Subject: [NEXTEL-1] Michael Powell talks back to AO members in 2nd post

From: [email-masked]
Date: Thu, 05 Aug 2004 17:17:36 -0400

Michael Powell talks back to AO members in 2nd post

FCC Chairman Michael Powell's first post gets picked-up by Reuters and
"Slashdotted" creating lots of buzz (and comments!)
Michael Powell [US Federal Communications Commission] | POSTED: 07.11.04
@15:31
Editor's note: Michael Powell's first post is big hit with AO members
and he responds to some of the comments below in his second post.

Michael K. Powell
Chairman, Federal Communications Commission
AlwaysOn Blog
July 11, 2004

AO Members:

Thank you all for the warm welcome. I am so impressed with the breadth
and depth of so many of your comments. I would like to respond to
several of the topics that seem to interest many of you:

Strategic Vision and Competition Policy:
Mark Zorro asked about a clear vision for the FCC and many of you (Jerry
H, Robert Lamb, and Peter Rad just to name a few) have asked about
competition policy. We do have a vision. I call it digital migration.
The biggest problem for the last 100 years has been the government
embracing monopoly and the fact that there was basically one-wire to
bring communication service to the all consumers, regardless of where
they lived (yes, remote parts of Alaska are expensive this way). A
network was optimized for 1 application—copper wire for voice by telcos,
coaxial for multichannel video by cable companies and so on. Our vision
is to solve the one-wire dynamic by driving multiple broadband platforms
to reach people. This is why we have adopted policies to push for DSL,
Cable Modem, Broadband over Powerline, Wi-Fi, WiMax, satellite broadband
and ultrawideband technology. We believe a tech vision can drive
multiple platforms and create greater "pipe" competition. It is not for
us to pick the winners, but to let technical innovators have a chance.
More importantly, by following the internet paradigm and thinking of
services as applications that can be divorced from any one platform, we
can see a second order of competition developing in the application
layer. VoIP is a strong example! Less regulation in this service layer
will foster innovation and competition. It is critical we refrain from
onerous economic regulation on such services. A vigilant eye on
infrastructure providers is still critical. We have pushed enforcement
(we have the highest fines against incumbents than any past commission.)
I have urged the adoption of net neutrality principles, warning pipe
providers against interfering with the bits flowing to willing
consumers. This blog is valuable, in part, to refine this vision.

Intramodal Competition:
To be clear, however, I still think we need to promote competition
through access to the incumbent’s network. I have not been a big
supporter of UNE-P, however, for a few reasons: First, I always thought
it was illegal under the statute and would misdirect the competitive
market to develop on a regulatory arbitrage whose days were numbered.
That day arrived in the recent court case. Second, I do not believe all
the high ambitions for competition should rest on basically reselling
the incumbents services. Consumers get a choice, but a flat one. There
is not much product differentiation possible (just selling the same
thing). Not much price competition possible (stuck with price inputs and
a state regulated retail market). Not much network redundancy at a time
of serious risk to our nation. We are going to write new competition
rules in the next 6 months and they will promote small competitors using
the incumbent’s network to provide necessary facilities.
Facilities-based competition is something I strongly support. In fact,
most small and mid-size companies are facilities providers. The biggest
disciples of UNE-P have been the giant long distance companies.

Media Ownership:
I appreciate the comments many of you have made about media ownership. I
want to be clear about my thinking on this. Yes, I believe strongly that
media concentration can hurt the marketplace of ideas if unchecked. I
also think it is critical (though difficult to measure) to have a
diverse marketplace; one that promotes local content. The challenge for
the technocrat (that is me) is not whether we believe in the risk of
excess concentration, but where you draw the line. Diversity values are
important, but they do not lend themselves to mathematical precision. It
is not easy to figure out whether you need 5 stations in a market, or
only 4 before diversity is compromised. Some draw lines tightly or
loosely base on whether they are supporters, or detractors of particular
content. The NRA hates "gun toting liberial media elites" and Anti-war
groups are incensed with Fox News Network. Keep in mind that it is
dangerous for government to draw lines based on the messages it prefers.

Another challenge is the fragmentation of media. Our "media" rules are
really no such thing. They are focused exclusively on free-over-the-air
broadcasting. For decades the Commission has regulated broadcasting and
ignored cable as a voice (mind you over 85% of Americans pay for TV, by
cable or DBS). The rules had completely ignored the internet as an
outlet for opinion and organization. A sound policy needs to take these
sources into account in drawing lines, and I have argued for better
inclusion of these medium. Broadcast is in decline as audiences continue
to fragment. It depends exclusively on advertising revenue for its
survival. Other media are in the ascendancy. My kids do not have any
idea what a broadcast network is. They see no difference between channel
4 and channel 104. And—they are boys—you are much more likely to find
them on their Xbox or playstation, or the internet anyway. Perhaps, the
time is not yet ripe for crediting these trends, as others argue, but I
think we should.

Finally, I would urge those of you interested (especially those who are
critical of our decision) to look carefully at what we actually did.
Many complained about radio consolidation and Clear Channel owning over
1200 stations. We agreed and restricted further radio consolidation in
our rulemaking (this fact is often overlooked in traditional media
articles). We prohibit networks from buying each other. Networks pushed
for us to eliminate the national cap on ownership. We refused, and only
modified it to account for the greater number of sources coming from
cable, DBS, and the internet. I do believe in media limits and agree
with everyone who thinks it is correct to be concerned. But, we need a
deeper discussion about how and where to draw the lines than we have
had.

Sorry I cannot respond to everyone, but I plan to review comments
regularly and post as often as I can. I appreciate the comments and
support. Lets keep the discussion going. I think this is an amazing way
to hear the views of bright people who share a passion for the direction
of our country.

Michael Powell

Read comments from readers:
http://www.alwayson-network.com/comments.php?id=4860_0_3_0_C

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