GOP-controlled FCC faces full plate

Washington, D.C. -- The U.S. Federal Communications Commission under the new Bush administration will hear a familiar plea from network industry representatives in Washington: Show regulatory restraint when considering emerging telecommunications services and technologies.

The FCC began its transition under the Republican administration last week after Chairman William Kennard, an appointee of President Bill Clinton, concluded his tenure on Friday.

The new commission, which is expected to be headed by incoming FCC Commissioner Michael Powell, could face major issues, such as an internal agency reform effort spearheaded by the new chairman of the U.S. House Energy and Commerce Committee, Rep. W.J. "Billy" Tauzin (R-La.). But there are other less-sweeping agenda items, and the plea for restraint will be loud and clear, industry officials say.

That reform and reauthorization of the FCC is a priority of the House Energy and Commerce Committee, says Ken Johnson, communications director for the panel, formerly called the House Commerce Committee.

"If we made one mistake when we passed the Telecommunications Act of 1996 it's that we didn't reform the agency at the same time we reformed the law," Johnson says. "We intend to vigorously pursue a very ambitious and aggressive agenda, which will include a top-to-bottom look at the FCC."

Specifically, Tauzin's initiative aims to rein in the FCC's power concerning merger review. While the U.S. Department of Justice and the U.S. Federal Trade Commission have legitimate oversight over mergers, Johnson says the FCC has advanced a political agenda by placing conditions on mergers.

The FCC also is expected to continue monitoring the efforts of companies in terms of their self-regulation front, officials say.

Some packet-switched telecommunications carriers have pledged to participate in a voluntary trial of major outage reporting, says Tricia Paoletta, vice president of government relations for Level 3 Communications. The idea is that if companies show good faith by voluntarily reporting network outages, it will be less likely the FCC will impose regulation.

Currently, traditional telecommunications companies, such as AT&T and the Baby Bells, must report major outages involving more than one carrier and more than one city. The industry is concerned that the FCC might extend that to companies that own and operate packet-switched networks, Paoletta says.

Level 3 CEO James Crowe is chairman of the Network Reliability and Interoperability Council (NRIC), an industry board of officials from 40 companies that advises the FCC. NRIC began the voluntary reporting trial last year by asking major trade associations, such as the Cellular Telecommunications Industry Association and the National Cable Telecommunications Association, to ask their members to participate.

Paoletta, who heads NRIC's steering committee, says she's heard of no resistance, and that the industry knows it's being watched. The industry also believes that Powell, son of Colin Powell, President George W. Bush's nominee for secretary of state, will turn to regulation only as a last resort.

"At the same time, that means a voluntary approach has to work, and the industry has to find ways to make it work," she adds.

Other areas where industry players are taking voluntary steps to try to stave off FCC regulatory action are interoperability and peering. Paoletta says the network industry believes Powell will want to see interoperability issues worked out on a self-regulatory basis, but if industry players don't cooperate, the industry could be threatened with regulation because the economy's dependence on IP networks continues to grow. Voluntary measures aimed at avoiding government intervention are also being tried by ISPs on peering agreements, which cover interconnection and traffic issues between large and small ISPs.

Representatives of other trade associations also are watching the FCC for signs that it could take a more proactive stance on regulation, and some observers expect a new focus on broadband, broadband access issues and on conditions placed on mergers.

Barbara Dooley, president of the Commercial Internet Exchange Association, says 2001 would be another big year for applications from local telephone companies to provide long-distance service, a process spelled out in Section 271 of the telecom act.

"You can expect there will be a huge amount of interest from companies and ISPs on every single 271 application," Dooley says.

Other topics Dooley says are likely to come before the FCC this year include the implementation of a new law enacted last year that requires schools and libraries that receive government money to install filters to block content harmful to children. The FCC is expected soon to post a notice of its plans to write the rules on the filtering requirement.

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