FCC Observers Say Agency Should Delineate Mission Once Wheeler Confirmed

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By Bryce Baschuk  

Oct. 15 --Once confirmed, the new chairman of the Federal Communications Commission should spell out the agency's perspective on the issues facing the modern telecommunications sector, industry analysts said Oct. 15 at a panel hosted by the Technology Policy Institute.

The FCC, which only has three of its five commissioners confirmed, faces a long list of pressing items including three upcoming spectrum auctions, oversight of its broadband deployment projects and the transition from copper telephone networks to Internet protocol [IP] networks, among others. The Senate has not yet voted to confirm Tom Wheeler, President Barack Obama's nominee for FCC chairman, nor Mike O'Rielly, the Republican nominee for FCC commissioner.

The FCC should “take a look at where the industry is today, [ask] what are the challenges ahead, is there a role for regulation in that, what is it and how should we, in fact, plan for that?” Jim Cicconi, AT&T's senior vice president of external and legislative affairs, said Oct. 15. This requires the FCC to “modernize its approach and its outlook and, frankly, modernize some of its regulations,” he said.

Cicconi said he believes the FCC has an oversight role as telecommunications companies and customers migrate from wired copper telephone networks to IP-based networks. AT&T has a pending proposal with the commission to coordinate tests at wireline facilities which would replace their time-division multiplexed facilities with IP-based alternatives.

Former FCC Chairman Reed Hundt said the IP transition should be data driven, transparent and ensure that customers aren't left behind.

AT&T: No Spectrum Caps

Cicconi urged the FCC to avoid setting spectrum caps that would prevent larger carriers from bidding on certain bands in the upcoming incentive auction. “The notion of setting artificial limits seem purely designed to advantage one set of companies and disadvantage another,” he said.

AT&T isn't against “something that is set up to be even-handed,” Cicconi said. “I think it is possible to do that with the current spectrum screen.”

Hundt said lawmakers improperly designed the spectrum auctions in the Middle Class Tax Relief and Job Creation Act of 2012 (Pub. L. No. 112-96).

“The auctions are not fundamentally about raising revenue,” Hundt said. “The more the companies pay for the spectrum the higher the costs they have to pass on to businesses and customers,” he said. “The goal is to have the spectrum go to the company that values it the most and to have it mean that that award mechanism transfers the spectrum at the lowest possible price.”

FCC Better Telecom Regulator than DOJ, FTC

Hundt said the FCC is generally better suited than the Department of Justice or the Federal Trade Commission to ensure competition in the telecommunications industry. “Those organizations do have brilliant economists and those are helpful but what is also true is that the FCC has deep bench strength in technology and in business models and in the history of the relevant industries.”

The FCC can quickly resolve an issue by enacting a rulemaking rather than spending years in litigation like the Justice Department, said Hundt.

The FCC does have a lot of expertise but its policies are often driven by the “ideological swings of the chairman,” said John Mayo, an economics professor at Georgetown University and adviser to the FTC and DOJ. “You don't see that at the Department of Justice.”

“The FCC does not do a particularly impressive job of competition policy,” said Thomas Hazlett, a professor at the George Mason University School of Law. “There are other agencies who have done at least as well and have more expertise in the matter, both legal and economic.”

Structural Defects Still Remain

The DOJ and FTC believe “economics are important enough to dedicate bureaus to them and to have actual economic input as a pro forma into policy decisions,” Hazlett said. “That is not true at the Federal Communications Commission. And so the performance of the FCC is systematically biased against economic analysis, relative to the other agencies,” he said. “That is a structural defect of the FCC.”

“I know there are voices that are questioning if there is a need for the FCC going forward; I'm not one of them,” Cicconi said. The commission “needs to get started in looking at what issues arise when you transition from a network that served us so well for 100 years to the one we hope will serve us well for the next 100,” he said.

The FCC can and should play a consumer protection role and ensure that public safety services are preserved for consumers who transition to IP networks, Cicconi said. “Of course we need to ensure sure public safety is taken care of. 911 has got to work; you can't have a situation where important features of the current network will break and you don't have a remedy.”

To contact the reporter on this story: Bryce Baschuk in Washington at bbaschuk@bna.com

To contact the editor responsible for this story: Heather Rothman at hrothman@bna.com

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