FCC Telecommunications Rulings Face Opposition In Congress

by Glen Shapiro, LawAndTax-News.com, New York

04 March 2003

After the US Federal Communications Commission narrowly ruled that the Baby Bells would have to continue sharing their 'last-mile' local copper voice lines with competitors, FCC Chairman Michael Powell told a Congressional hearing last week he believes the Bells will begin investing in high-speed fiber lines, despite their negative reaction to the ruling.

Although the FCC ruling also freed the Bells from having to share their high-speed fiber lines with broadband competitors, the House Energy and Commerce Committee had been highly critical of the Commissioners before the hearing. W.J. "Billy" Tauzin (Rep.-La.), the chairman of the Committee said: "The FCC's decision is another body blow to the American economy. This palace coup . . . has breathed new life into the dying era of big government control over US telecommunications policy.

"The FCC decision," said Tauzin, "again points out the urgent need for Congress to enact new legislation designed to promote real - not phony - competition in the marketplace. Given the FCC's lack of leadership, I am now prepared to immediately begin that debate."

The Bell operating companies themselves warned that innovation, jobs and new investment in services will suffer because of the ruling, and promised court action against the FCC. Ivan Seidenberg, CEO of Verizon said the company would be seeking a reversal of the FCC's ruling, and the CEO of BellSouth, Duane Ackerman, said the company would be more tentative about its capital expenditures with new investments.

But Michael Powell told the hearing, of the Commerce's Committee's Telecommunications and Internet Sub-Committee: "We'll see. I think we're seeing a period of bitter reaction. It's a public affairs reaction, not a boardroom reaction. At the end of the day, the economics will be more compelling."

Rep. Fred Upton (Rep.-Michigan), chairman of the subcommittee, said: "Was it a good decision? Hello Washington, this is Wall Street calling, the answer is no. Clearly the reaction from Wall Street the last few days should convince us that the FCC's decision has created confusion and concern. We even have analysts talking about key telecom equipment makers and innovators as Lucent as 'dollar stocks' and this decision seems to have spooked investors even further."

"The Commission seems to have adapted a chaotic mix of often conflicting rules that in one instance seem to promote investment and growth and on the other hamstring it in a morass of what will likely be 52 proceedings around the country," continued Upton. "The Commission, I believe, should have focused on promoting clarity, certainty, investment and growth. If they had used these objectives as their touchstones, I believe they would have come up with an order that reduces, not increases, unbundling; reduces, not increases, regulatory procedures; and is based on a national framework."

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