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January 02, 2009

Will the FCC Shift Direction Under Obama?

By Barlow Keener, Attorney

After eight years of Republican control, the helm of the FCC (News - Alert) is being handed over to a new majority. Commissioner Tate will retire in a few days. FCC Chairman Martin will then be replaced with Obama’s as yet unannounced choice. The telecom industry leaders are asking: What difference could there be? Will CLECs experience a resurrection? Could we see UNE-P or a fiber-to-the-home (FTTH) UNE again? One thing is clear, the FCC will not be the same and there will be change.

The front-runner for the new Chairmanship is reportedly former FCC Commissioner Reed Hundt’s chief counsel Julius Genachowski. Mr. Genachoski is very close to President-Elect Obama. He attended Harvard with Obama and has been advising Obama on technology and innovation throughout the campaign. Recall that Commissioner Hundt and his team, which included Mr. Genachosiki, were the drivers behind UNE-P. Commission Hundt believes that wiping out UNE-P “went against the congressional intent” of the 1996 Telecom Act.
It is evident from the House Committee on Energy and Commerce’s December 2008 report blasting Chairman Martin’s FCC leadership that Martin did not build good relations with Democrats in Congress. The report title sums up the chasm existing between Congress and the Chairman: “Deception and Distrust: The FCC Under Chairman Kevin J. Martin.” What could possibly have generated such a scathing send-off for Chairman Martin? The report provides an indication of the root of the problem: “Chairman Martin’s heavy-handed, opaque, and non-collegial management style has created distrust, suspicion, and turmoil among the five current Commissioners.”
On December 12, 2008, Congressman Waxman, the new Chair of the House Committee on Energy and Commerce, requested the Chairman Martin cease all agenda decision making at the FCC except for digital television transition issues scheduled for February. In response to the letter, the FCC canceled its agenda which would have addressed the controversial AWS-3 decision to require free wireless Internet. Thus, it appears that the Republican FCC majority rule has ended.
Taking a look back at the major FCC decisions over the last eight years one can see that they were not what the Democrats wanted. In August 2003, the FCC’s majority issued the TRO ending line-sharing and FTTH, while Copps and Adelstein concurred in part, they dissented in large part. Copps stated:
The Commission has recognized time and again that loops are the ultimate bottleneck facility. Yet, here the Commission chooses to perpetuate the bottleneck.
In 2004, the majority FCC Republican Commissioners voted to end the “pick and choose” rule for CLEC interconnect agreements. Copps again dissented: “Pulling apart the fabric that supports competition will not speed its arrival...” Later the same year the FCC majority ended the fiber to the curb UNE. Commission Copps dissenting stated:
“I don’t believe competitive telecommunications have been faring very well under our watch and this particular proceeding strikes me as yet another in a series of prescriptions this Commission is willing to write to end competitive access to last mile facilities.”
The FCC majority brought in the 2005 New Year by eliminating UNE-P. Commissioner Adelstein lamented:
“With this Order, the Commission officially cuts the cord on the local competition provisions of the Telecommunications Act of 1996, the companies and investors which sought to deliver on the promise of the Act, and the American consumers to whom that promise was made.”
The final body-blow to wireline competition was delivered in September 2005 when the FCC declared DSL transmission facilities to be Title I “information service” not available as a Title II “telecommunications service” to ISPs. While the FCC’s order claimed the U.S. Supreme Court’s Brand X decision required the FCC to reclassify DSL as an information service, the Supreme Court order unambiguously provided direction otherwise declaring:”...we express no view on how the Commission should, or lawfully may, classify DSL service.” In his statement, Commissioner Copps made his feelings clear regarding the DSL reclassification order: “This is not a situation of my making or my preference, and I believe that it does not inure to the benefit of this institution or to consumers across the land.”
Based on eight years of statements from the dissenting Democratic minority and the prior FCC experience of Obama’s closest technology advisors, it is incontrovertible starting on January 21, 2008, that the Obama FCC majority will be turning the ship in a new direction. The new FCC will clearly not maintain the status quo. It could mean a return to FTTH as a UNE. Or it could be dramatic re-regulation of UNE offerings or the separation of the key bottleneck last mile facilities such as the central office (without the switch), loops, and outside plant employees. Both Commissioners Copps and Adelstein have solid commonsense and care deeply about delivering competitive voice and broadband options to all Americans, so whatever changes are made they will be in the best interests of the American consumer. 

Barlow Keener, attorney with Keener Law Group, writes the Law & Regulation column for TMCnet. To read more of Barlow's articles, please visit his columnist page..

Edited by Greg Galitzine

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