POWELL CALLS ON CONGRESS FOR POWERFUL FCC ENFORCEMENT POWERS
FCC Chmn. Powell called on Congress to bolster agency’s enforcement powers, measure he said was necessary to protect consumers as agency executed streamlined business plan that’s “aligned with the realities of a dynamic and converging marketplace.” He also told House Telecom Subcommittee at hearing Thurs. that legislative approval was necessary to carry out his bureau restructuring plan, which still was being formulated, and his “policy vision” of making FCC more “efficient, effective and responsive.” Powell said FCC, if given sufficient enforcement capabilities, would guarantee “fairness to all, and allegiance to none,” but warned potential regulatory violators that Commission likewise would levy severe penalties. “If you cheat, I'm going to hurt you, and hurt you hard,” he said.
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Ability to impose heavier fines and having fewer time constraints to carry out enforcement action via changes in statute of limitations are 2 tools Congress could give FCC, Powell said. If FCC can fine a company only $15,000 when companies earn millions or even billions of dollars annually, then companies will view the fines “just as the cost of business,” and have less incentive to comply, he said. ALTS Pres. John Windhausen agreed FCC needed greater enforcement tools: “That’s significant to us, because that’s what we have been saying.” Although Powell didn’t come to table with many specific proposals to reform FCC -- specific subject of the hearing -- Windhausen said “it’s reasonable to give him 6 months to come forward with recommendations… He’s trying to find out what the problems are and is soliciting input from his staff” on how to address those problems, he said.
Commerce Committee Chmn. Tauzin (R-La.) said Powell spent 3 years as commissioner “watching how not to run the FCC” and expressed confidence that under his leadership it “would become an agency that fosters innovation and investment rather than one that inhibits the deployment of new services.” He told Powell he would work with him to “rationalize the structure” of agency so services, rather than service providers, are subject to regulatory or deregulatory framework.
“I am tired of watching the disparate treatment of broadband services, a disparity that has skewed the deployment of broadband services and deprived many of my constituents, especially my most rural residents, of access to high-speed Internet service,” Tauzin said. “I realize that some of the disparity stems from the different ways we treat ILECs, CLECs, cable companies, satellite companies and wireless carriers in the law.”
Ranking committee Democrat Rep. Dingell (Mich.) echoed some of Tauzin’s concerns about “fair treatment of all industry participants” and technologies used to provision services. BellSouth spokesman saw as significant attendance of Tauzin and Dingell at subcommittee hearing, particularly amount of time they spent discussing “parity of regulatory treatment of cable and telephone companies” and concerns over FCC’s length of processing Telecom Act Sec. 271 interLATA relief applications.
Dingell said it was “no coincidence” that AT&T didn’t enter local exchange market in N.Y. and Tex. until approval of Bell company 271 applications. He asked Powell whether he saw connection between provision of AT&T local service and Verizon and SBC entry into interLATA market. Powell said he “doesn’t think it’s particularly surprising” that local competition increased when competitors entered or announced plans to enter new in-region long distance markets.
AT&T spokesman responded: “We have spent the past half- decade working to enter local telephone markets in various ways and in different locations. Unfortunately, the Bell companies have made it largely impossible for new entrants to compete. But we're committed to enter markets where both processes and pricing make it economically feasible to do so.”
Powell reiterated concerns that FCC engineers weren’t sufficiently compensated and often left for private sector, but said increasing compensation alone wouldn’t resolve employee retention problem. He said increased pay could be complemented by agency’s new “Excellence in Engineering” program, which will improve job development programs and increase job rotation. He also said FCC had critical need to improve engineering lab, especially facility in Columbia, Md.
Grant Seiffert, TIA Vp-external affairs and global policy, said manufacturing sector would benefit greatly from improvements in FCC lab’s technical resources since it would help speed to market communications products that often were stockpiled for months awaiting FCC equipment authorization. “When [FCC has] a 650 product backlog and is 6 months behind, it costs manufacturers $1 million per day” in lost revenue, he said, citing findings in McKinsey & Co. report, Cost of Arriving Late to Market.
Subcommittee ranking Democrat Markey (Mass.) urged Powell to be cautious in pushing deregulatory agenda. He said U.S. had best telecom system in world as result of work FCC had “done in the last generation” in implementing laws originated in subcommittee. Markey also asked Powell how FCC would proceed with case in which FCC-imposed cable market ownership cap on AT&T was struck down. Powell said FCC suspended 30% cap on AT&T, but still was assessing whether conditions imposed “are undermined by the court decision.” He said that although it suspended AT&T cap, FCC rejected industry petition seeking to suspend 35% broadcasting national ownership cap.
Powell also said he was “reluctant to impose” universal service obligations on Internet telephony service providers because that sector “is engaged in a wonderful period of implementation.” Rep. Sawyer (D-O.) asked Powell whether it was possible universal service line item fee might be added to consumer bills. Powell said it would depend on whether Internet telephony could be “evaluated and categorized as a telephone service as defined by Congress.”