Interesting People mailing list archives
The planned Communications Act Re-write of the New(t) Congress
From: David Farber <farber () central cis upenn edu>
Date: Mon, 16 Jan 1995 06:44:54 -0500
I have paraphrased a message from a source who claims that this has been substantiated by at least two other sources. PLEASE note that I can neither personally confirm or deny this information at this time, so... Some may call this another of the "hysterical ravings" heard out of DC. Who knows but there have been such in the past that came true. I suggest watching events and see if you see any sign of this happening. If you do, come back and carefully re-read this message Dave I paraphase: For what it's worth, my impeccable source in DC just called to tell me how the Communications Act Re-write will appear when a carefully orchestrated scenario runs its course. By Feb 15th, the RBOCs expect their bill (yet to be introduced) to pass both the House & Senate, with accelerated Hearings. All the deals have all been made over the holidays with the critical opposition that stopped last year's bill: the IXCs, cable, etc. It will be a very complex bill, packaged with the right deregulation words (get the government off our backs), universal service, and futuristic "3d Wave" stuff from Toffler and Gilder. The media blitz is being planned for maximum effect. Clinton won't oppose it because if he does it will appear that he is reneging on Information Highway promises. There is no stopping the steamroller now, and there won't be any time for major forces (other potential players in the NII -- the Microsofts, Hughes, etc. -- to do a decent analysis without looking like they are naysayers). The details -- as usual -- are what counts. The bill will turn residential, small town, suburban, and rural _local access_ into a permanent natural monopoly with a single gateway for services TO the home. The BOCs don't think there are any services FROM the home business worth considering, other than voice and low-speed return data for games. The RBOCs, have given up on medium to large customers. They realize that they already lost that market to AT&T and the niche players, MCI & Sprint. But by controlling access to the home, they figure they can control everything else, and have a chance at getting a few large users by packaging the residences for them. This way they might actually gain market share in the IXC business. AT&T knows they can't fight this Congress without looking like the spoiler, so they will take their chances on radio access, manufacturing, and the more lucrative businesses. It looks like the RBOCs will pull this off, because the separate interests are now stronger than the mutual conflicts among the biggest boys in town. Cable knows they are finished if they have to compete with the LEC's cash flow and new, and better, coax networks are constructed; so they might as well settle for what they can get now. The bill will have the right incentives for the major MSOs to lease-back their coax for the LECs to run. Malone already said so. One "Uniwire" into the home discourages future competition, especially with complicated lease-back arrangements. Any competitor will think twice about trying to breach that monopoly. They are simply following the successful strategy that AT&T used to play W.U. off of 3d parties, like RCA, for decades; W.U. used to get sweetheart deals for circuits with the FCC blessing. No one else even bothered to think about competing until MCI discovered microwaves. These lease-back arrangements will look clean to the uninitiated. Uniwire will be reinforced by control of the settop box interfaces. A barrage of economists will be engaged to argue that natural monopoly, under some new name, is best for everyone because it broadens opportunity. If you think crystals are screwy, wait till you hear the new mantras. The BOCs don't know what to do about radio, but don't believe the technology for broadband radio is here anyway, and have come up with a legalistic strategy that empowers the FCC to slow down any competitive forces using alternative carriage. This will take three steps: 1) Federal pre-emption of States' rights in ALL communications fields -- wire, radio, switching, rates, whatever. But State's rights are a Republica mantra. To prevent this looking like more centralized government (which it is): 2) An "ombuds panel" will be set up under the FCC, but with extraordinary powers to bypass the Administrative Procedures Act and expedite the CFRs without 11 months of notice, etc., to settle all disputes between the States and the Federal government on communications matters. This will be presented as State oversight to protect universal, vaguely defined, services and the like. Everyone who thinks they matter are hustling to get on this panel, for then they will be more powerful than the Commissioners themselves. It will look balanced, with even one FCC Commissioner or two on two panel, somebody representing consumers, labor, etc., but since the GOP expects to win the next Presidential election, within 2-3 years it will be totally stacked. Of course, if the Democrats should ever win anything again, and the BOCs get into financial trouble, which is very likely given that the residential business has always been a dog, all the mechanisms for nationalisation of local carriage will be in place. So why should a good Democrat oppose this? Power swings back and forth in Washington. and to make sure none of this unravels too early: 3) the Justice Dept. will be cut out of all antitrust matters related to communications. All this will be called cutting down centralized government!! The message is that too much money has been spend on this deal for anyone to back out now. What can kill it is the State pre-emption clause. The Governors of the five, so-called "seed" states in telecom (FL, NY, CA, IL and CO) are going to want something big in return for blessing pre-emption. They are in terrible financial shape. So expect weird pork barrel monies flowing for totally unrelated things: releasing FEMA funds for disaster relief in Florida, California, and who knows what else. This is a very large country with a very large economy -- it is easier to move money around than the average citizen thinks. A small portion of a large number is still a large number. So much for capping Federal spending. The other wild card is the broadcasters, who last year stuck in a provision to use the so-called HDTV UHF channels for anything but. However, the networks would love to drop foreign ownership provisions and they might relent on data over former video channels -- which they really don't understand anyway -- for a chance to make better deals with foreign entities. The Republicans are counting on cable & telcos to behave themselves and not raise rates until after the next Presidential election. There is nothing to stop the steamroller now but if they can't get the bill signed into law by Feb 15th, the deals are all off, I am told. end of paraphase
Current thread:
- The planned Communications Act Re-write of the New(t) Congress David Farber (Jan 16)
- <Possible follow-ups>
- Re: The planned Communications Act Re-write of the New(t) Congress David Farber (Jan 22)
- Re: The planned Communications Act Re-write of the New(t) Congress David Farber (Jan 23)