Get Out of the Business of Regulating Copper Wires, Say FCC Critics at Internet Protocol Event

WASHINGTON, February 8, 2013 – The Federal Communications Commission is not able to flexibly adapt to changed  circumstances in the communications world, according to officials participating in a January 30 panel on here the transition to internet protocol networks.

With the topic in hand of the “retirement” of traditional copper wiress, and the regulatory paradigm that has governed them, AT&T Senior Executive Vice President James W. Cicconi called on the FCC to re-asses existing regulations concerning existing networks – as well as rules governing wireless frequencies.

As the world we live in grows increasingly reliant on broadband and internet communications, the public switched telephone network – also know as the PSTN — is slowly becoming obsolete, Cicconi said. However, the FCC still requires the regulation of major telephone companies  like AT&T.

In December 2012, the FCC established the Technology Transitions Policy Task Force, whose stated goal was to “best ensure that our nation’s communications policies continue to drive a virtuous cycle of innovation and investment, promote competition, and protect consumers.” Some believe that it is vital for the FCC and this task force to set an immediate date to complete the transition to internet-protocol networks.

Cicconi said, for example, that only 30 percent of AT&T customers currently used wired lines. (The rest have flocked to wireless communications ) Yet FCC regulations require providers to invest in wired technology. It’s gotten to the point that many citizens are now choosing to use the wireless line as their primary telephone while saving money to cut the cord on their wired telephone.

Another FCC critic was the Institute for Policy Innovation. In a January letter to the FCC, the think tank chastised the FCC: “it borders on the absurd to require that companies like AT&T maintain two parallel networks, a forward looking one that is desired by consumers and businesses and that facilitates new products and services using the latest technology; but also an expensive legacy network that is necessary only to comply with outdated regulations.”

“It is vital for the FCC, for its own future relevance, to tackle this, tackle it today, and re-asses the basis on which it regulates,” said Cicconi to the crowd gathered by the McDonough School of Business at Georgetown University’s Center for Business and Public Policy.

John Mayo, executive director of the center, echoed Cicconi’s statements. Mayo compared the FCC’s forcing of telecommunications divisions to invest in old technology to requiring of making modern auto makers invest in “buggy whips.”

By pointing out the FCC’s inability to adapt to a wireless world, Cicconi criticized the commission and governing bodies for attempting to re-word old rules and regulations into a new world. He stated that “they have struggled with how to figure out how to preserve rules and transport them into a new environment.” The next step is to “take all these rules and design them for an world,” said Cicconi.

Blair Levin of the Aspen Institute stated similarly that “there is no need to wait” and that the transition to IP is an inevitable reality. Levin said that by waiting on completely embracing a wireless transition, potential jobs could be lost. Jennifer Fritzsche, a managing director for Wells Fargo, cited a recent company survey that expressed the inancial hesitance of bankers to invest in the changing regularly climate. According to this survey, 86 percent of those asked on Wall Street believe that the Obama administration was more regulatory in regard to business than was prior administrations.

Cicconi echoed the need for “new rules” concerning how the private sectors are to invest and operate the space. Cicconi backed up his companies desire to abandon what he called “legacy rules” by noting that “five years ago we [AT&T] were selling minutes, now we are selling bits.”

Ciconni later wondered aloud to the crowd, “how many other companies as large as ours, have fundamentally changed, in only five years, the core product they sell and how they sell it, this is the a pace of change and how we grasp it.” Without embracing that need for change, the majority of the panel concluded, that the FCC could become irrelevant as the world continues to embrace wireless and broadband technologies.