Genachowski Announces ‘Technology Transitions’ Task Force

A new FCC task force will provide recommendations on ways to modernize and coordinate the commission’s policies on Internet Protocol interconnection, the resiliency of modern communications networks, business broadband competition and consumer protection on voice services, officials said. Recommendations for the proper focus of the Technology Transitions Policy Task Force were divided. Large telcos and anti-regulation think tanks encouraged deregulation; CLECs, special access purchasers and smaller providers encouraged adoption of IP interconnection policies. All told us their recommended policies would maximize consumer welfare, competition and innovation.

"Technology changes can drive changes in markets and competition,” FCC Chairman Julius Genachowski said in a written statement (http://xrl.us/bn5qih). “And many of the Commission’s existing rules draw technology-based distinctions. So the ongoing changes in our nation’s communications networks require a hard look at many rules that were written for a different technological and market landscape.” FCC General Counsel Sean Lev will be interim director, with Associate Wireline Bureau Chief Rebekah Goodheart as deputy director. The task force will also consider recommendations from the Technological Advisory Committee on the Public Switched Telephone Network Transition and the NARUC Presidential Task Force on Federalism and Telecom.

Commissioner Ajit Pai, who sought an IP transition task force in July, commended Genachowski “for doing just that,” he said (http://xrl.us/bn5qiy). “If we get this right -- if we can establish a modern, deregulatory framework for the dynamic, competitive IP world -- innovation will flourish, infrastructure investment will increase, and American consumers will benefit even more fully from the bounty of the digital age,” Pai said. The task force will include the commission’s chief economist, chief technology officer and representatives from every bureau. House Communications Subcommittee Chairman Greg Walden, R-Ore., said he hopes the task force will present “the type of forum Commissioner Pai has called for since joining the agency -- one that not only helps transition toward the networks of tomorrow, but also away from the outdated regulations of the past."

Creating the task force was a “smart, savvy move” by Genachowski, said Medley Global Advisors analyst Jeffrey Silva. Silva said Pai has been advocating an IP transition task force “for months now,” and by establishing the panel now, Genachowski or his Democratic successor can “shape the policy narrative and thereby not appear resistant to addressing the issue head-on.” Silva said it’s “interesting” that the chairman didn’t use the same nomenclature as Pai used when he called for an “IP Transition Task Force” (CD Oct 17 p3). The new name could reflect that Genachowski and the other FCC Democrats aren’t as “aggressively deregulatory” as Pai and companies like AT&T that have been calling for a similar task force, Silva said.

AT&T Vice President Bob Quinn called the task force “welcome news,” as more than 70 percent of consumers have already migrated away from POTS service. “Addressing these issues in a comprehensive process that crosses the smoke-stacked bureau structure that is a remnant of an almost eight decades old telecom law is critically important,” he said. Verizon Senior Vice President-Federal Regulatory Affairs Kathleen Grillo said the transition is “well under way and inevitable,” and urged the task force to focus on ensuring that “outdated regulation from the legacy era is not used to hinder ongoing investment and innovation in these new networks.” The task force should “reach beyond agency personnel” to obtain as much input as possible directly from companies and individuals that are building infrastructure and bringing innovative services to market, said Genny Morelli, president of the Independent Telephone and Telecommunications Association. Because the task force’s scope as defined by Genachowski is “extremely broad,” it might be “challenging” for the task force to “comprehensively assess and address each of the important issue areas identified by the chairman,” she told us.

Senior Vice President-Policy Michael Romano said NTCA seeks a “vigorous dialogue aimed at ensuring that consumers in all areas of the country have sustainable access —- both in the near-term and for many years to come —- to affordable and reasonably comparable services on broadband-capable networks.” The core statutory objectives of protecting consumers, promoting competition and ensuring universal service are “far too important to risk gambling on untested theories, grand experiments, or seemingly bold but ultimately unsupported predictions or projections,” he told us. No reforms to regulatory frameworks can satisfy all stakeholders in all respects, but as long as the changes are done through a transparent process “that takes true and honest account of their potential consequences” -- and providers get a “meaningful chance” to adjust to changes without flash-cuts or retroactive application” -- the task force can achieve success, he said.

"We are happy to see that the FCC is not approaching the change from copper to wireless with ideas of radical deregulation,” said Public Knowledge Senior Vice President Harold Feld. “Handled properly, this should produce a new social contract between carriers and the American people that includes basic protections for consumers while promoting competition and investment.” Public-interest communications lawyer Andrew Schwartzman said his “greatest concern” was such projects tend to be dominated by the largest stakeholders, “who have the most money at risk.” The task force should ensure “that those most dependent on the PSTN receive adequate service during and after any transition,” he said. That could be “complicated,” given the FCC’s “limited jurisdiction” over information services, he said. Schwartzman wants the task force to “do more than hold meetings in [FCC headquarters in] Southwest D.C. and collect written comments written by lawyers and engineers,” he said. “It needs to undertake extensive outreach, which means talking to the people who are actually affected by any transition, and the organizations which represent them."

The task force “actually could be useful” with the right direction from Genachowski, but “harmful” without proper direction, said Free State Foundation President Randolph May. “The most important ’task’ of the task force should be recommending legacy rules that need to be eliminated or relaxed, and opposing new regulations on broadband,” he said. “If the task force ends up failing to achieve this deregulatory thrust, it will have failed."

"It is time for the regulatory framework to catch up to the realities of the marketplace,” said Anna-Maria Kovacs, visiting senior policy scholar at Georgetown University’s Center for Business and Public Policy. “It is especially important for scarce capital to be directed to IP over broadband, rather than to the obsolete technologies of the PSTN.” NARUC President Philip Jones of Washington is “heartened that the agency is examining the same issues we are,” he said. NARUC Telecom Committee Chairman John Burke of Vermont called the task force an “important development” that could help ensure that the commission meets its “obligation to serve all Americans,” even those who live in rural, hard-to-reach areas.

The transition should be “accompanied by interconnection policies” to let users “seamlessly communicate, regardless of their service provider,” said Broadband Coalition spokesman and former U.S. Rep. Chip Pickering. New technologies “should not mean allowing companies with market power over last mile facilities” to “abuse that power at the expense of American businesses and competitive innovations,” he said. Willkie Farr telecom lawyer Thomas Jones, who represents CLECs, said the task force and commission should focus their resources on updating policies governing access to ILEC last mile facilities and interconnection. Updating competition policies “will have the greatest long-term significance for the U.S. economy,” he told us: The issues to be dealt with are “well-established” within the research and scientific community. “What holds things up are politics and powerful telcos,” said New America Foundation Vice President Sascha Meinrath. “My first recommendation to the FCC would be to kick out the lawyers and lobbyists -- let the engineers and technologists drive the task force."

"The Task Force’s primary mandate should be to articulate a minimalist federal approach to the many issues implicated by the transition from the PSTN to all-IP networks,” said Michael Santorelli, director of the Advanced Communications Law & Policy Institute at New York Law School. “The Task Force and similar undertakings should not be seen as providing regulators with a blank check. ... Significant regulatory restraint must be exercised.” Duke economics Prof. Leslie Marx, FCC chief economist under Chairman Kevin Martin, said the conversation will need to focus on the what the role of regulators should be in an all-IP world, and what’s changed in the market that would force the agency to reconsider its 2003 decision not to regulate IP-based services.