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FCC Change of Chairman: Opportunities to Advance Telecoms in America

It is always the case that change brings with it new opportunities, and the change in the FCC chair will be no exception to this rule.

But we have learned since President Obama came to power that we should not have too high an expectation of such a change.

In my discussions with the US Administration, the White House and the FCC I have never come across any major disagreement about my views on the future of telecommunications. These include:

  • the social and economic benefits of high-speed broadband;
  • the ultimate need for nationwide coverage of FttH;
  • the need to treat national broadband infrastructure as a utility for the digital economy;
  • the need for more competition in a market that is dominated by a few incumbents;
  • open networks that enable retail competition.

President Obama’s promise of a 100Mb/s FttH network, the FCC’s National Broadband Plan and its spectrum-sharing plan are all clear indications that the people in the White House and the FCC recognise that there is a need for most, if not all, of these higher-level strategic policies to be developed.

As stated on so many occasions, this policy development needs to be achieved within the unique setting of the US political arena. While it is no use comparing the USA with other countries—there is no one-size-fits-all solution—it is useful however to look at the many different telecoms policies taken up in other parts of the world, and to learn from them.

In my discussions with both the nominated new chair and the current chair of the FCC, they have always shown great interest in these topics, and I have never come across any difference of opinion on the principles. But developing scenarios on how to get there is a different story.

So my first conclusion in relation to the potential leadership by a new FCC chair is that, while I am sure this new person shares many of these high-level principles, he will be hampered by the current political mess in the USA to the same extent as the President himself and the previous chair.

In other words, there is very little the new chair can do in relation to truly strategic issues. All of them will simply be cut off by a plutocratic Congress.

My second conclusion, therefore, is that for American telecommunications policies and regulations to make any progress a better approach will have to be found—one that perhaps could deliver at least some changes in the direction of advancing America’s digital economy, developing more high-speed infrastructure and, above all, bringing more competition and innovation into the duopolistic broadband market.

The way forward will not please those people who have become so frustrated with the lack of progress, and, as I wrote about recently, have seen competition going backward over the last two decades.

The future will consist of working with the new chair and others to find areas where perhaps change can be made and progress can be achieved—perhaps not in the way we would like to see, but through the back door. For example, the new chair has significant expertise, knowledge and personal contacts in relation to the spectrum changes that have been proposed by the FCC. He could well be the best person to make this happen.

If the industry were to provide their support and cooperation, rather than concentrating on the negatives that exist but which cannot easily be turned around—not because the FCC, the chair of the Administration, does not want this, but simply because of the lack of political will at a Congress level—then this could provide a fresh opportunity to advance the above-mentioned principles.

If, for example, the new spectrum policies can be implemented in a positive way, this would assist the chair, the FCC in general, and the broader industry to start working on some of the trickier issues. It is easier to build from a position of strength and success rather than to be in a negative environment.

Believe me, if I could see a bolder approach that could lead to structural changes happening more quickly I would support it wholeheartedly, as I have been doing, with significant success, in Australia. But in reality I do not believe that this will work in America, at least not in the foreseeable future. We will therefore have to find smarter ways to effect these changes.

A bolder approach can only be successful if the American people were to rebel against the current telecoms environment, and if the politicians saw enough votes in that to put their weight behind more significant changes. Until such a time as they get a better political deal from the incumbents they will not take a chance on change.

So the third conclusion is that it is unlikely that the new chair will be able to make any significant changes if we follow the road we have travelled so far under the Obama Administration. So we do need to develop a smarter approach.

Will those Americans who desperately want to see more change to the telecoms industry be willing to consider a different approach—one that might appear to be a backing-down from the tough issues, but which in the longer term might deliver better results than what we have seen so far?

It would be dangerous for the new chair to initiate more visionary changes in the absence of any significant political support. The new chair will be well aware of this and will probably take a cautious approach. This will not mean that he does not agree with the need for more significant changes, but unless those promoting structural change can harness sufficient people-power to generate political support for such changes it would be very dangerous for an FCC chairman to challenge the dominant position of the incumbents, as it is these organisations—and not the reformists—which currently have the support of Congress.

So the reality for the industry and the FCC chair is that the only way forward is to find smarter options than the ones that have been tried so far.

By Paul Budde, Managing Director of Paul Budde Communication

Paul is also a contributor of the Paul Budde Communication blog located here.

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