WASHINGTON-The Federal Communications Commission is “quickly approaching the chicken-and-egg question” with respect to how the agency should respond to explosive competition in the wireless industry, FCC Commissioner Michael Powell told a gathering of wireless industry lawyers last week. In his first wireless policy speech, Powell said the FCC is grappling with deciding whether deregulation or competition should come first.

There are two trains of thought on the issue, Powell said.

The first is that since the wireless industry is experiencing competition, it should not be regulated. Powell seemed to espouse this view later when he said that as the wireless industry starts to compete more directly with the wireline industry, “we should be thinking about liberating the regulated [wireline] guys.”

The second idea in the competition and deregulation debate is that deregulation should be a reward for competition, he said. This idea, he said, leads only to perpetuating regulation because “competition is a journey rather than a destination.” Using competition as a reward only leads to a series of other questions such as determining when competition has arrived.

Powell is skeptical the FCC will stop regulating the telecommunications industry anytime soon. “We are not fully prepared to replace regulators with the free market,” he said.

Consumer protection is another “bug-a-boo” to competition, Powell said. “We cannot allow the telecom debate to collapse into the pro-business/pro-consumer debate … Competition puts consumers into the game instead of protecting them from it,” he said.

Responding to criticism last week from Sen. Conrad Burns (R-Mont.), chairman of the communications subcommittee, who said the FCC was placing too many unfunded mandates on the wireless industry, Powell said, “I would like to think I would have the courage to tell Sen. Burns that these were statutory mandates.”

One of those mandates, local number portability, is discussed in the context of a forbearance petition from the Cellular Telecommunications Industry Association. It might be difficult to grant the petition, Powell said, because local number portability never has been in place before, so the FCC is not aware of what, if any, anti-competitive impacts local number portability might have. “It’s awful hard to forebear from something you haven’t tried even once,” he said.

Regarding the universal-service debate, Powell said some level of universal service is necessary and could be funded without harming the industry.

The reason he has not voted against some universal service items coming out of the FCC like his fellow commissioner Harold Furchtgott-Roth has is that “I don’t want to be completely marginalized inside the FCC.” Instead, Powell has written “harsh concurrences” to express his views on the direction the FCC should be taking with regard to universal-service policies, he said.


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