Beltway.com/post

At the dawn of the competitive telecom era in the mid-1970s, I was a lobbyist for the nascent competitive telecom equipment sector, the Interconnect Industry.

I lived through much of our industry's early competitive history and histrionics. I got to hear a lot of "sage" people say profound things. In real time, I also got a lifetime's worth of buffoonery. Fortunately, I escaped from D.C., and got out of the Beltway's magnetic force field.

Two statements stand out from that period. They are remarkable because of the depth of their astuteness, the longevity of their insight and (to use today's vernacular) their "connectedness." They were:

1. Popular political satirist Mark Russell's remark: "Washington, D.C., is an 8-square-mile piece of real estate, much of it built on former swamp land abutting the Potomac River, surrounded by reality."

2. A joke passed on to me by a member of the FCC Bar Association: "Question: What do you call seven FCC commissioners (there used to be seven) turned upside down with their heads stuck in the bottom of the Potomac? Answer: A good start!"

First, calling Russell's remarks prescient is an understatement. The only way to explain why the people who passed the Telecommunications Act of 1996 actually thought it would increase competition is that they were out of touch with reality. The only competition it has increased is to see who can overpay the most for strategic assets that were just as-if not more-strategic two or more years ago at fractions of today's valuations.

Next is the segue into the second joke. This is what those in the military call a "target-rich environment." With so much choice, an arbitrary selection is wireless.

After more than 20 years of noodling the challenge created by the invention of cellular radio in the 1950s, the FCC created the 800 MHz duopoly. The licenses that were not owned by the now-divested AT&T via the McCaw acquisition ended up in the hands of the wireline carriers operating outside their wired franchise regions. So much for competition. But this was not good enough.

The FCC held a lottery to let the market decide how to maximize newly allocated PCS bands. Who won? Deep-pocketed incumbent IXCs and LECs. Who lost? Consumers who faced a ludicrous roaming regime, a more absurd air interface dilemma and the unintelligible called-party pays environment.

The spectrum auctions enabled irresponsible bidders to pick a number out of the air. When they couldn't pay up, as everyone but the FCC knew would be the case, the FCC devised a scheme for bailing out these hucksters.

No matter where one looks in FCC history (common carrier, cable, TV, radio, wireless), if the commissioners had gotten in touch with reality by crossing the Potomac or created a new reality by doing a headstand in it, it is hard to imagine how we would be worse off.

So much for history. Where is this diatribe going? Right back to Washington.

As this goes to press, the ComNet show has just concluded. On display was the "Internet Time" view of the future. New public network platforms from a slew of vendors will provide intermediation capabilities between the feature-rich, circuit-switched world and the emerging always-on, data-centric, multiservices-ready, IP, ATM, IP-over-ATM public packet world. These coupled with the advent of voice-over-IP services, over cable as well as telephone plant, will roil service provider pricing this year.

In a world where a bit is a bit-and, for example, reasonable-quality voice communications will be possible to anywhere in the world, including inside LATAs, for a flat monthly fee as low as $10-do separate cable and common carrier regulatory regimes make sense? With wireless companies also competing with VoIP solutions directly for basic minutes of use, how long can the incumbent LECs' cash cow-intraLATA toll and the current access charge regime-stand up? Is it appropriate to handicap incumbents by denying them entrance into growth markets? Is it fair not to give everyone equal access to alternative wiring systems such as cable? What happens to universal service in this next generation service provider space when its funding mechanisms are bypassed?

It is time to pull the FCC commissioners' heads out of the mud and point them on the road to reality, such as anywhere outside the Beltway. Beltway.com? More like Beltway.com(post).