Level 3’s Crowe Calls For Policy Rewrite
Level 3 CEO James Crowe called on regulators to rewrite policies and regulatory frameworks in response to “fundamental” changes in the information technology industry. Speaking Wed. at a CEO luncheon sponsored by Progress & Freedom Foundation in Washington, he said: “Even the words we use -- ‘Telecom Act’ -- are incorrect… It’s time to rewrite the Communications Act. Telephone services is only a part of much broader networking capabilities.”
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Crowe urged the FCC to rule that VoIP was subject to federal jurisdiction. But he said it was critical that the Commission clarifies “what the details are. The FCC needs to do more than simply say [VoIP is] interstate.” For example, he said the agency should exempt VoIP from access charges. “Applying access charges to VoIP is a terrible idea,” he said: “If policy-makers want to preserve revenue for incumbents, they should do it in a different way… Applying access charges absolutely destroys benefits of VoIP.” Another clarification Crowe would like to see from the Commission concerns availability of numbering resources to VoIP providers.
Policy-makers will have “a critical effect on the pace with which our country realizes” the potential of the digital revolution, Crowe said. He said the govt. should use regulation “sparingly.” “Regulation is to fast-moving technology industries as garlic is to cooking,” he said. He said govt. shouldn’t interfere “unnecessarily with the operation of free markets or the introduction of innovative technology. The primary goal should be as little regulation and as much free market as reasonably possible.” He said the FCC’s “reluctance” to apply traditional telecom regulations to VoIP was “a good example of such an approach.”
Crowe urged the FCC and state regulators to move toward “oversight of industry self-regulation of interconnection and funding and provision of basic services.” He said since the industry didn’t have a history of self-regulation, “this should be a careful and cautiously managed process, but when mature provides a much more efficient and effective result.” Crowe said regulators shouldn’t make any distinction between service providers based on type of service or technology used: “It seems increasingly obvious that to do so only creates distortions.”
“Regulators and policy makers should ensure that all users have access to certain basic services,” Crowe said. He stressed that defining the scope of those basic services was “the domain of policy makers, not the industry.” He said he believed that the scope of basic services “goes beyond local voice service… Access to a broadband network should be considered as a key matter.” Crowe said govt. should require service providers to interconnect on “a fair, nondiscriminatory basis and at cost,” as well as “to contribute to and participate in provision of basic service.” He said that concept had been “a key to competition historically” and it would be “critical in a broadband world where, increasingly, media and applications are separate from the underlying network and innovation service providers will depend on access providers to reach customers.”
Crowe said funds for basic service should be collected in a “fair, open and competitively neutral way.” He said there were “many ways” to do that: “For instance, I'm told that a monthly charge of about $1 for each telephone number issued to a service provider would be enough to fund today’s universal service and lifeline programs.” Crowe also said companies with service provider status should have access to public and private rights of way on a fair and nondiscriminatory basis.
Crowe said “limited regulation” is needed to prevent companies from imposing monopoly control of bottleneck facilities. He said companies controlling essential facilities should provide access to them “on reasonable, transparent and nondiscriminatory terms.” Crowe said essential facilities shouldn’t be controlled by vertically integrated firms that “abuse such control to maintain a dominant position by thwarting competition from other potential users of the facilities. Where the record is clear that firms have abused essential facilities, divestiture is the only effective remedy, period.” Crowe also urged regulators to provide “a rapid, cost-effective mechanism to resolve disputes between market participants, especially those involving a dominant firm.” Crowe said he realized many of his recommendations would require “significant changes to a century old legal and regulatory regime,” but he said “the stakes are high. Over the long term our national economic welfare and or security depend on us getting it right.”