- The Washington Times - Sunday, March 7, 2004

The U.S. Court of Appeals for the District of Columbia again has ordered the Federal Communications Commission to deregulate telecommunications. In its opinion on Tuesday, the court expressed frustration that its two previous rulings in favor of deregulation have been ignored. Striking down the FCC’s claim that local telephone companies had to share their networks with new competitors so as not to have an unfair advantage, the court stated that the commission’s definition of a business disadvantage “is vague almost to the point of being empty.” We agree with the court’s judgment.

At the outset, it is essential to know that the FCC position the federal court keeps rejecting is not that of the Bush administration or even of FCC Chairman Michael Powell. The guideline that phone companies need to share their infrastructure with new entrants into their markets was created by an alliance of the two Democrats on the commission and Kevin Martin, a Republican who frequently votes with the Democrats. Tuesday’s ruling backed Mr. Powell’s position by denying the right of competitors to use the phone lines of regional Bells at below-cost prices.

The court also upheld Mr. Powell’s broadband rules deregulating new investment in high-speed Internet facilities. With Mr. Martin voting with his fellow Republicans, the majority of the commission had adopted these rules — so the court’s decision acts as an imprimatur for companies to progress with construction of the next generation of infrastructure.

After the Appeals Court decision, unfortunately, Mr. Martin and the Democrats announced that they will challenge the ruling before the Supreme Court. Federal courts have already rejected these guidelines three times. Enough is enough. President Bush put Mr. Martin on the commission, and he still has a close relationship with senior Bush advisors. This trouble could be stopped with a White House nudge.

The telecom sector needs certainty. The economy needs certainty. The market lost billions of dollars after the coup by Mr. Martin and the Democrats. This is not a simple case of the Bells vs. long-distance providers, as much of the press often oversimplifies it. Telecom equipment makers like Cisco tanked in the wake of the decision. The total toll to the industry was $30 billion in market capitalization. Continued uncertainty prevents the industry from building for the future.

As the Court of Appeals understands, the decision made last February by Mr. Martin and the Democrats is an example of an obsolete way of doing business. Government-forced “competition” is not competition at all. For the telecom sector to regain its strength in the marketplace, this case needs to end. All it would take is for Mr. Martin to side with his fellow FCC Republicans and support the agenda of the president who put him on the commission.

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