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AT&T's Cicconi to FCC: Change or Be 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 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 says.

"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,"
Cicconi says.

He had 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 says.

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 was using that supposed lack of broadband competition
to justify its Open Internet order.

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

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

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

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 (oral argument was heard Monday [Sept.

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."