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john_gallant
IDG Enterprise Consulting Director

My final words on the FCC

Opinion
Dec 04, 20034 mins
Data CenterGovernment

If you want to know what God thinks of money, just look at the people he gave it to.Dorothy Parker Dear Vorticians,www.forbes.com/2002/09/13/400fictional_5.html.) But the sun is shining, the family’s healthy, the Red Sox have landed ace pitcher Curt Schilling and the Patriots have won eight straight and now boast a 10-2 record. What could be better?jgallant@vortex.net

I’m not rich, at least not in the sense of Scrooge McDuck, whom Forbes Magazine estimates is worth some $8.2 billion (see

Perhaps, for some, it would be me finally wrapping up our long discussion on whether to sunset the FCC and let the free market – in all its cruelty and beauty – shape the fate of the telecom industry. Few topics in the history of Vortex Digest have generated such a volume of impassioned, detailed mail. And few have found me so alone in my views. That’s the mark of true genius, right? (Hey, you can’t blame me for rationalizing.)

To summarize, here’s where my fellow Vorticians found my logic lacking and here are my final words. (That’s the beauty of writing the newsletter: You always get the last word.)

1. We need the FCC to handle non-telecom related functions like oversight of the broadcast industry.

Some folks would argue about that, though I’ll concede that there are non-telecom functions the FCC has to handle. But whittle down its role.

2. This is really two related points. First, it’s not the FCC’s fault. It’s the lack of a clear telecom policy from the Administration or Congress. Second, a clear telecom policy is no good without an agency like the FCC to enforce it.

No argument there. A clear national policy – ‘We’ll land a man on the moon in 10 years!’ – is wonderful and you need some body to enforce such a policy. But it’s apparent we aren’t going to have any clear national telecom policy any time soon. Blame the White House, blame congress. But also blame the current, politically divided agency.

So, in the absence of policy, we have the worst of both worlds. No clear direction, but a huge regulatory machinery that distorts the free market. If we can’t have clear policy, let’s allow the free market to work. Also, even if we had clear policy, every FCC ruling would be – is – challenged in court and takes years to sort out. Do we want to keep going down this same road, confusing investors and disrupting the natural flow of capital, for years and years to come?

3. We need the FCC because we still have telco monopolies and someone has to make them play fair.

Yes, the RBOCs still dominate the copper wire business. But why is our regulatory machinery so focused on yesterday’s network? Competition is emerging on many fronts, from cable and wireless to voice over IP. When you list all the negative market trends these incumbents face, you have to wonder how good it is to be a so-called monopolist these days.

Let’s be frank, the current regulatory approach provides some limited protection for competitors who want to use the wired network, but it doesn’t do much to maximize competition across network types. Worse, it treats even big, strong competitors differently. My cable company, Comcast, does as it pleases while Verizon operates under Byzantine rules. Verizon cuts my rates, while Comcast acts like a monopolist. Can you tell I just got notified of another Comcast price increase? What am I being protected from?

4. John, this would be shock treatment. It’s too radical.

That’s my point. We’re stuck in the middle. If we want to jump start telecom and gain the economic and social benefits of broadband, we need change. The free market would do better at promoting competition across industries. It’s time to let it work.

Okay, I’m done. I apologize that I wasn’t able to run all the notes I received. Thanks to everyone who put so much thought into this and argued so passionately. Please continue to share your ideas with me at

Bye for now.