbundling of all residential switching immediately. I believe such action would be inconsistent with recent court decisions and the state of competition in many markets," Martin said. "To declare an immediate end to the unbundling of all switching in every market in the country would ignore the court's mandate of a more granular analysis and effectively end residential competition."
Powell also denounced the decision to eliminate line sharing, saying it removes incentives for the Bells to invest in new broadband infrastructure and could result in higher prices for consumers.
"Line sharing rides on the old copper infrastructure, not new fiber facilities that we seek to advance to deployment. The presence of line sharing would have provided an incentive for ILECs to invest in fiber networks faster so that they could migrate toward a less regulated environment," he said.
