Subject: [NEXTEL-1] Deregulation Plans Assailed Senators Question Agenda of FCC's Chairman

From: Marcel <[email-masked]>
Date: Wed, 15 Jan 2003 14:53:53 -0500

Deregulation Plans Assailed Senators Question Agenda of FCC's Chairman
By Christopher Stern
Washington Post Staff Writer
Wednesday, January 15, 2003; Page E05

Federal Communications Commission Chairman Michael K. Powell's
deregulatory agenda received a cool reception from a Senate
committee yesterday, as several members questioned his plans to
rewrite telephone regulations and media ownership rules.

Several senators on the Commerce, Science and Transportation
Committee expressed concern that the FCC was preparing to relax
the rules in ways that would reduce competition, raise rates and
allow giant media companies to get even bigger. Committee Chairman
Ernest F. Hollings (D-S.C.) had organized the hearing to discuss
the state of competition in the telecommunications and media
industries before he turns the reins of the committee over to his
Republican counterpart, Sen. John McCain of Arizona.

"We are heading in exactly the wrong direction," said Sen. Byron
L. Dorgan (D-N.D.). "You should have your foot on the brake, not
your hand on the throttle."

Powell ran into particularly stiff opposition to an FCC staff
proposal that would ease requirements that local phone companies
lease parts of their networks to their rivals.

Opponents of the plan, who include Hollings, say the proposal
would jeopardize competition in the local phone business just as
it begins to take off.

AT&T Corp. and WorldCom Inc.'s MCI Group subsidiary have taken
advantage of the rules during the past year to offer competition
in 46 states and the District of Columbia. More than 10 million
residential customers have signed up so far for local phone
service provided by rivals of the regional Bell firms.

But local phone companies, including Verizon Communications Inc.
and BellSouth Corp., object to the rules. The local firms argue
that they are being forced to rent their networks to rivals at
below-market rates. The U.S Court of Appeals for the District of
Columbia last year ordered the FCC to revisit the issue, saying
the agency had failed to provide a detailed justification for the
rules on a market by market basis. The FCC faces a Feb. 20
deadline for issuing revised rules, often referred to as Unbundled
Network Element Platform, or UNE-P.

Powell said the existing rules are not the only way to foster
local telephone competition. "I do not accept that the only likely
opportunity for competition is UNE-P and nothing else," Powell
said.

In addition to easing the current regulations, industry sources
say, the FCC is considering a proposal to reduce the role of state
regulators in setting the rates that competitors must pay for
leasing elements of the network.

But three of the FCC's five commissioners said yesterday that they
supported a strong role for states and would not vote for a
proposal that greatly reduced the influence of local regulators.

Among the three was Kevin J. Martin, one of Powell's fellow
Republicans at the FCC. Martin suggested that state regulators
could help the commission better justify its rules, making them
more defensible in court.

Committee members, meanwhile, made it clear they were also
concerned about proposals to loosen a variety of media ownership
rules, including regulations that bar a single company from owning
several types of media outlets in a market. For instance, the FCC
has sought comment on a proposal to do away with a ban on one
company owning a newspaper and a TV station in the same market or
a TV station and a cable system in the same market.

"There is a real possibility that the FCC is going to shift
policies so that one company can own the whole game in town," said
Sen. Ron Wyden (D-Ore.). He said the current media landscape is
already dominated by just five companies, News Corp., Walt Disney
Co., AOL Time Warner Inc., Viacom Inc. and Clear Channel
Communications Inc.

Powell declined to discuss the specifics of the FCC proposal, but
played down what he called the "more melodramatic" descriptions of
his efforts to deregulate media ownership rules. He noted that the
FCC has lost four recent court cases in which it sought to defend
its existing media ownership rules. He also argued that any
significant media merger must win approval from antitrust
regulators at the Justice Department or the Federal Trade
Commission, making any FCC rules in the area redundant.

http://www.washingtonpost.com/wp-dyn/articles/A57299-2003Jan14.html

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