Senate, FCC Avoid Battle

Telecom 'truce' expected to end after FCC rule changes.

The perpetual war in Washington to transform the nations monopolistic telecommunications system into a competitive, market-driven industry has not subsided; but for a moment, the warriors are taking a break.

The Senate Commerce Committee took a new look at the Federal Communications Commissions powers last week. Many in industry anticipated the review would become an arena for competing telecom sectors to push their agendas. However, the committees top priority of reaching a consensus on FCC reauthorization prevailed, and contentious issues were sidestepped.

"A truce in the battle of telecommunications titans ... is holding," said committee chairman John McCain, R-Ariz., upon convening the committee meeting Thursday.

The truce is expected to break once the FCC releases long-awaited rule changes governing the Incumbent Local Exchange Carriers (primarily the Regional Bell Operating Companies) duties to provide access to local network equipment to competing carriers. The FCCs order, known as the "triennial review," will be released this week.

"I would call this a pause," said Robert McDowell, vice president and assistant general counsel at the Competitive Telecommunications Association, in Washington. "Once the order comes out, youll see both sides pick what they dont like and try to pursue some remedial measures."

The Senate panel did agree to add teeth to the FCCs enforcement powers by raising the limit of the agencys fines by a factor of 10. In the telecom arena, the FCC imposes fines on carriers for not honoring pro-competition mandates, among other things. Higher fines should prevent carriers from merely accepting such penalties as the cost of doing business, McCain said.

"That can help, but the question is whether or not the FCC will act," McDowell said. "The FCC has to resolve these complaints quickly and decisively."

The committee also approved a provision that will preclude wireless carriers that acquire spectrum at FCC auctions from using bankruptcy laws to avoid paying for their right to use the spectrum. The provision was incited by the protracted litigation the FCC pursued against NextWave Telecom Inc.