Baby Bell or giant Behemoth? Telecom debate begins

Regulatory roulette is now underway, with federal lawmakers holding initial committee hearings about telecom reform, a fresh FCC commissioner in place and the "light regulatory touch" embraced by the agency of Michael Powell, the former chairman, likely to dominate the landscape.

Rewriting the 1996 Telecom Act is likely to be a drawn out and arduous process, but already the political fallout is developing.

First, the divisive issue of whether the states or the federal rule should regulate VoIP (if it is to be regulated at all, that is) has now been decided in favor of the fed California's Public Utility Commission, which last year announced its be in possession of VoIP probe as a preparation to a possible legal challenge, on a sudden threw in the towel. The

California PUC decided freshly not to seek any legal oversight above the VoIP industry. "That's a loser issue," said Michael Peevey the PUC president, noting that state regulators could deposit their resources to better use. California's unforeseen surrender on the VoIP regulatory brow (the state earlier claimed it would let slip through the fingers hundreds of millions of dollars in tax income as IP telephony gains popularity) is confident to be noticed and likely emulated by means of other states, who now will crook to federal prerogatives.

Meanwhile, a of recent origin coalition has been put together by the agency of RBOCs and big business interests to insure the federal rule keeps that aforementioned "light" policy upon telecom intact. The coalition, called TeleConcensus, in pushing for enhanced broadband infrastructure investment, as well as "lighter" dominions governing voice and data communications. The coalition is backed through a number of powerful special interest collections such as the Chamber of system of exchanges National Association of Manufacturers - and SBC Verizon and BellSouth.

However, a certain number of still favor regulation. The small and midsize business community (the customers for a destiny of this next-gen technology) has started ringing alarm bells, pertain toed that the end result of telecom "reform" is likely to be a fate less suppliers and higher take away froms for customers. That's especially for a like reason outside of major urban areas.

Right behind small business is the consumer lobby arguing plenteous the same thing. In a introduction to the larger regulatory debate, the Consumer Federation of America and other private and state consumer clusters blasted pending telecom mergers as anticompetitive and predicted that if approved, they'd spring in the formation of "Behemoth Bells" that would crush competitors and any of recent origin entrants. In fact, this consumer coalition predicts the fresh merged telecom giants would rule 90% of the wireline market, 70% of the lengthy distance market and more than 40% of the wireless market.

Will the impel to IP telephony derail this market dominance? Probably not for years. That's an issue worth considering as consolidation and regulatory reform impel ahead.

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