Read into the FCC’s tiebreaker

If new FCC commissioner and former telecom lobbyist Robert McDowell views his primary clients as the telcos, Vonage had better watch out. If he views his clients as telecom consumers – whether individuals or enterprises – we could be in for a really interesting ride.

If President Bush has his way, the FCC will soon be dealing off a full deck. Bush recently nominated telecom lobbyist Robert McDowell as the fifth member of the FCC, which has had an opening for most of 2005.

McDowell will do more than fill an empty seat, though. He’ll serve as a tiebreaker on a number of critical regulatory issues likely to come before the FCC (and Congress) in upcoming months, ranging from “net neutrality” to E-911, Internet wiretapping and backbone interconnect agreements.

McDowell’s appointment converts the FCC from an evenly split foursome (two Republicans, two Democrats) to a three-man Republican majority. Regardless of whether McDowell votes along party lines, he’ll enable the FCC to make majority decisions. That makes McDowell’s appointment disproportionately important.

But what kind of a commissioner will he be?

In a nutshell, it all depends on who he envisions as his clients. A quick glance at his bio shows that he’s an effective negotiator who excels at “bringing home the bacon” for the folks who pay him.

He’s serving as senior vice president and general counsel of Comptel, a telecom lobbying group. Previously, he served as general counsel of the America’s Carriers Telecommunications Association, a lobbying group that merged with Comptel in 1999. In between those stints, he worked alongside FCC Chairman Kevin Martin on the 2000 Bush/Cheney campaign.

McDowell’s clearly a great lobbyist. He succeeded in modifying the FCC’s stance on “truth in billing,” arguing that forcing local exchange providers to detail the specifics of phone charges would actually harm consumers. The FCC listened and ultimately ruled that “truth in billing” compliance would be primarily voluntary rather than mandatory. The net effect was to avert potentially onerous regulation that would have adversely affected McDowell’s clients, the competitive local exchange carriers (CLEC).

McDowell has also lobbied hard in favor of regulations that make life easier for CLECs and interexchange carriers (IXC) at the expense of incumbent local exchange carriers (ILEC). In 1998, he told the FCC not to rely on market forces to enable local access, and pushed for more stringent limitations on access charges imposed by the ILECs on their competitors. (ILECs argued that regulating access charges effectively forced them to provide local access at below-costs prices.)

And in 1997, McDowell argued that ISPs should incur the same infrastructure support obligations – including paying access charges and Universal Services funds – as the existing IXCs. In his statement at the time, McDowell argued that the commission had no choice but to treat Internet phone providers in the same manner as it does traditional phone companies.

The upshot? As noted, it depends on who McDowell sees himself as serving. If he views his primary clients as the telcos, Vonage had better watch out. If he views his clients as telecom consumers – whether individuals or enterprises – we could be in for a really interesting ride.