Verizon Exec Calls for Rewrite of Telecom Act

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The U.S. Congress should rewrite the Telecommunications Act to focus on the Internet and strip away the rulemaking authority of the U.S. Federal Communications Commission, a Verizon executive said Wednesday.

The Telecom Act, passed in 1996, is outdated and "irrelevant" to the modern broadband marketplace, said Tom Tauke, Verizon's executive vice president for public affairs, policy and communications. The FCC's rulemaking process, which can take many months from start to finish, also doesn't move at Internet speed, he said during a speech at the New Democratic Network (NDN), a Washington, D.C., think tank.

"It is important for consumers and for companies to believe they can get a quick answer when an issue arises," Tauke said. "Processes that are going to last a long time probably aren't going to fill the bill."

Rules aimed at specific industries such as broadcast television or telephone carriers are "out of step" with today's converged broadband and video ecosystem, Tauke added. Instead of the traditional rulemaking process, an enforcement agency should have an "ongoing engagement" with technology experts to analyze industry trends, he said.

The enforcement agency could set out broadband principles for the Internet industry, then act on individual problems as they come up, instead of trying to create rules to anticipate problems, Tauke said.

"No one is suggesting that the Internet space should be the wild, wild West," he added. "We ought to have a rule of law for the Internet space. Now our question is, what is that rule? Who has the authority to enforce that rule?"

Instead of the current, wide-ranging rulemaking powers at the FCC, "an agency" designated by Congress should have the authority only to protect Internet consumers and to enforce antitrust rules in the telecom industry, Tauke said. The former Republican congressman said he didn't have an opinion whether the agency enforcing the new telecom rules should be the FCC or another agency.

"The test for government intervention in the marketplace is to either prevent harm to users or anticompetitive activity," Tauke said.

Tauke's speech comes eight days after the FCC released a 376-page national broadband plan that sets up dozens of rulemaking proceedings. Verizon's focus on the issue of Internet regulation has come in reaction to questions about the FCC's authority to enforce network neutrality rules and separate moves by the U.S. Federal Trade Commission to regulate targeted advertising online, Tauke said.

It doesn't make sense for rules to apply to one type of company in the Internet industry but not another, he said. Vendors are banding together to create new product lines, and the lines between traditional telecom carriers and application providers or computer makers are blurring, he said.

"The bottom line is this: Harm to consumers and competition should not be permitted from any source," Tauke said. "The level playing field needs to be big enough to include all the players."

Tauke also called for an end to low-income subsidies under the FCC's Universal Service Fund. Instead of the USF collecting money from telecom carriers and then distributing money to poor people who need help paying for phone service, Congress should give direct vouchers to low-income subscribers, he said.

Wednesday's speech was meant to start a discussion about the future of Internet regulation, Tauke said. "By adopting the approach I've outlined, we can best protect consumers and competition and ensure the flexible, adaptive oversight that fits the innovative nature of the Internet," he added.

Representatives of the FCC and three consumer groups weren't immediately available for comment on the speech.

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