article

Premature Victory

Posted: 4/2003

Premature Victory

As
I write this, I am wrapping up a day covering the FCC’s ruling in the Triennial
Review of the unbundling requirements. By the time you are reading this, we may
know a lot more about what exactly was decided by the agency, but from where I
sit right now, it seems to raise more questions than it answers.

What is certain is that no one is
completely happy with the decision as far as I can tell. Whatever horse-trading
went on between the commissioners has turned into a bittersweet pill for
competitors and incumbents alike.

"Occasionally, you can have a
lose-lose proposition," says Verizon Communications Inc. executive Tom
Tauke. "Maybe the FCC has found one."

Indeed. Within hours of the decision
being announced, both sides promised to challenge it, based on limited details
presented at the meeting and in the FCC’s press release.

Litigation
will prolong regulatory uncertainty that has plagued the industry, hamstringing
investment — both by investors in competitive carriers and by Bells in their
networks.

"The incredible degree of
regulatory uncertainty has been a major factor in lengthening the Telecom
Depression and its effect on the overall economy," note analysts from
Network Conceptions LLC, who lay the blame at the feet of the FCC, or more
specifically — its chairman.

The analysts offer an interesting
analogy that bears repeating: "In the banking industry when a shock hits
the system, the Fed injects cash and credit into the markets to make them more
liquid, giving investors the confidence needed to stay the course. In contrast,
the FCC has exacerbated the financial problems of the [telecom] industry by
adding so much uncertainty that almost any telecom investment is to an extent a
crapshoot."

With competitive carriers
"starved to death," it’s no wonder FCC Chairman Powell is convinced
the Bells and cablecos are the only long-term players, they assert.

Even though Powell’s defeat on the
Triennial Review ruling has been trumpeted in news programs across the country,
it remains to be seen if he truly has lost. Promised appeals and accompanying
uncertainty could further jeopardize competitive momentum to the advantage of
the incumbents.

KHALI HENDERSON

khenderson@vpico.com.
Editor in Chief 

Correction

In the Channel Partners Conference
& Expo preshow planner, the logo for Globalcom Inc. was incorrectly linked
to CCC GlobalCom Corporation. The two companies have no affiliation. PHONE+ and
Virgo Publishing Inc. regret the error.

 

Links
Network Conceptions LLC www.netconllc.com

Verizon Communications Inc. www.verizon.com


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