http://www.wired.com/news/news/email/tip/politics/story/21985.html
The Seedy Side of the FCC by {HYPERLINK "mailto:[EMAIL PROTECTED]"}Declan McCullagh
12:15 p.m. 28.Sep.99.PDT
GRAND TETON NATIONAL PARK, Wyoming -- Americans often seem to view the US Federal Communications Commission as something between a benign nuisance and an antediluvian bureaucracy.
But is the FCC really a group of modern-day Don Corleones who run a protection racket complete with threats to kowtow to government demands or else?
That's how one FCC commissioner views his colleagues. "They are engaged in shakedowns, extortions, and things that fall outside the formal regulatory process," {HYPERLINK "http://www.fcc.gov/commishfurchtgott.html"}Harold Furchtgott-Roth said Tuesday at a {HYPERLINK "http://www.hudson.org/"}Hudson Institute {HYPERLINK "http://www.wired.com/news/news/politics/story/21972.html"} in Jackson Hole, Wyoming.
"The commission has been very effective in shaking down companies [and deciding] which communities get served first, which communities get served last, [and] who the assets get spun off to," he said.
Furchtgott-Roth, a Clinton appointee who is the sole economist among the agency's four other lawyers-turned-commissioners, is frequently the lone dissenting voice when the FCC considers new regulations. Under US law, the FCC has broad regulatory authority over telecommunications companies.
He criticized the conditions the FCC required before {HYPERLINK "http://www.wired.com/news/news/business/story/21936.html"} the SBC- Ameritech merger, and pointed at "the conditions which SBC has 'voluntarily' submitted with a gun pointed at its head.
"Somehow, all the conditions have nothing to do with wireless licenses, but a lot of other things."
Furchtgott-Roth also slammed the so-called "Gore tax," or {HYPERLINK "http://www.wired.com/news/news/politics/story/21042.html"}e-rate fee that the FCC devised to wire schools and libraries to the Net. "There we have a situation where the commission has invented a tax to fund programs at schools and libraries across America purportedly to bring broadband. At first blush this seems like a good thing."
But, he said, Department of Education statistics published in January 1998 - - before the e-rate checks began to flow -- showed about 70 percent of schools already had access.
"This is just preposterous. Most schools and libraries were hooked up to the Internet before a nickel of this multibillion dollar tax was imposed on Americans. There's hardly a politician who's willing to stand up and say this is an incredible fraud," Furchtgott-Roth said.
Martin Irvine, a Georgetown University professor who spoke Monday, said his experience suggested otherwise. "I can't believe that so many schools are connected," he said.
Irvine also said that the FCC should not refrain from regulation of the Net and telecommunications businesses, saying that some forms of control over what companies and individuals can do are better than others. "Regulation does not equal regulation does not equal regulation," he said.
Glenn Woroch, a research economist at GTE Laboratories, said he believed that the FCC needed to intervene in the telecom industry -- and the Internet business too. "I also think there's room for agencies like the FCC to help the industry move out of certain conventions. There are a lot of pricing conventions in the industry that are distortionary and do not contain good incentives for investment," Woroch said.
He pointed to Internet peering arrangements as one area where the FCC could intervene with regulations or standards-setting. "There's something that cannot continue. But there's great difficulty in coordinating the industry from that pricing system to one that's based on cost," he said.
Furchtgott-Roth predicted that differences in regulation between the Internet and more tightly controlled media like cable and broadcast will make for some nasty fights. "It's going to be a very slow process and it's going to create a lot of problems," he said.
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