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FURCHTGOTT-ROTH TO FCC COLLEAGUES: FOLLOW THE LAW

WASHINGTON-It is Congress, not the Federal Communications Commission, that makes telecom policy, according to one of the new FCC commissioners, Harold Furchtgott-Roth. The FCC “must simply follow the law as it is written by Congress in developing telecommunications regulation. We don’t go outside of the law. We’re not really a policy-setting body. Congress sets telecommunications policy … The FCC [should] follow the law,” said Furchtgott-Roth.

In an exclusive interview on his views of various wireless issues, Furchtgott-Roth said a number of times the FCC should take direction from Congress, not make that direction.

This philosophy extends even to policies that may seem unfair to wireless carriers. For example, on universal-service contributions, Furchtgott-Roth said if wireless companies do not feel they should have to pay into the universal-service fund, Congress-not the FCC-would have to make that change.

“The [FCC], in my view, is simply obligated to follow the law as it is written and not try to change [it] as we might interpret [it] as Congress might have intended. I think we have no choice but to include wireless” in universal-service contributions, he said.

In addition, Furchtgott-Roth said that “independent” from the C-block debacle, the FCC never should have instituted the installment payment program. “It would make sense to have the [FCC] get out of the banking business and simply conduct auctions with money on the barrel … I frankly think [installment payments are] beyond our statutory authority. I am not quite sure where we came up with the statutory authority to do the auctions the way we did in the past, independent of whether the auction winners could make the payments,” he said.

Furchtgott-Roth was joined in the July 6 interview by Paul Misener, his senior legal adviser and chief of staff. Misener advises Furchtgott-Roth on wireless issues.

RCR: In the year since you have been nominated [Furchtgott-Roth was nominated May 23, 1997], what has been the biggest thing you have learned that you didn’t expect? The biggest surprise?

Furchtgott-Roth: There’s a lot going on at the [FCC], much more than is apparent to the outside world.

RCR: When you say the outside world, do you mean the general public or those in the telecom world?

Furchtgott-Roth: Even as a Hill staffer, I had no idea the breadth of activities going on here.

RCR: You have a really interesting general regulatory philosophy, I was hoping you would talk about that.

Furchtgott-Roth: First, I think the [FCC] is exercising regulation of interstate commerce, which is part of the Constitution due to congressional authority. We must simply follow the law as it is written by Congress in developing telecommunications regulation. We don’t go outside of the law.

We’re not really a policy-setting body. Congress sets federal telecommunications policy. My philosophy is simply for the FCC to follow the law.

RCR: Do you think, though, sometimes that is difficult? The Telecommunications Act of 1996-and you were one of the principle staffers on that-has been criticized by some people as “something for everyone.” Do you think it might be a little more difficult to actually get to what Congress wrote or what Congress meant by what it wrote?

Furchtgott-Roth: There are probably parts of [the 1996 Telecom Act] that are difficult to implement, but I think a lot of it is pretty straightforward.

RCR: You seem to be the only commissioner to recognize that wireless carriers have come under universal-service regulation after the telecom act. Was that intended by Congress?

Furchtgott-Roth: I don’t know that it explicitly came up. There certainly was an effort by Congress to distinguish between and preserve the boundaries between federal and state jurisdiction. Section 254 (the section on universal service) contains very specific language distinguishing federal responsibility and state responsibility. But it is done along interstate vs. intrastate and that is where the wireless industry has gotten stuck.

RCR: That is a problem for the wireless industry because a lot of wireless carriers do not distinguish between interstate and intrastate?

Furchtgott-Roth: Right.

RCR: Sprint Spectrum’s local calling area, for example, goes from Baltimore to Virginia.

Furchtgott-Roth: Right and AT&T (Wireless Services Inc.) is now nationwide.

RCR: So does that automatically make them interstate, is that how the [FCC] looks at it?

Furchtgott-Roth: Yes.

RCR: Would the wireless industry have to go back to Congress to have that better clarified for the FCC? If they don’t want to pay into the universal-service fund, is that their only option?

Furchtgott-Roth: I am afraid so. The [FCC], in my view, is simply obligated to follow the law as it is written and not try to change [it] as we might interpret as Congress might have intended. I think we have no choice but to include wireless.

RCR: One of the things that has recently been a big issue is fixed local loop. I know that there have been some proposals coming back and forth from the FCC’s Wireless Telecommunications Bureau. There has been talk that you had concerns about the interstate/state regulation. Will you explain what those concerns are?

Furchtgott-Roth: If I may just go back on universal service. The [FCC] is trying to make a section that may not be easy to interpret, but it certainly made it far more difficult in its interpretation. It is just way outside the statutory language, in my opinion, and this has potentially adverse consequences for the wireless industry.

On some of the wireless local loop issues, I am not sure I would characterize it specifically as just a concern for state jurisdictional issues. That is part of it, but it comes back again to the [FCC]NM following the law and some of the proposals that were coming up from the [wireless] bureau, I did not believe were narrowly within the law and the [FCC] historically time and time again has gotten in trouble by trying to go outside the law.

RCR: Do you believe that fixed local loop is a viable alternative for local competition to start to flourish?

Furchtgott-Roth: Yes. It has a lot of promise.

RCR: Who would regulate it, once it gets going, in your view? Would it be FCC?

Furchtgott-Roth: I think initially as a wireless service it would be the [FCC], but once it became a substitute for local wireline, it would revert to the states according to the statute. That’s not [an FCC] interpretational decision. That is what the statute requires.

RCR: Is there an easy fix to the antenna-siting dilemma?

Furchtgott-Roth: No.

RCR: Some of the carriers would like to see the FCC come in and write a rule or set down something that was pretty straightforward somewhere along the lines of the digital television tower siting NPRM that came out because it gave specific deadlines. Of course the local officials did not like that. Is there a way the FCC can step in and set the boundaries and if so, what would be those boundaries, in your view?

Furchtgott-Roth: As I sit here today I don’t have a specific answer for what those [boundaries] are. I can tell you the view among the commissioners is a reluctance to use a heavy-hand to intervene with local issues, particularly in zoning matters. But there is to some extent some conflict here between federal interests and local interests. I think all of us would like to see disputes resolved between and among the parties themselves without having the [FCC] intervene. We are probably not as far along with putting on paper our views on this as we have with the [DTV], which has some statutory buildout requirements. I think that is probably why we have seen a little bit more activity in [DTV].

RCR: There has been some talk that when there is an order on DTV t
hat part of it could be a further NPRM on wireless asking whether the rules and time lines would also work in wireless. Is that something you have dis
cussed?

Furchtgott-Roth: No. Paul have you heard anything?

Paul Misener: That is just an administrative proceeding whether you continue the current proceeding or issue a new one based on what was done in DTV. It sort of matters not. It would be unusual for the Mass Media [Bureau] to be handling [commercial mobile radio services] CMRS issues.

RCR: Would you like to explain your philosophy of resale?

Furchtgott-Roth: In a competitive market, resale is not a key. In a competitive market, carriers with capacity are only too happy to find buyers for it. There’s no need to step in and mandate through regulation resale. So it strikes me the issue is when, if at all, is regulation necessary? I think on the issue of resale, there are market conditions under which it just doesn’t make sense to have resale regulation.

RCR: Resellers claim personal communications services carriers refuse to sign resale agreements. Is there anything short of full-blown regulation to help resellers that want to get their foot in the door?

Furchtgott-Roth: I don’t know. What do you think Paul?

Paul Misener: The way the rule is currently constructed, there is mandatory resale at the lowest price offered to any customer. If there is any reluctance by carriers to deal with resellers, it is on that basis that they are required to do it at this lowest price. It is not some business decision like every other unregulated market as to what price you sell to resellers. I frankly think the market functions quite well without mandatory resale at all. There will be an efficient level of resale based on terms negotiated among the parties. It is done in other markets quite well without some feral bureaucracy mandating it at a certain rate. In short answer, no. It is against the rule.

RCR: When you were a staffer, was there any consultation with the House Commerce Committee on the Communications Assistance for Law Enforcement Act of 1994?

Furchtgott-Roth: Yes. I did not work on this issue. There was a period when I was recused from all telecom issues. There was even a mark-up on something related to CALEA.

RCR: Do you have any idea on how the [FCC] can break through the deadlock between the industry and law enforcement?

Furchtgott-Roth: Well because these issues have not been resolved, we will do our best and all of the commissioners will review the evidence as it is presented to us.

RCR: Is something going to get done before the Oct. 25 deadline?

Furchtgott-Roth: I have been given no reason to believe we won’t meet whatever deadlines.

RCR: If you could choose the most important wireless issue for the rest of your term. What would that be?

Furchtgott-Roth: I can think of several. I don’t know which I would call the most important. One would be getting to more sensible regulation. Regulation that has benefits that clearly exceed the costs. Regulation that is going to make sense with lines of business. Definitions of the past probably don’t make as much sense as they did years ago.

A second big area we have to worry about is CALEA. That certainly is fairly immediate. The third big wireless issue would be to get to more rational auction rules. It would make sense to have the [FCC]M to get out of the banking business and simply conduct auctions with money on the barrel.

RCR: Had the C-block not gone on as it did, do you think the FCC could have continued with the installment-payment concept for auctions? Is your auction regulation opinion based on what happened on C-block?

Furchtgott-Roth: No, independent of C-block. I frankly think it is beyond our statutory authority. I am not quite sure where we came up with the statutory authority to do the auctions the way we did in the past independent of whether the auction winners could make the payments.

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