CLECs Face Uphill Climb with Powells FCC

By Caron Carlson  |  Posted 2001-01-29

If youre in the market for a fresh-faced telecommunications service provider, dont expect to see a rash of new entrants knocking at your door during the tenure of newly named FCC Chairman Michael Powell.

If Powell is as deregulatory in action as he has been in word, experts say CLECs (Competitive Local Exchange Carriers) are less likely than ever to receive any additional government help to challenge incumbent carriers.

Powell, who came to the Federal Communications Commission in 1997 from the Department of Justice, is expected to accelerate many deregulatory trends put in place by his predecessors. Under former chairmen William Kennard and Reed Hundt, the commission relied increasingly on marketplace mechanisms to manage communications.

In the wireless industry, for example, the FCC has converted almost entirely to an auction system to assign spectrum licenses, and it increasingly allows the private sector to determine how the spectrum is used.

Extolled for his intelligence, articulation and well-reasoned positions, the son of Secretary of State Colin Powell has advocated a faster-moving agency that responds more adeptly to market conditions.

"Michael Powell is one of the most confident men I have ever met in my entire life," said Brad Ramsey, general counsel for the National Association of Regulatory Utility Commissioners, in Washington. "He just oozes confidence and competence."

While they are reluctant to say so publicly, the smaller companies and startups struggling to elbow their way into markets formerly the purview of monopolies and oligopolies doubt Powell will be much help to them. They maintain that the FCC fails—and will continue to fail—to deliver on the creation of competition promised by the Telecommunications Act of 1996.

Some CLEC advocates, however, see a way for Powells FCC to promote their cause without creating regulation. Russell Frisby, president of the Competitive Telecommunications Association, in Washington, said enforcing rules is more important to competition than creating rules.

"Deregulation has traditionally meant opening up networks," Frisby said. "The law says youve got to open markets. Weve got to have interconnection. A lot of this has to do with enforcement."

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