Cicconi Wants to Avoid Partisan Thinking in Regulatory Shift to IP Networks

All too often, policy debates in telecom become “subject to belief systems,” Cicconi said, citing the net neutrality debate as something that quickly became a “religious war.” That sort of thinking -- and the defensive postures adopted by each side -- makes it much harder to solve problems and to have a legitimate discussion about how to reform the communications laws, he said. “We were very conscious of the way we posed the questions,” Cicconi said, noting the brief doesn’t dwell on AT&T’s “preferred answers,” but rather tries to challenge the industry to approach telecom reform in a noncompetitive away, rather than going “back to the barricades."

Cicconi called for a re-examination of the purpose of regulation in the “dynamic” telecom market. The commission refuses to consider wireless substitution, even though only 30 percent of customers in AT&T’s 22 legacy footprint states continue to rely on copper, he said. “Increasingly the commission, even though it knows better, finds itself having to deny reality ... in order to preserve its authority,” Cicconi said. But requiring incumbents to maintain the legacy systems increases costs, because even as AT&T builds its modern IP infrastructure, current rules prevent it from “turning off the old infrastructure,” he said. That drives up maintenance costs and prevents AT&T from realizing savings, he said. Cicconi questioned whether the FCC should retain its status as an independent agency, arguing that the FCC could operate as an executive branch agency like the Department of Justice does, in a way that’s “insulated” from political concerns.

NCTA CEO Michael Powell, a former FCC chairman, said it’s time to strip the FCC of its merger-reviewing powers. It’s not that the commission is “a bunch of incompetents”; it’s the duplicative nature of the review that adds a “trivial” economic benefit that can’t be justified, he said. The FCC is at an “enormous disadvantage” in terms of scholarship and antitrust expertise compared to DOJ or the FTC in doing horizontal merger analyses, he said. Mergers between food, oil, or gas companies are more important than communications mergers, and don’t go through a duplicative review, and “our society has done just fine,” Powell said.

The FCC’s review power turns the decision-making process into “an open legislative bazaar,” Powell said, questioning the legality of the “voluntary” commitments the commission can wrangle out of companies, which are not judicially reviewable because they're voluntary. This creates a “mini-legislature” where constituencies try to come and take advantage of the process, Powell said.

George Mason University professor Thomas Hazlett said the FCC should “think big” about the “amazing transition” from wired to wireless, and try to understand what that means. Universal service discussions should consider extending support to wireless and satellite infrastructure, he said. Satellite now can deliver broadband for $40 per month, and serves the entire U.S. “How can you exclude that” from the discussion? Hazlett asked.

Robert Litan, director of research at Bloomberg Government, and Hal Singer, managing director at Navigant Economics, presented ideas in their upcoming book, The Need for Speed: A New Framework for Telecommunications Policy for the 21st Century. Litan said the current USF subsidy system should be “rejiggered” by including cable providers, targeting the subsidies based on income rather than geography, and applying the subsidies to wireless buildout. If the FCC counts wireless in its Section 706 broadband competition reports, “the United States is already about as close to universal access to broadband as one can possibly get,” Litan said.