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AT&T’s Cicconi to FCC: Change or Become Irrelevant

The FCC has to stop picking winners and losers among companies, get out of the competition policy business, and must remake itself to be relevant.

That was the message from Jim Cicconi of AT&T to a Media Institute luncheon audience Tuesday (Sept. 10) in Washington.

"The FCC is a wired, analog agency operating in a wireless, IP world," he said, according to a copy of his prepared text," "and that only works with cognitive dissonance."

Framing the speech as advice to incoming chairman Tom Wheeler, Cicconi suggested it would be Wheeler's task to fix the problem rather than Congress' because it was next to impossible to get any major legislation through Congress.

He said the FCC is still geared to an era when wireline voice was a monopoly, the Internet was nonexistent, broadcaster and cable divided up the video audience and wireless was a niche service.

To make his point, Cicconi offered up some stats. Skype has 500 million registered users. AT&T and Verizon together have 21 million traditional access lines. "What’sApp, a very popular over-the-top text messaging application, sent or received 27 billion texts in one single day..."It's not complicated," he said

"In this situation, the FCC’s historic mission must be modernized to reflect the fundamental evolution in communications that IP technology and the Internet have wrought.  If it doesn’t, the agency will become irrelevant," according to Cicconi.

He offered his own plan for keeping the FCC relevant.

Cicconi said the FCC should leave enforcing competition policy to DOJ and the Federal Trade Commission and stop overtly picking winners and losers "under the cover" of that policy. "As more communications services are becoming applications that ride over broadband infrastructure-- and are being provided by non-traditional, non-carrier companies-- the need to have multiple agencies charged with “protecting competition” has vanished," he said

He argued that not only does it not need to be applying a vague "public interest" standard, but it needs to stop ignoring competition in the name of enforcing competition policy. He cited the FCC's unwillingness to acknowledge competitive markets even when its data shows it exists. "A dirty little secret of our industry is that we all know the FCC is afraid to draw the conclusions Congress mandated that it draw, because doing so would impede its ability to shape markets as it sees fit."

One of Verizon's arguments in challenging the was using that supposed lack of broadband competition to justify its Open Internet order.

"Invariably, when the FCC says it is acting to protect competition, it is really acting to pick winners and losers among companies," said Cicconi. 

He said the FCC should instead focus on consumer protection, public safety, oversee universal service mandates, manage spectrum and provide its communication technical expertise over legacy technologies while, at the same time, doing something "against its nature" by "allow[ing] companies to retire the legacy technologies and services upon which its traditional regulatory authority is based."

Cicconi suggested AT&T was not looking for a get out of regulations free card when it moved from legacy to IP delivery. "AT&T understands that we are not moving into a regulation-free zone.  We get that," he said. "But it would be just plain dumb to take regulations designed for a monopoly Bell System and try to apply them to modern, competitive Internet communications."

AT&T proposed geographic market tests of its theory on not applying legacy regs to the IP transition. The FCC has put that proposal out for comment, but Cicconi said the agency's delay in approving only a couple of wire center trials is "disconcerting."

One thing it shouldn't do is import Title II common carrier regulation into the new IP world. Under FCC chairman Julius Genachowski, the commission opened a docket on that prospect that it has so far declined to close. It is seen as a fallback if the D.C. appeals court vacates its Open Internet order, which Verizon challenged (the oral argument was heard on Sept. 9).

Cicconi said the FCC should not graft legacy phone regs on IP beyond minimal consumer protection rules applying to all no matter the underlying technology, and if it does not have the authority over all providers in a market, it should not regulate any subset of the market based on "obsolete distinctions."

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.