Powell’s ‘Swan Song’ Revels in Protecting Precious Creature, VoIP

The sector must “help solve 911, protect legitimate law enforcement needs and advance the American ideals of universal service,” Powell said. “You need to show public policy leaders the way -- because I'm pretty sure you don’t want them to do it for you.” Responding to a venture capitalist, Powell also urged investors to get more directly involved in public policy: “We have needed for a long time to understand better the incentives for investment to spur the innovation” everyone lauds. “You have a lot more credibility sometimes than the companies themselves” when they tell regulators what they can’t do because of their investors, he said.

Powell said VoIP may have forced a long-overdue overhaul of “mind-numbingly entangled” intercarrier compensation. Responding to a plea from VON Coalition Pres. Staci Pies for certainty that VoIP can continue pricing based on cost rather than old subsidies, Powell said: “I am going to do my best to make you happy but it’s not entirely in my control.” He said an FCC agenda item “would provide some of the clarity” Pies sought, but he wasn’t sure it would win a Commission majority. At a minimum though, the issue would be posed and the FCC wouldn’t be able to avoid it, Powell said. “When it’s your cheese being moved,” change causes anxiety, he said. He said the keys were explaining that “consumers will be better off” if technology is allowed to achieve ubiquity and affordability, and, alluding to universal service, it shouldn’t be a “program rather than an objective.” Powell said policy-makers were posed an “unfortunate binary choice” between subjecting new technology to the old access charge regime or letting the technology entirely off the hook -- “neither of which is a fair economic bargain.”

Powell suggested the FCC deserved credit for the consensus among Congress and the public in favor of federal jurisdiction and against economic regulation of VoIP. “It was not preordained,” he said. He adopted the imagery of those who had argued VoIP “walked like a duck and quacked like a duck” in replacing switched voice service and so should be regulated accordingly. As soon as the technology started stirring in the swamp, “the hunters” -- telecom incumbents -- came out shooting, he said: “'You look like the old phone company -- bang!'”

Powell said he was “proud of the FCC” for taking the time “to look at that bird,” and determining it was a new species. “Rather than shoot duck, we chose to go after the duck hunters, and preempted the states.” Confining VoIP in “51 coops” of state and D.C. regulation would have killed it, he said.

But “danger still lurks… in the weeds,” Powell said. Broadband providers have the means, motive and opportunity “to play with your bits” -- interfere with customers’ uses of the service. And “many questioned” whether Powell’s “Four Freedoms” of Internet use was “all talk and no action,” he said. But the FCC’s Madison River Communications consent decree against port blocking that interfered with VoIP represented “a shot across the bow of those who might be tempted to abuse their power… and a declaration that we would keep a look out.” It was also “a remarkable regulatory feat,” accomplished in just 3 weeks, Powell said. “Three weeks would be light speed -- like 0-60 in 3 seconds -- for a regulatory agency.”

Powell said standing in an electronics store the other day had filled him with joy at the array of broadband offerings, including powerline service, and gadgets including TiVos, iPods, cellphones and HDTV sets. But he really “had to smile” when he saw the VoIP adapters, he said. It reminded him of what his grandmother had said of things she liked: “She wished she could bottle it up and take it home.”