Federal Communications Commission (FCC)

As FCC gears up for Thurs. vote on ultra-wideband (UWB),several lawmakers urged Commission to not let date slip again on item. Agency had deferred vote at Dec. agenda meeting in response to letter from Commerce Secy. Donald Evans seeking more time to evaluate safety-of-life and other issues. Among apparent concerns of some on Capitol Hill and in private sector is lack of transparency in parts of negotiating process between NTIA and FCC. Because of high stakes nature of UWB proceeding, several industry observers said it had brought to forefront natural tension between FCC’s regulatory role over commercial spectrum and NTIA’s purview over govt. bands.

Federal and state regulatory policies are impeding consolidation of rural telephone lines, growing movement led by mid-sized companies such as CenturyTel and Citizens Communications, panelists said at Legg Mason investment conference in N.Y. on rural telephony Thurs. From regulators to rural operators, speakers said consolidation is latest trend in rural phone business, stoked by divestiture of lines by Bells such as Verizon and Qwest. Verizon has divested hundreds of thousands of former GTE lines throughout country, many of them acquired by consolidators, while others such as Qwest continue long-time trend to eliminate unprofitable exchanges. In addition, consolidators buy up small telcos run by families that no longer want to be in business. Consolidators generally can make more money from rural lines than Bells can because they have more access to universal service funding and their smaller size enables them to act more flexibly, panelists said.

Broadband is being deployed “in a reasonable and timely manner,” FCC said in its 3rd annual report to Congress on availability of advanced telecom services. Report, which was issued Thurs. and includes data through June 30, 2001, said market for advanced services continued to grow, with both availability and subscribership increasing significantly. Report said number of subscribers had increased to almost 10 million, despite widespread economic downturn. Chmn. Powell said Commission wouldn’t flag in its efforts to promote broadband, despite positive steps cited in report. “It is one of our highest priorities and is never far from our thoughts as we decide communications policy,” Powell said.

Now that wireless is becoming alternative communications technology, rather than accessory, policymakers and industry must grapple with issues such as service quality and regulatory parity, panelists said at Precursor Group conference in Washington Wed. Brian Fontes, vp-federal regulations for Cingular Wireless, said one emerging theme at FCC was emphasis on flexibility, which historically had served wireless industry well. “The concept of flexibility is increasingly useful and important,” he said: “The problem is how do you define flexibility.” Several panelists described industry as being at crossroads between regulations designed for less competitive wireline environment and industry that has grown so big that regulatory oversight still is needed. “We have to be mindful to not over- regulate,” NTIA Deputy Asst. Secy. Michael Gallagher said. “There is a tendency when an appliance has reached that level of importance in society to then say well, there needs to be a firmer hand.”

House Commerce Committee Chmn. Tauzin (R-La.) told investment community Wed. that he was enthusiastic about ultra-wideband (UWB) wireless technology and hoped FCC would look at it carefully. Proposal to permit UWB products to operate as unlicensed Part 15 devices is expected to be on FCC agenda at Feb. 14 meeting, he said in speech at Precursor Group conference in Washington. Tauzin said he visited UWB company Time Domain and was impressed by its founder Larry Fullerton, “an interesting guy who has been called the new Marconi.” Tauzin told investors UWB was trend to watch, explaining how technology goes through walls, could result in high-tech home security systems, communications devices for military, disaster recovery aids. “My hope, my prayer, to the Commission is to give it a good look,” he said. Tauzin said that taking up “twin issues” of privacy and security were among his Committee’s most important tasks this year. “The first battle line” is copyright, he said, “how to provide a digital product without losing value… coupled with security needs.” He said other “things to watch” were: (1) Efforts to develop privacy policy that would “enhance private efforts to self-regulate. (2) Broadband deployment. (3) Digital TV transition. (4) “Increasing capacity of wireless communications.” He also made pitch for Tauzin- Dingell bill, saying it was “not about pleasing the Bells” but rather was designed to “complete the Telecom Act.” Act didn’t contemplate growth in data communications and Internet, he said. As it is now, Act stymies development of high-speed data transmission because of restrictions on Bells, he said. Act’s mistake was to put FCC in charge of deciding when Bells could provide interLATA communication, which is required to offer broadband effectively, Tauzin said. Decision was left to “these bureaucrats whose raison d'etre is to regulate,” he said. “We left it to them to eliminate regulations, what were we doing? The FCC has become an agent for the past.” He said he thought Tauzin- Dingell would pass House and “then we will go and deal with Mr. Hollings [Sen. Hollings (D-S.C.) and chmn. of Senate Commerce Committee]), who has a different view.” Talking with reporters later, Tauzin said if Committee’s meetings with industry leaders on DTV transition didn’t result in agreement soon (CD Nov 30 p6), legislation to resolve issue probably would be introduced in April-May time frame. He said there had been progress in last 2 meetings and another was planned later this month. Meanwhile, spokesman for House Commerce Committee said it appeared House leadership would schedule vote on Tauzin-Dingell on either Feb. 27 or 28, slightly sooner than March projection given when bill was pulled from floor in Dec.

Although he signed FCC filing on Transportation Dept.- funded research on ultra-wideband, Stanford U. Prof. Bradford Parkinson said he wasn’t involved in conducting study, meaning his corporate ties to GPS developer Trimble posed no conflict. In Sept. 2000, Parkinson, who is widely viewed as “Father of GPS,” jointly submitted to FCC ex parte filing with other Stanford researchers outlining preliminary results of UWB tests conducted by GPS Research Lab at Stanford and funded by DoT. “We urge the Commission to proceed with great caution and deliberation,” said filing by 4 professors, including Parkinson, that described research challenges of analyzing UWB-to-GPS interference. But Parkinson said Mon. his role in research, which had been among studies cited by federal agencies concerned about potential of UWB emissions to cause harmful interference to GPS, was to evaluate results after test phase was complete. He said Assoc. Prof. Per Enge oversaw research itself.

NTIA released report Fri. outlined need for more spectrum for critical infrastructure providers in energy, water and railroad sectors, concluding that urgency of those issues might have changed following Sept. 11 terrorist attacks. Report to Congress, required by fiscal 2001 appropriations act that covered Commerce Dept., catalogued congestion that infrastructure providers faced in land mobile portion of spectrum. “It is of utmost importance that the Federal Communications Commission revisit these critical issues in order to accommodate the increasing role these industries play in maintaining quality of life,” report said. It cited continued use of spectrum as “essential to the current and future operations of these industries.” NTIA said industry feedback it received in preparing report pointed to spectrum that was “either congested or quickly approaching critical mass, thus leading to problems of interference.” NTIA said industry consensus called for additional spectrum, citing lack of bands available for new users. Report has been closely watched by private wireless industry who have raised concerns about Nextel proposal pending at FCC that would reconfigure some public safety, private wireless and commercial operators at 700, 800 and 900 MHz.

FCC Chief of Staff Marsha MacBride told Public Safety National Coordination Committee (NCC) Fri. that public safety interoperability and other issues were part of emphasis of Commission’s homeland security efforts. MacBride was named by FCC Chmn. Powell in Nov. to head agency’s Homeland Security Policy Council. In presentation to NCC, MacBride outlined homeland security efforts that were stressing broader areas than in past for network protection, including mass media and wireless. Network Reliability & Interoperability Council (NRIC), which played key coordinating role during FCC’s Y2K efforts, is refocused on homeland security, including lessons learned and existing vulnerabilities, MacBride said. Composition of NRIC has shifted from historical wireline emphasis to include wireless, cable and Internet service providers, she said. In broadcasting and multichannel video programming, Commission is starting Federal Advisory Committee (FAC) to examine infrastructure reliability and security issues. Among other themes that emerged during NCC general membership meeting was need for better public safety interoperability, which has gained renewed public attention following Sept. 11 attacks.

FCC Chmn. Powell’s special counsel Mary Beth Richards said Thurs. she was “confident” Congress would approve overhaul of agency in coming days. She said she had spent much of this week, and would spend much of next, with Hill staffers to “make sure they are comfortable with the plan and understand the benefits.” Letter outlining changes went up to Congress Jan. 17, and congressional appropriators of FCC budget have 15 days in which to express objections. “I am hopeful that there are no surprises. I am hopeful that they all agree that it is a wise and judicious decision,” Richards said in conference call hosted by Communications Daily. Given that changes must be published in Federal Register before they can take effect, Richards said she expected effective date either in late Feb. or early March. In meantime, once congressional approval is assured, Commission plans to issue news release outlining staff changes, specifically who will head divisions and makeup of front office staff. Release, to include structural charts, also will be posted at Commission’s Web site, Richards said.

FCC is “very sympathetic to regulation parity” between broadband services provided by cable companies and telcos “but there are limits to what the Commission can do,” Comr. Martin said Wed. in Comnet session in Washington. In What’s Ahead in Communication Policy and Regulation he said 2 deployment models were “regulated very differently.” Citing current cable open access proceeding at FCC, Martin said he was “hesitant to apply legacy regulations” to cable industry: “I am worried about regulating up.” When Commission opens proceeding and then fails to reach decision, uncertainty created can dampen investments in new technology, he said: “The Commission needs to be careful with regulatory parity” and “not impose new burdens on new technology.” Regulatory parity should be implemented “with very subtle tools,” otherwise it could “slow deployments [in markets] where cable has been very successful,” he said.