Powell Predicts Martin Will Have Votes to Impose E-911 Rules

“It’s the right direction to move in but it’s potentially dangerous… This is like cable heaven. Independents like Vonage and 8 x 8 are going to have more problems than cable” complying quickly, especially with subscribers moving adapters around the country, making it hard to locate them, Powell said. “We did the same thing with mobile services” and 911. The requirement was good but “the timetable was ridiculous, unachievable,” he said. With VoIP, the FCC will get sucked into dealing with all the problems it’s setting up, he said: “You just can’t get this done in 4 months.” The govt. should have financed work to overcome the hurdles instead of making itself an “adversary to industry,” Powell said.

Beyond that, though, “you're going to have a big question mark over the FCC for a long time,” Powell said: “That commission is basically a lame duck” because of impending turnover. And “if the nuclear option goes off in the Senate” in the partisan battle over judicial appointments, “I don’t know if you're going to see an FCC commissioner confirmed in my lifetime.”

Lack of certainty opens an opportunity for companies to take adventurous positions on regulatory issues, Powell said. He posed the advice as a continuation of the “subversive” policy-making approach he undertook from within the FCC, reflected in his signaling to the VoIP industry to “go out and build” ahead of any rules, because once a business is established “that makes it very hard for government to go back on you.”

Powell said he sees little change at the FCC with his departure except “maybe at the margins and in the passion.” That was intentional, he said; he strove to make himself “dispensable” by getting a more modern mentality “built into the DNA of the Commission.”

Rewriting the Telecom Act will take Congress 18 mos.- 2 years, Powell said: “The next statute should be 20 pages long,” he said. “Don’t rewrite the Act; migrate out of it.” The new law should be a “companion” to the 1996 Act, Powell said; its thrust should be to cover IP technologies and let providers move from old classifications to new in “self-executing” fashion.

It’s “naive” to expect a “completely libertarian” environment if Internet technologies supplant all traditional communications, Powell said. But the burden should be on those who would impose a regulation; it should be done only in response to demonstrated problems; and it shouldn’t cover pricing, service quality or innovation, Powell said: “I've got to see the whites in your eyes before I start doing battle with you.” Regulation should focus instead on ensuring availability of all access means and applications users want, he said. Policy-makers should handle fee and tax issues forthrightly as revenue matters and not through the back door as policy decisions, Powell said.

A short, relatively simple law should help avoid some of the 1996 Act’s detailed lobbying and language, plus the ensuing plague of litigation, Powell said. It also would minimize putting industry and investors effectively “on hold” awaiting new rules, he said. Prolonged rewriting -- “that’s the RBOC game,” Powell said. “That’s for people who have 40 regulatory lawyers in Washington.” The move to revise the law is welcome at least as a recognition “that ‘96 is over” and the statute is “broken.”

Existing regulatory silos are distorting market decisions by inducing players to choose technologies they think likely to fall under more favorable rules, Powell said. Getting classed as a telecom service automatically means being hit with 100,000 pages’ worth of rules, he said.

Meanwhile, in the market, in a few years “you're going to have a hard time [seeing] what the difference is between SBC and Comcast” functionally, he said. The Bells and cable “danced around each other for a long time,” but the competition between them “is going to get brutal now,” Powell said. Cable telephony was the signal for “no more Mr. Nice Guy” between the industries, he said. They will “hurt each other pretty badly” grappling over what essentially will be commodity services, Powell said. He said he wishes cable would “think more disruptively” and exploit its experience in entertainment, including gaming and in interactivity, instead of trying to compete on vanilla voice.

If the Supreme Court rules cable modem a telecom service, the same logic would apply to Wi-Fi, broadband over powerline -- “anyone who provides Internet service over self-provided facilities,” Powell said.

Telecom consolidation was “inevitable,” but Powell said the 1996 Act and his predecessors at the FCC could have made it work out better. There was “only so much room” on the roster of full-service national providers, he said. It would have been preferable if they had allowed vertical integration and the Bells had gobbled up long distance carriers early on, Powell said. That at least would have left several big Bells competing. Instead, the Bells first were compelled to buy each other to bulk up, leaving only SBC and Verizon as giant players, now getting around to taking over AT&T and MCI: “That could have been foreseen, and the government missed that one.”

Powell alluded to criticism of low U.S. ranking on broadband penetration and to industrial policies in countries ahead of the U.S.. He favorably contrasted his FCC’s promotion of competition among multiple technologies for high-speed access against unspecified nations with a stance of “sell your soul to get” broadband based on a policy of “just hug the monopolist,” meaning incumbent providers.

Policy is starting to be made by more sophisticated and sympathetic players, Powell said. Congress still “has a lot of 83-year-old guys looking over this sector, which is not necessarily great,” he said. But members such as Sens. Sununu (R-N.H.) and Cantwell (D-Wash.) are considerably more with it, as are a good number of judges’ law clerks, he said.