WASHINGTON-Federal Communications Commission Chairman Bill Kennard, in a critical test of his leadership, plans an aggressive lobbying campaign to win support for a wireless local loop initiative that he believes will jump-start local competition even as others question its legality.
“He [Kennard] supports the item,” said Ari Fitzgerald, wireless adviser to Kennard. “He believes that with changes in technology, there is a blurring between fixed and mobile. He likes the trend.”
So far, Kennard has failed to round up the votes for a potentially ground-breaking proposal crafted by the Wireless Telecommunications Bureau to permit a liberal mix of mobile and fixed services over commercial wireless networks without interference by states.
“Because he believes the draft order was neither legal under the telecom act nor respectful of states jurisdiction, Commissioner [Harold] Furchtgott-Roth proposed a less radical approach that would give CMRS providers more flexibility. It would remain within the law and respect the role of states,” said Paul Misener, the commissioner’s aide on wireless issues.
Other commissioners’ staffs share that concern. However, the FCC’s Office Counsel is said to be confident the wireless local loop proposal could withstand a court challenge.
“Given the importance of this to the bureau and the chairman, it’s certainly not dead yet,” said Dan Phythyon, chief of the wireless bureau.
Kennard’s strategy now is to personally engage fellow Democrats Susan Ness and Gloria Tristani and Republicans Furchgott-Roth and Michael Powell. Republicans have tended to give states the benefit of the doubt in federal-state jurisdictional policy disputes. Tristani, though a Democrat, may be of the same mind given her past New Mexico state regulatory activities.
Those dynamics, combined with the strong independent streak assumed by Ness after being overlooked for FCC chairman, is making it hard for Kennard to control the FCC.
In addition, the massive criticism the FCC is taking from Congress and others over universal-service implementation may be having a chilling effect on bold regulatory proposals, even those that promote the telecom act’s overarching goal of local competition. Commissioners simply may be gun-shy about pursing any controversial rule making.
Fitzgerald said Kennard is looking for support from the wireless industry insofar as making the case for flexible spectrum use with the commissioners themselves.
The Cellular Telecommunications Industry Association and the Personal Communications Industry Association strongly support varied applications of commercial mobile radio service spectrum as long as carriers are shielded from states.
But, strongly sensing the lack of votes for the wireless local loop proposal, the trade groups signaled they would rather have no decision than one that would invite trouble from the states.
In essence, the measure would test the legal limits of the CMRS regulatory classification created in 1993 by Congress. Congress pre-empted state rate and entry regulation of CMRS in 1993 legislation.
Companies like GTE Corp., AT&T Corp., Sprint Corp. and others have or are planning to experiment with hybrid networks that combine fixed and mobile features as a means to crack the $100 billion local telco market still dominated by the Baby Bells two-and-a-half years after the telecom act went into effect.
Lawmakers-who overwhelmingly supported the telecom act-are wringing their hands and pointing fingers at each other and at the FCC over why massive telecom consolidation has supplanted local competition in the residential market and, to a lesser extent, in the business market.
Indeed, Sen. Patrick Leahy (D-Vt.), one of the few who voted against the telecom act, unveiled draft legislation last week to limit further mergers among the Baby Bells and GTE.
“Under the misguided 1996 telecommunications bill, the old Ma Bell telephone monopoly is being reassembled, region by region,” said Leahy. “Instead of competition, we see entrenchment, mega-mergers, consolidation and the divvying up of the markets.”
But there is disagreement among the policy elite about whether telecom mergers pose the serious danger that some believe. Federal Reserve Chairman Alan Greenspan is not keen on blocking mergers, believing it presumptuous to prejudge which technology and market forces may change.
Antitrust czars Joel Klein, of the Justice Department, and Robert Pitofsky, head of the Federal Trade Commission, disagree. The two men believe addressing antitrust concerns up front is less risky and expensive. They note that anticompetitive damage cannot always be undone after the fact.
