ABERNATHY DOESN'T WANT TO ‘RE-REGULATE’ LONG DISTANCE PRICING

Responding to calls by state consumer advocates, FCC Comr. Abernathy said Fri. she didn’t think it was good policy to “re-regulate” long distance business. Consumer advocates are expected to file petition soon urging FCC to require long distance companies to inform consumers before changing prices. Advocates say they're concerned that consumers, particularly low income customers, are unaware of pricing changes since Commission detariffed long distance. Speaking at conference sponsored by Competition Policy Institute (CPI), Abernathy said she was “inclined to resist… calls for increased regulation of the long distance market.” She pointed out that there wasn’t any consumer notification under previous tariffing regime, either. “All that happened was carriers filed tariffs with the FCC,” Abernathy said. “It is difficult for me to believe that consumers were monitoring the thousands of pages of tariff filings the Commission used to receive each year.” Under detariffing, carriers contract directly with customers in way that other providers such as credit card companies do. FCC’s Consumer Information Bureau is keeping eye on situation, Abernathy said, and if any problems surface, agency will address issue, but so far no complaints have been lodged about it.

Abernathy also made it clear that she favored requiring fewer -- rather than more -- unbundled network elements (UNEs). She indicated she would favor reducing number of elements ILECs have to share with competitors, although she didn’t take position on which ones might be dropped. Acknowledging UNEs are valuable as entry strategies, she cautioned: “You can go too far. If you force incumbents to share every element, we'll be caught in a regulatory morass so thick that competition will never emerge.” Too much sharing hurts investment incentives for both incumbents and competitors, she said: “The FCC over the last few years focused too much on unbundling without addressing investment incentives. That’s not to say we should walk away from market intervention [but] we can do more to facilitate competition if we resist the urge to micromanage every detail of the relationship between the incumbent and competitor.” Best route is to select “small number of core requirements and enforce them vigorously,” she said. Asked from audience whether FCC had considered time limit for requiring UNE sharing, Abernathy said that’s “one of the options we are exploring.”

Bruce Mehlman, Commerce Dept.’s asst. secretary for technology policy, said technology was high priority for Administration but efforts to gain consensus on broadband policy were “complicated by industry infighting,” among other things. In debating proper role of govt., some have advocated “federal highway model” in which govt. would build out network. But such “government deployment advocates” don’t say what that means for private industry, he said. Mehlman said govt. could work on several tracks to support broadband deployment: (1) Working with FCC to “minimize regulatory costs and uncertainty.” Among issues to look at there is federal spectrum policy, he said, saying he thinks unlicenced band has good potential. (2) Educating companies “about the value of high-speed connections,” using “bully pulpit to identify and commend innovative uses.” (3) Encouraging local and state govts. to adopt “best practices” on how to best balance bandwidth needs with issues such as rights of way, urban planning, tower siting. (4) Supporting international policies that promote broadband. (5) Encouraging industry to “find areas of agreement,” noting he recently was given studies by different parts of industry that had exactly opposite conclusions on effect of Tauzin- Dingell bill.

On later panel on broadband technology, Northpoint CEO Sophia Collier took swipe at FCC for having “industry policy that favors satellites” and impedes development of new network technologies such as hers. Lack of adequate spectrum won’t be solved until FCC reforms its licensing process, which appears to be “stacked against us,” she said, noting that Northpoint has waited for years for clearance to start service. Robert Pepper, chief of FCC’s Office of Plans & Policy, said he didn’t want to turn panel into debate over “one technology.” He said FCC didn’t favor satellites but rather was bound to follow law that prohibited auctions for satellites. Collier said it appeared FCC was “sensitive” about “favoritism to the satellite industry.”