Martin's FCC: More of the same?

Kevin Martin's very public rift with then Federal Communications Commission Chairman Michael Powell in February 2003 over unbundling policy created a minor Beltway furor. Now that Martin has been named FCC chairman, the FCC's policy will change, right? Well, maybe not.

The cornerstone of the Powell/Martin feud was whether state public utility commissions could have a role in setting unbundling policy. Martin joined with the FCC Democrats Michael Copps and Jonathan Adelstein to push through an order that gave the states such a role, despite Powell's insistence that the order wouldn't survive an appeal. The Martin-brokered deal was seen as favorable to the competitive local exchange carriers (CLEC) and inter-exchange carriers, giving them a chance to lobby in the states for favorable unbundling treatment. But Powell was right; the D.C. Court of Appeals last summer vacated the order in a stinging rebuke. The new order, published late last year, was widely recognized as the death of unbundling.

This incident is important to the question of how Martin's elevation might affect telecom policy, particularly in unbundling. In its ruling last summer, the court said the states can't be given a role that by law is the FCC's. Martin signed off without comment on the order that resulted, perhaps using his silence to end the feud with Powell. He also might have sent his first signal on the policy direction his FCC will take.

Martin seems to have sent a signal with the FCC's recent ruling that the states cannot compel RBOCs to provide DSL to CLEC voice customers. Not only is that another nail in the coffin of unbundling-based competition, but it's also a further erosion of the states' role in the regulation of advanced services. Martin's partners in his February 2003 order, Copps and Adelstein, called the FCC's stance an application of the "heavy hammer of pre-emption" of the states. Martin was silent. What this almost certainly means is the FCC under Martin won't take a different position on unbundling than it had under Powell.

Martin may end up being a more effective advocate of the RBOC position than Powell, less for his beliefs than for his predisposition for coalition building and his greater decisiveness. Powell has been criticized for a more imperial style and for dawdling on key issues; Martin seems likely to be very different.

Then there are Martin's ties to the Bush administration. The administration has been widely criticized for lack of a strong telecom agenda, and some have advocated congressional action to rewrite key elements of the Telecom Act. It may well be that Martin's elevation to FCC chairman signals that the administration would prefer to manage telecom policy through the FCC, rather than through Congress.

The decision to push policy through the FCC has pros and cons. Congress, in its original writing of the Telecom Act in 1996, demonstrated the risk of having technical issues managed by legislation. Lobbying, poor understanding of the issues and simple blundering created a seven-year paralysis of broadband deployment. Using the FCC could prevent a recurrence of that tragedy. But the Telecom Act never explicitly mentions data services, the Internet, content, or other key issues. The FCC isn't a law-passing body; it's more like a court. Without a specific law to apply, the commission must resort to a form of judicial activism. That opens the risk of legal appeals and further confusion.

VoIP will be the litmus test for Martin's FCC. Last August, Martin was the only commissioner not to comment when the FCC issued its notice of proposed rule-making on the application of the Communications Assistance for Law Enforcement Act to VoIP and broadband access. The consolidation in the U.S. carrier market moves VoIP to a priority issue. Can Martin's FCC get the issue right and release a timely order?

Was Martin the heir to Powell all along, and watching his statements for political reasons? We'll likely find out by how the VoIP order goes.

Nolle is president of CIMI Corp., a technology assessment firm in Voorhees, N.J. He can be reached at (856) 753-0004 or tnolle@cimicorp.com.

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