FCC Chairman Powell Addresses Forrester Forum

May 21, 2001. FCC Chairman Michael Powell spoke and answered questions at a Forrester Research Telecom Forum in Washington DC. He addressed the status of local competition, the success of the Telecom Act of 1996, Alcatel's possible acquisition of Lucent, legislation pending in Congress regarding broadband deployment, enforcement of telecom laws, and other issues.

Michael Powell

Local Competition. Powell stated that the notion that 100 year old telecom monopolies "were going to be eviscerated on a five year or six year time horizon" was "a fantastically naive expectation". He added that local competition and consumer choice is coming from "new and advanced and newly differentiated services". He elaborated that e-mail, instant messaging and cellular communications all compete with the copper based phone networks.

Alcatel and Lucent. Powell was asked for his view of Alcatel's possible acquisition of Lucent. He declined to comment, for two reasons. First, he stated that "I don't think it is my place to interject into the marketplace without the record to make a serious evaluation of." Second, he stated, "I am not so sure this merger will even be subject to Commission review, because we don't review mergers unless there is a transfer of licenses that are issued by us. And if there are not, even mergers that seemingly are communication related, do not necessarily have an FCC review. They will have an antitrust review."

Tauzin Dingell Bill. Powell was asked for his view on HR 1542, sponsored by Rep. Billy Tauzin (R-LA) and Rep. John Dingell (D-MI), and other legislation pertaining to broadband deployment and open access. Powell declined to endorse any particular bill. However, he stated that there are two competing visions of competition underlying the various legislative proposals. "One view is this -- that real competition and choice are going to come to consumers solely by virtue of major technology differentiated offerings, so that there will be a wireline alternative on the public switched telephone network. There will be a cable modem alternative on the cable infrastructure". He added that there may be other "pipes", including wireless and satellite. He also stated that under this vision "choice and differentiation may be among monopolies or oligopolies." This is the view which underlies the Tauzin Dingell approach. The other approach, said Powell, believes that competition within each pipe is important: "It puts the heat on the incumbent. And if you believe in that, strongly, then you are a much bigger proponent of open access and open systems". Powell did not say which vision of competition he held.