The FCC has a full court: What's next?

With the recent swearing-in of the FCC's chair, Democratic Commissioner Julius Genachowski last month, and the Senate approval of the nominations of Democrat Mignon Clyburn and Republican Meredith Attwell Baker as commissioners last week, the FCC is back to its full strength of five commissioners. (The remaining two are Democrat Michael Copps and Republican Robert McDowell, both holdovers from the Bush administration).

Front and center on the FCC's agenda are initiatives such as national broadband, net neutrality and copyright protection. Universal Service Fund (USF) reform also shows up as a hot topic.

What can we anticipate from this lineup?

First off, carriers and other telco providers should brace themselves for more regulation. Commissioners may differ on the particulars (Genachowski supports net neutrality regulation while Baker opposes it but likes copyright protection, for example). But all five favor stronger governmental constraints around what service providers do.

In other words, all five believe providers should be more heavily regulated than at present. The only quibbles are about whether they should be monitoring traffic for RIAA infringements, delivering fixed-price broadband to underprivileged areas, refraining from differentially routing certain applications, or all of the above.

You may agree or disagree with the increased regulation, but regardless of whether you think they're unduly burdensome or long overdue, they'll have some predictable consequences. To wit:

Enterprises should expect slowdowns in innovation and the rate of cost decreases. As I've noted before, government regulations are generally successful at ensuring scale and consistency of "'baseline"' services. The New York City subway runs more reliably now than in its pre-Depression days as a for-profit entity; the U.S. Postal Service continues to deliver mail where FedEx won't, and utilities continue to reliably deliver power and water.

But the flip side of regulation is a decrease in innovation -- the Internet was entirely unregulated during its early days of wildfire growth and innovation. Conversely, mail service, NYC subway services, and electricity haven't changed much in 50 years. So don't hold your breath waiting for the next round of carrier offerings.

As for costs, they're likely to go up. Providers will need to invest more to ensure compliance with the regulations -- which they'll find a way to pass on to users. Which means …

Enterprises should keep an eye out for unexpected communications "'taxes"' to crop up on their bills. The administration has telegraphed its strong desire to improve services for consumers while increasing regulation (and thus costs) on providers. But someone has to pay for these increased (and increasingly regulated) services. If not consumers, then who? Yep, you got it: businesses. Probably yours.

Last but not least, I'm hoping against hope the current crew will clean up the reeking Universal Services Fund mess. Thanks to lack of oversight and bass-ackwards management, USF is currently a boondoggle for the undeserving, including Mafiosi and "'underprivileged"' billionaires. Here's hoping the new FCC can disinfect that toxic dump, and make sure that our telephony tax dollars go where they're supposed to -- getting services to those who otherwise wouldn't.

Fingers crossed!

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