SANTA CLARA, CALIFORNIA - The U.S. Federal Communications Commission wants to move quickly to upgrade regulations so that service providers can accelerate the construction of broadband networks, FCC Commissioner Kevin Martin told telecommunications industry executives here Wednesday at the Supernet trade show.

Martin, one of three commissioners who work under FCC Chairman Michael Powell, said an uncertain regulatory environment has been one factor holding back development of broadband services.

"Too often in the past, the Commission has been unclear about how it wants to move forward," Martin told an audience of executives and engineers from carriers and equipment providers. Most importantly, the requirement that incumbent carriers "unbundle" their networks to let competitors use them, under the Telecommunications Act of 1996, has led to confusion over details, he said.

The Commission hopes to wrap up proceedings on four critical issues by the end of this year, Martin said, acknowledging an attendee's concern that a possible recovery in the telecommunication equipment market could be held up if carriers are waiting on new regulations.

The proceedings will review the following elements of regulation:

-- the performance measures that the commission uses when it determines how well incumbent carriers have unbundled their networks

-- which elements of an incumbent carrier's network need to be unbundled to give competitive carriers a fair shot at building successful services

-- how broadband Internet access over cable TV networks should be regulated

-- how broadband services as a whole, which were not addressed in the 1996 law, should be regulated. For example, the FCC might decide whether or not carriers should be required to follow the same tariff rules that cover traditional phone service.

Developing widespread broadband services on multiple networks will help the U.S. economy and the country's competitiveness in the long run, Martin said, echoing the comments of other speakers at this week's conference. Rapidly updating and clarifying regulation is a key to making this possible, he added. Changing networks require different rules than did the static voice networks for which many of the current regulations were written.

"We really need to move forward on this as quickly as possible. . . . if it's going to be a national priority," Martin said.

The commissioner also praised a proposal in the Bush administration's economic stimulus package, currently moving through Congress, that would reward carriers for making new capital investments soon. Those that invest in infrastructure before a certain date would be able to depreciate those purchases over a shorter time period than the usual one defined under tax laws for carriers.

Martin described it as a recognition of how quickly technology now changes.

"The government needs to reflect that in its depreciation rules," he said.

Addressing the rapid consolidation taking place in the broadband industry, the FCC plans to take a more focused look at proposed mergers and try to avoid "protracted negotiations" over the conditions under which each deal is approved. Any condition the government places on a merger must address specific consumer concerns, Martin said.

An executive at one broadband provider that has felt the recent winds of change welcomed the idea of updates to current regulations.

"They can make it easier for people to make investments . . . and having clarity (about the rules) is very important," said Milo Medin, chief technology officer and senior vice president for engineering at Excite@Home Inc., who also addressed the conference Wednesday. Excite@Home, which has declared bankruptcy, is now winding down its operations.

However, Medin added, a recovery in the telecommunications business depends more than anything else on the economy bouncing back.

IDG News Service

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