About the KMB Video Journal
42nd Invitational Conference
A Video Report on Telecommunications Policy for the President-Elect
Introduction. For more than a quarter century, the KMB Video Journal has been convening decision-makers and opinion-leaders to discuss national telecommunications and information policies. Hundreds of business, Federal and state government, academic and public service leaders have participated in dozens of invitational conferences. These conferences have addressed issues ranging from local telecommunications service “unbundling,” to “tele-education” and “tele-medicine,” to the latest broadband and mobile radiocommunications offerings. The Newest Conference – Briefly. On November 10 and 11, 2008, KMB hosted its 42d conference, at the Don Cesar conference center in St. Petersburg Beach, Florida. Participating were –
- Robert C. Atkinson. One of the local competition pioneers who worked with Teleport for years, Atkinson is an expert on state and local regulation. He also served as Deputy Chief of the Federal Communications Commission’s (FCC) Common Carrier Bureau (now “Wireline Competition Bureau”). At present, Mr. Atkinson is Director of Policy Research with Columbia University’s Center for Tele-Information (CITI), part of the university’s world-renowned business school.
- Rick Cimerman. The National Cable & Telecommunications Association’s (NCTA) state government affairs vice president, Mr. Cimerman is an authority on state and local regulation of broadband and cable television services. Mr. Cimerman is also an expert on FCC policies and practices. He has represented the cable industry in FCC proceedings regarding Universal Service Fund operations, and intercarrier compensation reforms.
- Robert W. Crandall. Dr. Crandall is a Senior Fellow of the Brookings Institution in Washington, D.C. He is an internationally acclaimed student of regulatory policies. In addition to telecommunications and information services, Crandall is an authority on energy, transportation, and manufacturing. He worked with the Ford Administration in its pioneering deregulatory initiatives.
- Robert DeBroux. Mr. DeBroux is responsible for Federal Affairs at TDS Telecom, a publicly traded company which provides a diversity of communications services in small town and rural America. Mr. DeBroux has been heavily involved in ongoing discussions regarding intercarrier compensation reforms and changes in the Universal Service Fund, as well as proposed and enacted Federal communications legislation.
- Michele C. Farquhar. Ms. Farquhar served as Chief-of-Staff of the Commerce Department’s National Telecommunications & Information Administration (NTIA), then Chief of the FCC’s Wireless Telecommunications Bureau. At present, she is co-director of Hogan & Hartson’s Communications Group. Ms. Farquhar also served as President of the Federal Communications Bar Association (FCBA).
- Harold Furchtgott-Roth. Dr. Furchtgott-Roth served as Chief Economist of the House Energy & Commerce Committee (at the time the 1996 Telecommunications Act was being debated and passed). He also served as an FCC Commissioner. Dr. Furchtgott-Roth is a world-recognized expert on regulatory economics – as well as U.S. telecommunications policymaking.
- Hank Hultquist. Mr. Hultquist is an AT&T vice president responsible to present and defend the company’s policies before the FCC. Like Mr. DeBroux, Hultquist has been extensively involved in the ongoing debate over intercarrier compensation, and the FCC’s related programs aimed at certain USF reforms. Mr. Hultquist is a Washington communications policy veteran, having worked with MCI earlier in his career.
- Larry Landis. Commissioner Landis serves on the Indiana Utility Regulatory Commission. He has also been a leader on the National Regulatory Utility Commissioners’s (NARUC) Telecommunications Committee. Commissioner Landis has worked with the Federal-State Section 706 Joint Conference – which seeks to foster greater availability of broadband services. He has also been extensively involved in intercarrier compensation discussions.
- Frank Louthan. A Senior Vice President for Equity Research at Raymond James & Associates, Louthan is a recognized authority on wireless, broadband, and rural telecommunications. He is an expert at explaining complex financial market concepts in a way easily understood by laymen.
- Ken Robinson. Mr. Robinson served as a senior aide to five NTIA Assistant Secretaries of Commerce, and worked at the Antitrust Division, Executive Office of the President, and FCC as well. He practices communications law in Washington.
Six Segments.
The conference was divided into six segments dealing with:
(1) “Network Neutrality” and related network management concerns;
(2) “Broadband Deployment” – both wireline and wireless, and in urban as well as rural and small town markets;
(3) “Intercarrier Compensation” – the ongoing debate over how best to regulate “terminating access” charges;
(4) “Universal Service” and supporting high-cost as well as other services;
(5) “Digital TV Transition” – the process of converting all analog over-the-air television to digital service, by February 2009; and
- “Network Neutrality.” The conference participants generally agreed that the FCC’s current approach – enforcement of nondiscriminatory policies and principles – is preferable to the various alternatives that have been proposed. There was concern that more regulation here would deter investment, especially in rural and small town markets where the business risks were higher to begin with. Conference participants generally agreed that the best solution to potential discrimination and unfairness was multiple networks – something already found in many markets. The conference participants recognized that President-elect Obama had endorsed the concept of nondiscrimination and “network neutrality,” but they seemed to believe the current FCC approach was sufficient.
- Broadband Deployment. Conference participants noted that 42 of 50 states now have programs aimed at promoting the greater availability of broadband services. The substantial capital investment which cable television has made – without Federal support payments – was noted, as well as the steady growth of wireless broadband. The conferees were concerned about recent FCC statements that the Government needs to ensure broadband capability is available to 100% of the public. It was noted that the cost of serving that final 3% to 5% of the public might be enormous – especially if satellite services are not taken fully into account. There seemed to be agreement that it’s preferable to let states determine how “universal” they think their broadband should be.
The conferees said these reports often do not take fully into account the availability of cable television, satellite, and wireless services. It was also noted that customer demand Discussed were various reports suggesting the United States is lagging other countries. is a major factor and, in many cases, demand for residential high-speed Internet access is insufficient to support 100% coverage.
- Intercarrier Compensation. The conference participants agreed that the current system of intercarrier compensation reflects an industry structure which no longer exists – the notion of long-distance communications as a separate, “premium” service, for instance. The participants agreed that voice-over-Internet-protocol (VOIP) and wireless services were undermining the current regime. Thus, there was a consensus for change – but uncertainty regarding how better to accomplish it. The persistent carrier-of-last-resort obligation was discussed, for example, as well as the substantial cost of providing service in some rural markets. Conferees discussed the possibility that serious reductions in intercarrier compensation might trigger widespread industry consolidation as well as severe financial problems for some small, independent telephone companies.
Participants were uncertain regarding the FCC’s latest plans and proposals, and whether they should be adopted. But there was agreement that this is a core issue which has sat, unresolved, for too long.
- Universal Service. The conference participants agreed that Universal Service Fund (USF) outlays had risen very rapidly in recent years – and, need to be stabilized, reduced, and potentially eliminated altogether. The proliferation of wireless “eligible telecommunications carriers” (ETCs) was discussed, as well as the size of the “Schools & Libraries Program.” While there was concern about the current size of the USF, conference participants also recognized that the 1996 Telecommunications Act provides that rural and small town residents should be afforded services equivalent to those offered in urban areas, and at “reasonable and affordable” prices.
- Digital Television. The conference participants discussed the planned shift to digital over-the-air television in February 2009, and whether current FCC and NTIA efforts and programs are sufficient. The FCC’s recent cutover to digital television in Wilmington, North Carolina, was reviewed. There seemed to be consensus that most of the public is now aware of the shift, but more technical assistance may be needed. It was also noted that in some cases, digital television transmissions do not achieve the same coverage as analog signals. Most participants seemed to believe the planned cutover will proceed.
- FCC Restructuring. The conference participants did not agree on various proposals to change the way the FCC does business – or, the scope of the agency’s operations. But all agreed that current administrative delay is a serious problem. Core issues such as intercarrier compensation have been debated for almost a decade, and sometimes seem no nearer to resolution. There also was agreement that the prevailing system of myriad “ex parte” meetings between Commissioner, their staff, and interested parties, needs to be reformed.
In the video segments which will follow, the conference participants set forth their views in detail. They bring to bear their individual and collective “informed perspective,” and put forward observations and recommendations likely to prove of interest to the incoming Obama Administration.
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