- The Washington Times - Wednesday, August 18, 2004

FCC Chairman Michael Powell has so far punted on a straightforward opportunity to free up billions of dollars in broadband investment. Mr. Powell’s failure to unfetter broadband or high-speed Internet facilities from burdensome and archaic regulations is undermining potential job growth in the telecom sector and business innovation.

Former Baby Bell companies have large-scale ambitions to deliver broadband connections through fiber-optic wiring. But the future regulatory environment remains unclear.

Verizon therefore requested the FCC in mid-2002 to clarify that regulatory framework. Verizon’s so-called forbearance petition is necessary because of some ambiguity in the 1996 Telecommunications Act, which the FCC has interpreted as simultaneously eliminating and imposing heavy regulatory burdens on broadband infrastructure. The FCC was entitled to review the petition for 12 months, which it did, and then asked for a three-month extension. After that extension ran out, the FCC told Verizon it should more closely tailor its petition. After Verizon did so, the FCC then told the company it was starting the clock all over again. Last month, a U.S. Court of Appeals found the FCC in error.

Mr. Powell clearly is trying to delay making a critical decision on fiber-optic broadband regulation, but you wouldn’t know this by listening to his statements. Given the large investment required, “broadband service should exist in a minimally regulated space,” Mr. Powell said some months after taking his post. Rules that the FCC published last August cleared some regulations on broadband, but the rules were also somewhat ambiguous and not as sweeping as many had expected. Under those rules, in some circumstances, the former Baby Bells may still be forced to rent parts of the broadband infrastructure they paid for and established to competitors at low, government-set rates.

When the FCC meets next month, it could, and should, free Verizon and other former Baby Bells from stringent regulations, and thereby give broadband deployment a boost. It is unlikely to do so. Instead, the FCC appears centrally focused on preparing a response to an unfortunate April decision by the 9th Circuit Court of Appeals.

The court held that cable modem service is an interstate “telecommunications service,” not an “information service,” and therefore subject to more stringent regulations. The FCC is correct in considering a strong challenge to that court decision, but that effort should not preclude the agency from freeing fiber-optic broadband infrastructure from onerous regulation, once and for all.

The chairman’s protracted delay in responding to Verizon’s petition is unfortunate and contradictory. Mr. Powell should step up to the plate in the agency’s meeting next month.

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