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November 4, 2005

FCC Commissioner Copps laments telecom mergers

Even as the internet opens up the possibilities for greater communications access, telecommunications companies are trying to lock down innovations like skype. Even the FCC chief is concerned about the implications of telecom mergers.

The must-read of the day is FCC Commissioner Michael Copps’ statement concurring in the decision to allow the SBC-AT&T and Verizon-MCI mergers. Copps believes that more conditions should have been placed on the merged entities. He also blames his own agency for the lack of competition in the market for telecommunications services. What’s interesting about his opinion is that he says it’s not his fault: This state of affairs is not of my making or choosing. The record shows that I objected vociferously to many of these changes.

And he sounds the warning bell:

Going forward, our priority must be on vigilance, expert monitoring, and enforcement as needed. This new era of telecommunication is rife with all sorts of exciting opportunities for both consumers and entrepreneurs. But there are also new perils. No less a source than The Wall Street Journal _pointed out less than two weeks ago that large carriers “are starting to make it harder for consumers to use the Internet for phone calls or swapping video files.” The more powerful and concentrated our facilities providers grow, the more they have the ability, and perhaps even the incentive, to close off Internet lanes and block IP byways. I’m not saying this is part of their business plans today; I am saying we create the power to inflict such harms only at great risk to consumers, innovation and our nation’s competitive posture. Because, in practice, such stratagems can mean filtering technologies that restrict use of Internet-calling services or that make it difficult to watch videos or listen to music over the web. The conditions we adopt today speak directly to this issue—before increased concentration of last mile facilities and the Internet backbone make it intractable. This is why stand-alone DSL, enforceable net neutrality principles, and peering in the Internet backbone are so vital.

Commissioner Copps is not the only one worried about the absence of true competition. For the past two years I have seen so many cities and counties setting up their own broadband networks to get around the monopoly/duopoly by building a third, alternative network that would relay traffic not favored by the incumbents.

Recently I posted stories about telcos trying to prevent their customers from using applications such as Skype:

The issue at stake is freedom of choice. Are you free to attach any device to your network (pink phone or orange phone) or use any application such as Skype, iChat or Gizmo Project? Maybe people have short memories but there was once a time when the local phone company did not allow you to buy just any phone and plug it into the wall jack. It had to be their “approved phone”. Same with answering machines.

Freedom of choice applies to the freedom of communities to choose what kind of network they’d like to have. If they want to spend tax money to build a community-owned fiber network, they should be able to do that. If they want a private party to build that network but keep it open to other providers, they should also be able to do so. The failure of the FCC to enforce policies that open up the incumbents’ networks, as pointed out by Commissioner Copps, is to blame for the predicament that the US finds itself in today:

On too many fronts, the Commission put the spear to the pro-competitive policies of the Telecommunications Act of 1996. It put intra-modal competition for the residential market pretty much beyond reach for new entrant carriers and then proceeded to inhibit enterprise competition, too. We turned our eyes away when enforcement was needed to keep bottleneck facilities open.

Read the full statement here.