Subject: [NEXTEL-1] Phone competition will continue, FCC chair says

From: Marcel <[email-masked]>
Date: Wed, 22 Jan 2003 04:06:57 -0500

http://www.infoworld.com/articles/hn/xml/03/01/15/030115hnpowell.xml?0121tutelecom_ar

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Phone competition will continue, FCC chair says

By Grant Gross

January 15, 2003 6:35 am PT

WASHINGTON -- THE U.S. Federal Communications Commission (FCC) will not relax its rules governing the Baby Bells to a point where competition with local phone service providers is killed off, FCC chairman Michael Powell told a group of U.S. senators Tuesday.

Powell, speaking before the U.S. Senate Commerce, Science and Transportation Committee, offered few details on what direction the FCC plans to take during its so-called triennial review of rules governing the Regional Bell Operating Companies (RBOCs) and their unbundled network elements (UNEs) under the
Telecommunications Act of 1996. The FCC decides what UNEs the RBOCs must make available to competitors at wholesale prices.

Powell disputed press reports that the FCC was headed toward a drastic overhaul of the rules allowing providers such as WorldCom and AT&T to access some network elements owned by the RBOCs, including Verizon Communications and SBC Communications.

The Baby Bells will have to offer some access to the Competitive Local Exchange Carriers (CLECs), Powell said, "I pledge that to you right now."

Several senators voiced concerns that the FCC would allow the Baby Bells to charge the CLECs significantly more for network access. Powell suggested the CLECs should look for other ways of providing local phone service besides piggy-backing on the Baby Bell networks, such as building their own networks. But Senator Byron Dorgan, a North Dakota Democrat, argued that relaxing the rules would destroy the easiest way for customers to get competitive phone service.

"If you get it wrong ... we're going to have much less competition, and the American consumer is going to suffer greatly," Dorgan said.

The hearing started with an impassioned speech against the RBOCs from Senator Fritz Hollings, the outgoing chairman of the committee.

"Are you all on the side of higher prices and lower competition or not?" the South Carolina Democrat asked the five FCC commissioners.

"Absolutely not," Powell answered.

The Baby Bells have argued that they are losing money by providing the CLECs access to their networks at rates discounted by up to 60 percent, and that without changes to the UNE rules they are less likely to upgrade or expand their services. SBC has recommended that the FCC immediately end UNE platform sales to business customers and phase out sales to residential customers.

While Powell told senators that the changes won't be as drastic as some of them fear, he did hint that the FCC will need to make significant enough changes to entice the Baby Bells to invest in services such as broadband. "Incrementalization has it's place, but so does boldness," Powell said.

The FCC is under pressure to decide the rules quickly, Powell added. On Feb. 20, an order by the U.S. Court of Appeals for the District of Columbia will overturn the current UNE system.

During the hearing, Senators George Allen, a Virginia Republican, and Barbara Boxer, a California Democrat, announced that they were introducing a bill to open up more of the Wi-Fi
wireless spectrum for commercial use.

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