Terry Says USF Order’s Effect on Wireless Remains Unclear

Rep. Lee Terry, R-Neb., has recurring concerns about whether the FCC’s Universal Service Fund order, approved last month, does enough to spur the growth of wireless (CD Oct 28 p1), the vice chairman of the House Communications Subcommittee said Wednesday at a National Journal conference on the future of technology. Spectrum and regulatory reform largely dominated the discussions.

Terry said the FCC was correct to refocus the USF on broadband. “It made no sense to me why we would lock rural America into 1935 technology while the rest of the world was evolving,” he said. “It just made sense to say use the same dollars and upgrade into a broadband system.” But since the FCC has yet to release its order, it remains unclear how the order will affect wireless versus wireline growth, Terry said. “You need both, especially in rural America,” he said. “They have to work together” and the rules should be “technologically neutral,” he said. “I'm hoping that the FCC order that comes out, when it’s published, will recognize those basic principles."

Former Rep. Rick Boucher, D-Va., now with Sidley Austin, called incentive auctions a “no-brainer” and said Congress should pass the needed legislation so the FCC can get started. “It’s an opportunity for billions of dollars to flow into the federal Treasury for spectrum that is urgently needed to be put into the hands of wireless carriers,” he said. “Spectrum demand and data usage is soaring by orders of magnitude.”

The time has come for Congress to approve major telecom reform, Boucher said. “The last reform was 1996,” he said. “It was about analog technology and basic telephone services. Today, we've seen a dramatic transition to digital technology and to the IP platform,” he said. “We also now see companies that have historically offered different products offering exactly the same products, the combination of voice, video and data and competing with each other."

Terry agreed, but said approving a major reform bill won’t be easy. “We're too tied to the history and not forward looking,” he said. “What you'll have is several of our colleagues feel very strongly that maybe voice needs to have its particular niche in regulatory schemes. … Turf is going to be the major hurdle to real regulatory reform moving forward."

Former NTIA Administrator Larry Irving said more focus needs to be directed to getting spectrum online for wireless broadband. “There are things we can and should be doing. We need creative solutions,” he said. “You have to have an adult conversation.” Some economists believe a million jobs could be created if more spectrum is made available for broadband, he said. At a time of 9.1 percent unemployment, “that’s not chickenfeed,” he said. “Where’s the urgency?” Silicon Valley keeps turning out new devices that depend on spectrum, he said. “Somebody in the administration has to have a comprehension as to what the rules of the road are so that investors can invest, so that builders can build."

Irving, a Democrat, said President Barack Obama is not doing an effective job of using “the bully pulpit” of the White House to underscore the importance of technology to the future of the country. “This administration used technology incredibly well to get elected,” he said. “It’s still using technology incredibly well to inform America what it’s doing. What it’s not doing well is telling the story very well about what technology is doing, the jobs it is creating … why America is still at the forefront of the global economy because of the things that are happening.”

David Gross, the State Department’s former coordinator for international communications and information policy, said U.S. policymakers must view decisions they make as having global implications. “We no longer live in a world where it’s easy for us to make our own decisions about our own market in our own way,” said Gross, now at Wiley Rein. “They all have an international dimension.”

What happens internationally also “has a direct impact on our economy,” Gross said. “Whether or not markets are sufficiently open is something we have long looked at but becomes increasingly important as we have an electronic commerce.” Gross said spectrum is a key issue. “Yes we are a large market. Yes we can make decisions for ourselves,” he said. “But it is in a global context and if we need more spectrum, we want to have low-cost devices, we need to think globally.”

Antoinette Bush of Skadden Arps said policymakers need to get past debates about issues no longer relevant such as newspaper/broadcast cross-ownership rules at a time when many no longer read daily papers. “How do we get rid of the debates about media ownership or rules that are increasingly outdated or irrelevant,” she asked. “There’s a tendency to just start ignoring them, just do nothing about them. How do we create an environment where policymakers are empowered, entitled to say, ‘These things are irrelevant. We're going to move on. We're going to revise the Telecom Act to get rid of these silos because everything is converging.'”

The former Senate staffer said it will take years to get broadcast spectrum in play for broadband, even if Congress gives the FCC the authority for incentive auctions. “There is a lot of spectrum out there beyond the broadcast spectrum that the government needs to look at,” Bush said. “They need to take a hard look at what are the government needs. What does [the Defense Department] need. … We also need to take a hard look at other industries that have a lot of spectrum that is not being used, including wireless phone companies, satellite companies.”

Bruce Mehlman of Mehlman Vogel, an assistant secretary of Commerce during the George W. Bush administration, said the U.S.’s technology policy needs a major overhaul. “We're not doing OK,” he said. “The government does have a role. If you take a look where we stand right now, we've got a tax system that discourages investment in manufacturing in the United States. We've got an immigration system that educates the best and brightest from around the world and then kicks them out.”