WASHINGTON-FCC Commissioner Michael Powell has entered the forbearance fray with a
strongly worded statement about the burden-of-proof test the Federal Communications Commission uses to determine
whether certain rules should be disregarded because of competition.
“Competition and free markets are not
simply regimes that allow firms to profit at the expense of consumers … History and, more importantly, Congress have
judged that competition is a superior device for maximizing consumer welfare. It generally keeps prices at levels
consumers are willing to pay, it generally promotes innovation in new products and services for consumers and it
generally promotes growth into new and, yes, even traditionally underserved markets. I emphasize generally, for
markets in any given snapshot in time will not be doing all of these things equally well,” Powell
said.
Congress established procedures in the telecom act allowing entities to ask the FCC to “forebear”
from enforcing rules that have become moot because of competition. The procedures require the FCC to rule on such
requests within one year but give the agency the option of a 90-day extension if necessary.
The Personal
Communications Industry Association said it welcomed Powell’s statement. PCIA used the forbearance argument to try
to change today’s mandatory wireless resale requirement. However, the FCC denied that request, and PCIA since has
begun lobbying Congress.
Powell-who generally favors deregulation in favor of competition-wanted his thoughts to
be considered as part of this congressional consideration of the forbearance test, said Peter Tenhula, Powell’s wireless
legal adviser.
Powell disagreed with the majority FCC decision to continue enforcing rate integration in the wireless
industry. Rate integration requires interstate telecommunications companies to provide interstate long-distance services
to their customers in each state, including U.S. territories, at rates no higher than those they charge to their customers in
other states.
FCC Commissioner Harold Furchtgott-Roth approved of the decision to include wireless in the rate-
integration plan, said his legal adviser Kevin Martin. However, Furchtgott-Roth still is concerned the FCC’s
forbearance test is too stringent. “[Furchtgott-Roth] in previous statements has agreed with Powell’s analysis but
in this circumstance does not believe forbearance is warranted,” Martin said.
Powell disputes the argument of
his fellow commissioners-most notably FCC Chairman William Kennard and Commissioner Gloria Tristani-that the
public-interest obligations of the FCC require it to keep regulating markets.
