Thinking Tech

Will the FCC be allowed to walk the talk?

Will the FCC be allowed to walk the talk?

Posting in Government

Opening up more spectrum to more uses and more players, defining regulations based on equipment rather than directly through the network, is a big, big fight that must be won.

New FCC chair Julius Genachowski has given his first interview since taking over the agency and he says all the right things.

Competition. Consumers. Innovation. Investment.

Genachowski seems especially intent on opening up more wireless spectrum to more companies and more competitive technologies. Exx-cellent.

The question is whether he will get a chance to put his plans into action.

As in the debate over reforming health care, Genachowski faces intense industry pressure to rein himself in. In this case most of the pressure is coming from AT&T and Verizon, which now dominate all areas of last-mile communications (except television) and which spend heavily on lobbying, in both Washington and at the state level, to do that.

In addition to their official lobbying, of course, both companies maintain a host of astroturf groups, skunkworks, and co-opted organizations ready to do their bidding. They don't have to lie to get groups to inundate regulators with letters supporting their position. Just put out the word.

There is a long and glorious tradition to that.

The Bell System itself was a private-public hybrid which took enormous lobbying to create. Before 1908, there were hundreds of independent telephone companies. Theodore Vail and his associates convinced the government that limited capital required one gigantic system to assure universal access. They won the argument.

Despite the reported break-up of the Bell System in 1984, that argument is still going on, and the Bells are still winning.

Where once there were 7 Bells, along with a highly-competitive long distance market, several major independents like GTE, and two large equipment companies, now there are two. Verizon owns MCI, AT&T is part of SBC, the independents were swallowed and the equipment arms disappeared.

Telecommunications today is, in fact, more concentrated than it was before the Bell break-up. AT&T and Verizon not only control nearly all land-lines, the last mile, and the Internet core, but most of the wireless spectrum as well, much of which is hoarded so that high prices and monopoly control of services and equipment can be maintained.

This is the reality Genachowski must confront, and the struggle between President Obama and the health insurers is instructive in that regard. What is before the public is a compromise, and as compromises have been made support has gone down.

If the health care lobby can kill reform, why can't the telecom lobby? The answer is they can.

There is a dance these lobbyists do, one I have followed for a quarter-century now. If you want reform you go to the FCC. They say yes or no, and it goes to the courts. The courts say yes or no and it goes to the states. The states usually say no. So you're back at the FCC. Wash, rinse, repeat.

It should also be noted that Genachowski is not a King. He is, in the end, one of five commissioners.

Two are Republicans, and the newest Democrat, Mignon Clyburn (left), is already being accused of being in the pocket of the industry. Push will come to shove, and when Genachowski pushes the monopolists can shove harder, even within his own agency.

What Genachowski most needs to succeed is an intense public focus on the subject, or at least an intense focus from those members of the public who are impacted. Namely the tech industry and tech users.

Opening up more spectrum to more uses and more players, defining regulations based on equipment rather than directly through the network, is a big, big fight that must be won.

What's important to note is it is just beginning.

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Dana Blankenhorn

Contributing Editor

Contributing Editor Dana Blankenhorn has written for the Chicago Tribune, Advertising Age's "NetMarketing" supplement and founded the Interactive Age Daily for CMP Media. He holds degrees from Rice and Northwestern universities. He is based in Atlanta. Follow him on Twitter. Disclosure