CRY BABY BELLS

The Bells' swift refusal to commit to greater infrastructure investment following the FCC's UNE review came like a one-two punch for an already groggy industry. Despite the mixed bag of policy and the dot-dot-dot question mark of a handoff to the states, the few aspects of the review that were unequivocal — the rules surrounding fiber and packet-switched technology — seemed to embody the Bells' oft-repeated credo: “Old wires, old rules; new wires, new rules.”

So when the Bells still denied having sufficient incentive to accelerate broadband buildout, many observers were shocked. They shouldn't have been. In the sports world, this is known as “working the refs.” Athletes throw up their hands in outrage and cry persecution whenever a referee penalizes them, regardless of whether they really think they were treated unfairly. By playing the victim, they hope to influence the ref, even if subconsciously, to go easier on them the next time around. These sour-grapes threats shouldn't be interpreted as the true competitive strategy of the Bells, which will more likely be guided by market pressure and profit motives.

Working the ref can backfire if overused, of course. When the chairman of the FCC calls you a “crybaby” (as Powell did the indignant Bells after they decried the UNE review), you've lost the very sympathy you sought. Even Rep. John Dingell, a friend of the Bells to the tune of more than $100,000 in campaign contributions last year, took a stern tone as he admonished them to fulfill their spending promises during last month's House hearing. It appeared the Bells were pressing their luck.

Now the arduous task of regulating unbundled networks falls to state governments, a theater that may have seen its first performance in Indianapolis last month when more than 1000 SBC employees packed the Statehouse to support a pro-SBC bill. The bill, which has already passed the state's House, would override the PUC to prevent wholesale rates from dropping in the former Ameritech state. In a still-fragile economy, the Bells could be very successful framing this fight in the context of jobs. Their opponents — offering polemics about competition and phone rates to a room full of workers fearing layoffs — could run the risk of losing sympathy themselves.

This state-by-state fight was Powell's nightmare come true. But like that of the Bells, his is an odd protest, too. The ref hung his head delivering the UNE compromise, essentially admitting failure. His staff's apologies for not devoting more time to the issue and “cramming” the night before was embarrassing. Given the divisive, self-defeating political fabric the FCC displayed that day, why does Powell still think his commission could do a better job than state PUCs?