FCC: Our Ties That Bind

CHICAGO — Commissioners at the Federal Communications Commission (FCC) told SUPERCOMM attendees their hands are tied regarding competition rules that that the telecommunications industry calls unfair.

Officials at telephone companies are angered over requirements that force them to negotiate contracts, on an individual basis, with local communities around the U.S. to provide video services. Earlier this week Ivan Seidenberg, Verizon chairman and CEO, called for FCC reform to bring “parity of entry” for carriers.

Meanwhile, their cable company counterparts have free reign to deploy telephony service nationwide without having to open up their network to competitors.

The different approach are a result of the Telecommunications Act of 1996, which made a distinction between information service providers and telecommunications service providers.

The former dealt with companies that provide content over a telecommunications service. In 2002, the FCC declared that cable operators fell under the information service provider category. That left them with more room to move, compared to the regulation-heavy environment that telecommunications providers face.

Kathleen Abernathy, FCC Commissioner, said the law is a historical anomaly. The job now, for the FCC, is to update the policy, she said.

“One of our basic obligations and one of our most challenging obligations is to come up with a new framework and come up with a framework in the context of a statute that isn’t outdated,” she said. “It’s no one’s fault. Technology always moves faster than government can, and that’s good.”

Convergence has added a wrinkle to the telecom landscape. Where the two industries once once maintained their own fiefdoms, now TV operators are branching out into telephony and telephone companies are setting up TV content.

The blending of the two industries came faster than people thought, said Kevin Martin, FCC chairman, in a keynote address at SUPERCOMM Tuesday. However, he said one of the priorities in the FCC is to create an environment that provides a level playing field for both service providers and cable operators, with an emphasis on de-regulation.

“I think the commission can do some things in its current authority, whether you talk about just restructuring the agencies or you talk about addressing the fundamental differences that these service providers may face,” he added. “It can unintentionally create barriers for them getting into each other’s businesses and I think the commission needs to do all that it can to try to address and create that level playing field.”

For the time being, both sides of the debate are likely going to have to wait on other events before anything’s decided.

An ISP named Brand X sued the FCC and in 2003 the 9th Circuit Court of Appeals overturned the FCC’s decision to classify cable operators as information services.

The ruling prompted the FCC to go to the Supreme Court for a final decision. Lawyers from both sides argued their case earlier this year.

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