![]() ![]() February 27, 2003F.C.C. Members Testify About New High-Speed Rules The sharp divisions among the commissioners were aired in their first public appearance together since the widely anticipated vote last week for the new regulations. The regulations passed on a 3-to-2 vote. The commission members appeared before a panel of the House Committee on Energy and Commerce. Most of the lawmakers' questions, as well as some anger, were directed at the F.C.C. chairman, Michael K. Powell, and a commissioner, Kevin J. Martin, a Republican who had brokered a compromise with the two Democratic members of the commission. The critics of the compromise included some congressmen who have been among the most outspoken advocates for the so-called Baby Bells — Verizon, SBC, BellSouth and Qwest Communications International. The Bells, which have been lobbying for deregulatory relief for years, had been pushing for new rules that would free them from sharing both their telephone and broadband operations with competitors. Instead, the commission freed them from sharing broadband lines but forced the Baby Bells to continue to share their telephone lines until state regulators determine that there is enough local competition to permit deregulation. "I believe the order we adopted last week achieves a principled, balanced approach," said Mr. Martin, who has close ties to the White House. After the ruling, many of the local phone companies announced that they would not be making new investments in high-speed services as a result of getting only half of what they wanted from the ruling. But Mr. Powell dismissed the Baby Bells' reaction, saying, "Here is a lot of crying crybaby reaction to the decision." He said he thought that the announcements were more like "public affairs reactions" than like reasoned management decisions. Mr. Powell also said he was getting tired of the "passion play between billion-dollar self-interested actors." The committee, which is generally sympathetic to the Baby Bells, also criticized the local phone companies for their failure to invest. Several congressmen noted that the Baby Bells had received a lot of what they had asked for since the 1996 Telecommunications Act but were still not making the investments that they had promised they would make. The sense of impatience among House members is notable because the House is often seen as being more favorable to the Baby Bells than the Senate. There are a large number of telecommunications jobs in local districts, and the industry has engaged in intense lobbying over the last several years. Last year, after much lobbying, the House passed the Tauzin-Dingell broadband deregulation bill, which would have freed the Bells from some of the line-sharing requirements. While the bill was halted in the Senate by Senator Ernest Hollings, last week's F.C.C. ruling essentially accomplishes a lot of what was in the Tauzin-Dingell bill and more. The commission's ruling means that the Bells are not obligated to make new investments in infrastructure, as they were under Tauzin-Dingell. But the congressmen and the commissioners all noted that the continuing regulatory uncertainty that would come with state-by-state evaluations on local phone service would probably stall telecommunications investment as the rules made their way through court challenges. A number of congressmen were overtly hostile on this point, including Representative Billy Tauzin, the Louisiana Republican who is the chairman of the House Committee on Energy and Commerce. Mr. Tauzin was critical of the regulatory role of the states. He argued that the ruling would result in 51 local procedures with 51 lawsuits and 12 different appeals courts, "ending up at the Supreme Court that ordered the deregulation in the first place." But in a letter sent to Mr. Powell in June 2002, Mr. Tauzin himself wrote: "The commission must evaluate the rationale for requiring the unbundling of a network element based upon specific geographic and class-of-customer characteristics of individual markets across the nation. Uniform, national rules do not accurately reflect the state of competition and the unique economic characteristics of individual markets." |