Abernathy Says Only Telecom Act Rewrite Can Stabilize Broadband Regulation
ASPEN, Colo. -- FCC Comr. Abernathy said that as long as the Telecom Act remains as written, broadband regulation will be contested in court and leave few parties satisfied. Her comments Mon. at the Progress & Freedom Foundation Aspen Summit came after a series of CEOs accused regulators of having stymied investment and created regulatory uncertainty. Abernathy was careful not to formally ask Congress for a rewrite, but said “if they do that and I get new direction from Congress, that would be great. It would make my life easier.”
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“I have to live with the statute,” which was not written for broadband, Abernathy said. Repeating previous public statements, however, she added that the FCC still has a role to play within the existing rules to “provide some regulatory relief” and approach parity for broadband platforms and services. While the CEOs speaking at the summit were quick to fault regulators for not waiting for markets to develop before regulating -- VeriSign CEO Stratton Sclavos and Time Warner Cable CEO Glenn Britt said precedent with railroads and other businesses suggested a 25-year wait to see what problems arise before regulating -- there wasn’t widespread enthusiasm among CEOs for a Telecom Act rewrite.
“That’s a question about which I am greatly conflicted,” said Level 3 CEO James Crowe, noting the Telecom Act has led to “unintended consequences.” “Are we likely to lower the regulation legislatively?” Crowe asked, seeming to answer his question in the negative by referring to special-interest group agendas that will be involved in any rewrite. (Leaders of the House and Senate Commerce Committees have vowed to begin working on a rewrite next year.) Still, Crowe felt “some sort of legislative action would be helpful” if it was purely deregulatory.
“I have some trepidation” about what would emerge from Congress, Britt said. Still, he said “the current regulation is outmoded,” citing the frequent court cases that prompted Abernathy to say one group benefited from the Telecom Act -- lawyers. The current Telecom Act “creates uncertainty,” Abernathy said: “As a regulator, I want uncertainty to go away.” She said her mission as a regulator was to act “so we're not impeding investment and discouraging innovation.”
Uncertainty was unwelcome to attending CEOs as well, but they didn’t limit the criticism to the Act itself. “Trying to regulate is counterproductive, period,” Crowe said. Sclavos said early in previous infrastructure revolutions, govt. was “a promoter and investor in technology”; it didn’t regulate until decades after a nascent industry had passed its “inflection point,” when increased demand led to expanded capacity as well as intelligent governance, such as air traffic control for air travel or SCADA systems for electrical grids. Internet-related companies are being asked to invest billions without any clear idea how broadband will be regulated, Sclavos said. “I need more clarity,” he said. “Wall Street is terrified by all the uncertainty,” Britt added. He said it’s hard to “jump ahead in innovation” when he doesn’t know what the regulatory world will look like. Still, Sclavos and Britt were careful not to say outright that they'll stop investing in new technologies and services, and Britt said his company “will continue to innovate.”
There was a sense that regulation had a role, however, at least concerning social expectations. Britt said any provider of VoIP should be expected to provide access somehow to law enforcement (CALEA) and 911 service: “There should be some basic obligation of anyone in this business.” Abernathy counted universal service and access for the disabled among social obligations appropriate for FCC action on VoIP. Those services “won’t surface in a pure competitive model,” she said. Abernathy also saw a role for the FCC in ensuring VoIP regulation occurred at the federal level.
Abernathy outlined other areas where the FCC is trying to work within the existing Act to encourage innovation and investment: (1) Spectrum reform. (2) A solid broadband- over-power-line framework. (3) Rationalized regulation for competing broadband providers, such as the cable and telecom industries. (4) “Ensuring for a certain time access for competitors to infrastructure.” She later added that “we have to come up with final rules on the triennial to get that behind us.” Late last week, the FCC issued an extension of existing connectivity rules for the next several months. BellSouth, for one, said final rules should be in place by year-end. Abernathy agreed. “We have to do that by the end of the year,” she said, adding “that’s my own personal opinion.”