Telecom Regulation Evolves. (Dateline Washington)

By Condon, Erin C. | Consumers' Research Magazine, March 2002 | Go to article overview

Telecom Regulation Evolves. (Dateline Washington)

Condon, Erin C., Consumers' Research Magazine

Hoping to provide telephone companies with an incentive to build advanced telecommunications networks--and expand the availability of digital subscriber lines--the Federal Communications Commission has passed rules placing these high-speed Internet connections beyond the jurisdiction of federal regulations currently governing the telephone industry. Currently, as mandated by the Telecommunications Act of 1996, incumbent local exchange carriers must give competitors access to their phone lines. But the rules proposed by the FCC would eliminate this requirement with regard to high-speed services; telephone companies would not be obliged to share the fiber-optic lines that they paid to upgrade with other broadband providers. Cable broadband providers operate under a system identical to that being promoted for digital subscriber lines.

According FCC Chairman Michael Powell, mandating competition within each mode of high-speed Internet access would discourage investment in and accessibility to this technology; only 10% of the nation's households employ it at present. Powell, reports the Washington Post, believes that the key to broadband's growth lies in the promotion of competition between the different types of broadband services--DSL, cable, and satellite--available to subscribers.

Powell's agenda for the telecommunications industry has been bolstered by a recent decision of the U.S. Court of Appeals for the District of Columbia Circuit to loosen media ownership regulations. Major media conglomerates--including News Corp., NBC, and Viacom Inc.--were engaged in a lengthy lawsuit that aimed to get ownership restrictions removed from the rules governing the broadcast industry. Parties to the suit argued that dual-ownership limitations and 35%-ownership caps were outdated laws that infringed their First Amendment rights.

In addition to striking down restrictions that impede companies from owning both cable systems and broadcast stations in the same market, the federal appeals court instructed the FCC to reconsider the 60-year-old cap on the size of the national market that can be controlled by a single television station owner. Powell now has more leverage to promote the relaxation or elimination of the 35% cap--a regulation that he has fought for the last two years--arguing that the rules established in an era when just three broadcast networks existed are no longer compatible with "the competitive landscape today."

If the court ruling stands and the FCC decides to weaken the ownership restriction, the television industry is likely to undergo major consolidation, reports the Wall Street Journal. Mergers of cable companies and broadcast networks--like that being considered by AOL Time Warner and NBC--and purchases of profitable, local affiliates by network owners could become realities. (See "How Telephone Wars Affect Consumers," CR, August 2001.)

In another area of technological development, the FCC has authorized the telecommunications industry to move forward with the development of ultra-wideband (UWB) technology at a radio-frequency noise level that is 2,000 times less than that of a personal computer. If the UWB devices do not interfere with cellular and security systems with which they share frequencies, higher power levels could be approved within the next six to 12 months, reports the Federal Communications Commission.

The issuance of the new ultra-wideband standard is expected to generate new products and public safety benefits. This wireless, radar-like technology will make it possible to watch cable television in the absence of physical cable wires, and to identify objects or persons hiding in buildings, in the wilderness or underground. The FCC has restricted the use of the imaging, vehicular radar, communications, and measurement systems of UWB devices to law enforcement, fire and rescue organizations, scientific research institutions, commercial mining and construction companies, public utilities, and licensed health care practitioners. …

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