Experts: FCC Needs to Focus on Spectrum and Subsidy Reform

With the issue of network neutrality behind the U.S. Federal Communications Commission -- at least temporarily -- the agency must turn its focus to freeing up wireless spectrum, reforming telecom subsidies and promoting broadband deployment and adoption, several telecom experts said Friday.

The net neutrality debate of the last five years -- ending with the FCC in December approving rules prohibiting broadband providers of selectively blocking Web traffic -- was "exhaustive and exhausting," said Jim Cicconi, senior executive vice president for external and legislative affairs at AT&T. Cicconi and several other speakers at a telecom policy forum urged the FCC to move forward with plans to make more wireless spectrum available for commercial uses and to revamp the FCC's Universal Service Fund (USF).

The net neutrality debate "focused on hypothetical problems, and we have real problems out there," Cicconi added.

FCC Commissioner Meredith Attwell Baker said she fears that efforts to expand net neutrality into mobile broadband and other areas will take more of the FCC's time. "We can't let our debate within the FCC be hijacked by net neutrality for another year," said Baker, a Republican who voted against the net neutrality rules.

But FCC Chairman Julius Genachowski's agenda for the coming year looks "far more encouraging," Baker added.

Revamping the USF, a large chuck of which subsidizes traditional telephone service in rural areas, should be a top priority for the FCC, she said. USF, with an annual budget of near US$8 billion, adds more than 15 percent to U.S. long-distance telephone bills, she noted at the telecom policy forum hosted by the Free State Foundation, an antiregulation think tank.

"We have an obligation to spend the taxpayers' money wisely," she said. "We have to appreciate this fund is not without limits."

The FCC's national broadband plan, released last March, gives the FCC a "really good path forward," Baker said. The plan recommends that the FCC transition the traditional telephone subsidies in USF to broadband deployment subsidies over a decade.

"All Americans, especially those in rural areas, deserve a path to a bright broadband future," Baker said. "We have to make sure no one is left behind."

The FCC, in a meeting Tuesday, is scheduled to debate a proposal for USF reform. Genachowski is scheduled to give a speech Monday on USF reform at the Information Technology and Innovation Foundation.

USF has artificially propped up several telecom carriers for years, said Blair Levin, a communications and society fellow at the Aspen Institute and the former director of the national broadband plan effort at the FCC. "Does anyone in this room think it's a good idea to ever have the government use its power to assess consumers to subsidize a private company and assure that company's permanent profitability?" he said. "That's what we do today."

USF reform and new spectrum are critical issues in the national broadband plan's goal to bring broadband to all U.S. residents, forum participants said. "If we're going to get serious about 100 percent broadband in this country -- if we truly believe that broadband is going to be the economic driver that takes us through the 21st century -- then we have to reform those policies that are currently in the way," Cicconi said.

Baker also called for the FCC to focus on making more spectrum available for mobile broadband, but she cautioned the agency against racing to meet a goal in the national broadband plan of find 500MHz for commercial uses in the next decade.

"If all we do is reallocate the easiest 500MHz to shift towards broadband, we have done future generations a disservice," she said. "Unquestionably, we need more spectrum, but I want us to focus on getting the right spectrum, the right way, and not merely the easiest way."

Despite the calls for the FCC to move on from the net neutrality debate, some speakers at the forum weren't confident that would happen,

Verizon Communications has filed a lawsuit over the net neutrality rules, and the rules provide for a complaint process to the FCC that may continue the debate at the FCC, said Christopher Yoo, a communications and law professor at the University of Pennsylvania.

"What comes after net neutrality is, unfortunately, a little bit more net neutrality," Yoo said.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.

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