FCC AND NTIA CALL FOR REGULATORY PROTECTION FOR WI-FI, VOIP

August 20, 2002 |Miscellaneous

ASPEN -- New technologies and services such as Wi-Fi and Voice-over-IP (VoIP) should be sheltered from burdensome regulation in their infancies, with regulators perhaps even acting proactively to promote their growth and spur competition with incumbent industries, FCC and Commerce Dept. officials said here Mon. Speaking at Aspen Summit organized by Progress & Freedom Foundation, FCC Comrs. Kathleen Abernathy and Kevin Martin, along with NTIA Dir. Nancy Victory, agreed on need for what Abernathy called new services doctrine, and even drew some support from industry representatives who would find themselves at regulatory disadvantage in such model.

Abernathy called for regulators to “exercise restraint with new technologies and services” to promote competition and to reflect fact that govt. has poor track record at predicting marketplace. That approach “embraces double standards for a while,” Abernathy acknowledged, but said once new technology or service was viable, “then it is incumbent on regulators to reexamine existing regulation” on mature competitors. Asked specifically about Wi-Fi, Abernathy went beyond hands-off mode to proactive one. “Unlicensed spectrum is just phenomenal,” she said, referring to spectrum used by 802.11 broadband extension technology. “We should seriously look at allocating more.” Victory, who called herself Administration’s spectrum czar, said “I agree with Kathleen.” Victory said Wi-Fi was “an excellent example for her thesis” of new services, saying it should be allowed to grow in “totally regulatory free zone.” She admitted that she wasn’t sure what business future of Wi-Fi was, but said “there are a lot of different business plans out there, and we need to maintain the opportunity for experimentation.”

At least one attendee at summit was skeptical of Wi-Fi’s financial viability as business model. Nextel CEO Timothy Donahue said he was “excited” by Wi-Fi and its growth, but saw it as peripheral service rather than as technology on which to build business. He specifically dismissed chances of Boingo Wireless, company created by Earthlink’s founder that is seeking to connect Wi-Fi hot spots across country and charge individuals for access to those hot spots. Like many others, Donahue said security risks remained high for Wi-Fi. (PFF set up Wi-Fi network in St. Regis Hotel where conference is being held, and was even selling Wi-Fi PCMCIA cards to anyone who was interested. Network proved to be quite spotty in its initial run, however, with one attendee attributing it to configuration problems between Wi-Fi router and DSL connection in business center. At least one attendee told us he wouldn’t use node because of security concerns.)

Martin said Commission also needed to act faster on existing rulemakings. Citing numerous rulemakings in progress affecting broadband, he said agency could free ILECs from unbundling for DSL fiber, create lesser unbundling obligation “or do nothing,” but most important thing to do was to make announcement quickly, especially given uncertainty in telecom market. “It’s critical that we resolve some of the issues that we have teed up this year,” he said. Abernathy agreed, saying: “I'd like to have them done by December. I don’t see why we can’t… I certainly won’t be the one to hold them up, but I don’t have complete control once it reaches the 8th floor.” Broad policy debates are important, Martin said, but “we need to take incremental steps more quickly.” While not taking specific stand on rulemaking for ILECs, he repeated his opposition to imposing open access requirements on cable modem service providers. NCTA Pres. Robert Sachs, also on panel, echoed that, but said rather than focus on regulatory parity by burdening cable, policy-makers should try “deregulatory parity.”

Victory pointed to growth of wireless industry, which is under light regulation, as example of how regulators should approach telecom. She said more people were substituting wireless for landline phone service, which she said meant that regulators would be justified in examining whether some rules should be reduced for landline service. “We're starting to see increased substitutability,” she said, while acknowledging “I'm not naive enough to think we're ever going to have perfect regulatory parity.” USTA Pres. Walter McCormick faulted Bush Administration for not moving quickly enough to spur broadband, but Victory said “it’s very important to get these policy decisions right.” She said at NTIA she was focusing on spurring wireless broadband, including 3G, Wi-Fi and HDTV.

VoIP also was cited as emerging technology that might be subject to level of protection advocated by Abernathy. Cable industry for years has been working to roll out VoIP with its cable modem service, and has some subscribers. Sachs said “Voice-over-IP is something that has great promise,” and suggested that FCC might want “to adopt some version of Kathleen’s nascent services doctrine.” ILEC lobbyist agreed. Verizon Senior Vp for Public Policy Tom Tauke said: “Voice- over-IP will be a reality next year.” However, he said, regulators shouldn’t burden it with E-911 obligations, CALEA, taxes and other regulations “on day one.” Tauke made his comments before Abernathy, Victory and Martin called for lessened regulation. He said that for him, working for circuit-switched phone company, “it’s a temptation to say [VoIP] is not competing on a level playing field, but we have to overcome that, and regulators have to overcome that.” -- Patrick Ross

Aspen Summit Notebook…

Federal govt. must “double the amount of spectrum for wireless” if industry is to remain viable and to debut new technologies, Nextel CEO Timothy Donahue said Mon. at Aspen Summit. Donahue joined Progress & Freedom Foundation Pres. Jeffrey Eisenach in praising NTIA Dir. Nancy Victory, who was in audience, for setting out plan to clear 90 MHz of spectrum currently occupied by govt. agencies. “I'm looking forward to working with the FCC to make sure that spectrum comes on line in a timely fashion,” Donahue said, but that spectrum is “not nearly enough if we are to realize a wireless future.” Citing spectrum he saw as poorly used such as UHF TV bands, he said “the regulatory process should allow for constant reevaluation… bandwidth should be in place when technology becomes available.” Donahue called that his “long-term vision,” but said in short term FCC within 90 days should adopt consensus plan Nextel and many other licensees in 800 MHz band had developed to reduce interference for public safety agencies. “We can no longer accept knocking cops and firemen off the air,” he said: “Somebody is going to lose their life as a result.”

NTIA Dir. Nancy Victory had plenty of opportunities to blush here Mon. as speaker after speaker pointed her out in audience and thanked her for her recent plan to clear 90 MHz of spectrum currently occupied by govt. agencies, as step for wireless industry to continue to deploy 3G high-speed Internet services. There were some concerns voiced, however. Progress & Freedom Foundation Pres. Jeffrey Eisenach said plan called for spectrum relocation fund to aid federal agencies departing spectrum. “Congress has to pass it,” he said, otherwise wireless carriers will find themselves in difficult negotiations with federal agencies.

Charter Communications CEO Carl Vogel was scheduled to be on panel on convergence here but didn’t show. PFF Pres. Jeffrey Eisenach diplomatically referred to fact Charter on Fri. announced it was under investigation by grand jury in St. Louis by saying that Vogel was addressing “some pressing business back at headquarters.” Vogel’s absence meant panel featured only ILEC, DBS and wireless representatives.