Subject: [NEXTEL-1] Policymakers Need to Rethink the Concept of Telecommunications, Rep. Tauzin Says

From: Marcel <[email-masked]>
Date: Tue, 18 Mar 2003 16:36:05 -0500

Policymakers Need to Rethink the Concept of Telecommunications, Rep. Tauzin Says

In remarks at the CTIA Wireless 2003 trade show in New Orleans, Rep. W. J.
"Billy" Tauzin (R-La.), chairman of the House Commerce Committee, and FCC
Chairman Michael K. Powell agreed that fresh new approaches need to be
taken to policymaking in the telecommunications industry.

With telecommunications taking the form of a pervasive cloud in which the local
switch is obsolete, the regulatory structure becomes an inhibitor to innovation
and growth, said Tom Wheeler, president and CEO of CTIA. Rep. Tauzin
agreed saying that policymakers need to rethink the concept of
telecommunications. FCC Chairman Powell pointed out that radical change is
needed in the regulatory process, with government abandoning the role of rule
maker and becoming a leader and coordinator. In moving forward on
implementing wireless E-911 location technology, Powell said that regulators,
carriers and emergency response officials would meet on April 29 to work out
what it takes to complete the initiative. Both Tauzin and Powell agreed on the
need to seek additional spectrum for third-generation wireless services. During
the opening day of the wireless show, Wheeler and Tim Donahue, president
and CEO of Nextel Communications and chairman of CTIA's board, released
the results of CTIA's Semi-Annual Wireless Industry Survey. "Let’s start with an
industry that had almost 141 million subscribers at the end of 2002," Wheeler
said. "That’s about 10 percent growth since December 2001, at the same time
other telecom segments are losing ground." “During 2002, total wireless
minutes of use increased 36 percent over 2001. And in the last six months of
2002, individual wireless subscribers’ usage grew faster than in the first six
months,” added Donahue. “The growth in wireless data revenue suggests that
we are on track for data revenue in 2003 easily in excess of $1 billion,” Wheeler
said. The survey also found that wireless carriers reported $126.9 billion in total
cumulative capital investment as of December 2002 – up 20.8 percent from
$105 billion, as of December 2001

-----------------------------------------------------------------------------------------------------------------------------

Wireless industry may be at risk

Rules could choke sector, FCC chief says

Tuesday March 18, 2003

By Keith Darcé
Business writer

Efforts by some states to impose new regulatory control on the wireless
phone business will stifle technological innovation in the industry and
inflate wireless service bills, two top Washington phone industry
regulators warned Monday in New Orleans.

Federal Communications Commission Chairman Michael Powell,
speaking to the largest convention of the wireless industry, called for a
"radical change" in the way government officials view their role in the
telecommunications industry.

"We have to approach this
industry with a mind that's not
locked to the old structures or
to the approach that
telephony is something that
has to be regulated or it won't
work," said U.S. Rep. Billy
Tauzin, R-Chackbay. As
chairman of the House
Commerce Committee, which
handles telecommunications
bills, Tauzin has a powerful
voice in Washington's
debates over phone industry
regulation.

Powell and Tauzin spoke
Monday morning to the opening session of the Cellular
Telecommunications & Internet Association's annual convention at the
Ernest N. Morial Convention Center. The convention is one of the largest
visiting the city this year, attracting about 800 exhibitors, nearly 20,000
attendees and filling almost all of the convention center.

The convention is closed to the public, but it's drawing some of the
biggest names in the telecommunications and computer industries to New
Orleans, including Microsoft Corp. Chairman Bill Gates.

Gates' presence at the conference reinforces the growing importance of
data communications in a business that was born in the 1980s as an
alternative to voice communications over land-line phones and two-way
radios.

In fact, each of the past three times the convention has stopped in New
Orleans, it has had a different name, signaling the group's continuing
evolution. In 1999, the group gathered under the Cellular Telephone
Industry Association banner. In 2000, the name was Cellular
Telecommunications Industry Association. This year, "Internet" replaces
the word "Industry." Even with the frequent name changes, the group has
managed to keep its more widely recognized acronym, CTIA.

With other telecommunications segments reeling from the effects of the
recession and the stock market slump, the wireless industry offers one of
the few bright spots in the industry.

About 141 million people were subscribed to wireless phone service at the
end of 2002, or about 10 percent more than a year earlier, according to
results of a biannual market study commissioned by CTIA and released
Monday.

About 5 percent of American households have turned off their copper-wire
telephone service and use their wireless phone exclusively, CTIA
President Tom Wheeler said.

Minutes billed to wireless customers in 2002 totaled 619 billion, up 35
percent from the previous year, and revenue for the industry reached $76.5
billion, up 17 percent over 2001, according to the study.

If the industry is going to maintain that kind of growth, it needs to stay free
of the sometimes heavy regulatory hand of federal and state governments,
Wheeler said.

The role of government in the telecommunications market has been
declining since 1996, when Congress passed the sweeping
Telecommunications Act that began eliminating barriers that had
protected traditional telephone and cable television monopolies for
decades.

But Tauzin said many government regulators are "anxious to get their
hands back on to the industry."

He warned that reregulation, particularly at the state level, would choke
the introduction of new communications technologies. "If the government
had to pre-approve every new innovation, imagine how slow it would be,"
he said.

Increased state regulation of wireless phone networks also could bring
higher taxes for consumers, Tauzin said. "Stepping back into the world of
telephony is a mistake," he said.

If anything, the government should be deregulating phone markets even
more, Powell said.

The FCC should loosen its grip on the nation's broadcast airways by
allowing frequency license holders more freedom to decide what services
they offer over the government-controlled radio waves, the regulatory chief
said.

The agency also should find ways to reallocate underutilized sectors of
the broadcast spectrum to wireless phone services that desperately need
more broadband space to deliver more advanced services such as
high-speed Internet access, Powell said.

"The trouble isn't spectrum scarcity, but that much of the spectrum goes
unused," he said.

http://www.nola.com/business/t-p/index.ssf?/base/money-0/1047970511248073.xml. . . . . . .

----------------------------------------------------------------------------------
March 17, 2003
Tauzin, Powell Talk Regulations, e911 at CTIA
By Thor Olavsrud

NEW ORLEANS -- The dangers of regulation in the wireless
telecommunications industry and the issues surrounding the roll
out of e911 were among the first items on the agenda at the
CTIA Wireless 2003 show in New Orleans Monday, as CTIA
President and CEO Tom Wheeler brought out U.S. Rep. Billy
Tauzin (R-LA), chairman of the House Commerce Committee,
and then FCC Chairman Michael Powell for discussion of the
industry's concerns.

The Cellular Telecommunications & Internet Association (CTIA)
maintains that wireless is a completely different paradigm than
the centrally switched telephone system that the U.S.'s
telecommunications regulations were designed to deal with, and
both Tauzin and Powell agreed that regulatory policy must
emerge from the shadow of Theodore Vale, who as chairman of
AT&T won a monopoly on telephone service from the U.S.
government by suggesting that it could regulate the business.

At the time, when telephone service depended upon central
switch offices, Wheeler said the concept made sense. But
these days, he said, with telecommunications taking the form
of a pervasive cloud in which the local switch is obsolete, the
regulatory structure becomes an inhibitor to innovation and
growth.

"How can a regulatory structure that was designed for a
centralized switch possibly be relevant to a world of individual
hubs?" he asked.

Tauzin agreed, saying that today's technology "requires
policy-makers to rethink the concept of telecommunications."

Increasingly, Tauzin noted, individual states have taken it upon
themselves to regulate -- a movement which he claimed stifles
growth and innovation while also allowing the states to levy
hidden taxes. One example is California, which now requires
that all new services which have the potential to impinge on
the privacy of citizens must be approved by the state before
deployment. But Wheeler noted that all digital services leave a
digital footprint, bringing them under those regulations.

Tauzin said the federal government can preempt state
decisions, and indicated his willingness to bring those powers to
bear, but also noted that such preemption can easily become
defacto regulation.

"I suggest you move aggressively on your own code of
conduct," Tauzin said, pointing to television broadcasters,
which implemented a rating scheme on its own initiative. Tauzin
said that such proactive measures can blunt the momentum of
both federal and state government in regulation.

Powell agreed to the need for change in regulatory policies,
noting that the government needs to take the lessons of the
Internet revolution -- an industry which grew at a tremendous
pace uninhibited by government interference -- to heart.

"The regulatory policies need to take on the same sort of
radical change," he said. "Let innovation be the central focus of
policy." He added that government can do something other
than making rules, it can be a leader and coordinator.

That's what he thinks the e911 initiative -- which seeks to
implement location-based services which will allow emergency
responders to pinpoint the location of a caller on a mobile
phone -- requires from the government. He said the various
parties -- including regulatory bodies, carriers and emergency response officials -- will
meet on April 29th to hash out what it takes to implement the long delayed initiative.

It cannot be acceptable to say 'we won't have 911, or it won't be ready for seven
years,'" he said.

Both also spoke of the need to free spectrum for use in the market. "We're going to try
to get new spectrum for 3G into the marketplace," Tauzin said.

Powell agreed, noting that a recent report by the FCC found that most spectrum goes
unused most of the time, though spectrum allocated for cellular, PCS and Wi-Fi is
extremely efficient.

Powell suggested new technologies will capitalize on that fact to bring efficiencies into
the marketplace that will allow the use of wasted spectrum. He also suggested that a
new spectrum management scheme will be much more flexible about how spectrum is
used, allowing the market to dictate what uses spectrum is put to rather than hard and
fast rules.

http://www.internetnews.com/xSP/article.php/2110551
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