CONGRESS CALLED ON TO REVIEW 1996 ACT TO ADDRESS VoIP ISSUES

It’s time for the 1996 Telecom Act to be reviewed, Hill and FCC panelists said at a Comnet conference in Washington Wed., noting, however, that it could take “some time” before that would be done. House Commerce Committee staffer Greg Rothschild said as VoIP was emerging as one of the critical issues to be addressed by the Commission and Congress, “there is very little in the Act on how to regulate [broadband], and on whether or not it should be regulated… The ‘96 Act has very little application to the questions we are dealing with now.” Citing her previous experience with the 1996 Act, FCC Comr. Adelstein’s aide Lisa Zaina said that when writing a new act it was important to consider how it would be implemented.

Speakers said Congress probably would become involved primarily because of lack of clarity on issues such as law enforcement access to networks, universal service and intercarrier compensation. Rothschild said law enforcement access to networks probably would get more Hill attention than any other VoIP-related issue, asking: “If we don’t have regulation, how are we going to” ensure that? He said President Bush made it clear in his State of the Union address that homeland security was the priority to his Administration. He cited concerns by the Justice Dept. that the FCC’s deregulatory policies were hindering law enforcement efforts.

“There is a tension right now between the President’s policy on homeland security and the FCC chairman’s policy of deregulation.,” Rothschild said: “Whether that tension will be resolved at the Commission… we have yet to see. But there are a lot of eyebrows raised certainly on the Hill” by how “a disconnect between the Department of Justice and the FCC on this issue” would be addressed. Rothschild said Congress “could pay to get CALEA done, but one of the reasons it wouldn’t” was because “money is very, very difficult to come by.” He said there already was a budget deficit and Bush’s intention to make tax cuts permanent “means less revenue coming in.”

Zaina said although it wasn’t a good idea to apply old rules to new technology such as VoIP, the Commission should provide “clarity, clarity and more clarity” on issues such as universal service, 911 and other social policy factors: “We have to get there, and to get there as quickly as our process will allow us.” Daniel Gonzalez, aide to FCC Comr. Martin, said Martin had “raised concerns about not imposing economic regulations on [VoIP] services, but seriously dealing with public safety and other issues.” With the FCC struggling with VoIP-related issues, Rothschild said one of the things Congress could do was to “really take a look at what’s out there and decide how [VoIP] should or shouldn’t be regulated.”

Responding to a question on what the govt. should do to encourage broadband deployment in the U.S., Rothschild said: “We were active in broadband deployment in the wrong way” discouraging big companies from investing. However, he said the FCC last Feb. had “voted to change the course of that. We should see now if that works.” He said Congress would “get more involved” by starting “spending more time” to examine where broadband wasn’t deployed.

Commenting on speculations about telecom industry consolidation, Rothschild said with News Corp. buying Hughes Electronics and its PanAmSat and DirecTV last year -- “a merger with significant consumer implications” -- it was “hard to imagine a merger that wouldn’t be completed with minor modifications.” He said now that the spectrum cap had been increased, the FCC probably would consider a public interest aspect when looking at wireless mergers: “My guess is that you have to see the wireless industry to go 6 to 5 [or to 3 companies] before Washington will really have a problem with a merger… We went from 7 Bell companies to 4 with very little activity on Capitol Hill.” Senate Commerce Committee Staff Member William Bailey said there would be “some isolated clamor on the Hill but not substantial… I can envision some members being concerned if there is foreign ownership involved.”

Responding to a question on what would be likely to happen with the FCC’s Triennial Review Order (TRO) currently being challenged in the U.S. Appeals Court, D.C., (see separate story this issue), Zaina said: “If I knew, I would buy a lottery ticket… One thing I know for sure is that this decision will be handed down relatively quickly… The cycle for the timing of the oral argument moved so quickly that the intent is to decide it quickly.” She said “whether the Commission will have an opportunity to look at this again with further guidance from the court… we'll certainly accept that offer and have a further analysis and further benchmark to determine” what Congress meant.” Gonzalez said the Commission would approach the TRO as any of its “other major orders challenged in courts.” He said Martin agreed with FCC Chmn. Powell that the Commission should “vigorously defend its rules.” He said with respect to broadband, the order wasn’t clear on whether multidwelling units were subject to regulatory unbundling relief, and the Commission should clarify that further.

Looking into the future, Zaina and Gonzalez said the Commission this year would focus its attention on: (1) TELRIC review. “All the commissioners feel it’s time to ask questions if [TELRIC] is working,” Zaina said. (2) Intercarrier compensation. “These will be 2 very, very big issues for the FCC this year,” Zaina said. (3) Universal service contribution. “With new competitors coming to market,” there will be a “greater pressure” on universal service, Gonzalez said.