FCC chairman sees less regulation in the future

Friday, Jan. 9, 2004 | 11:08 a.m.

As technology advances, the federal government needs to step aside and let industries that are working to develop new products take the lead in dictating public policy, the chief regulator for the Federal Communications Commission said today in Las Vegas.

Michael Powell, chairman of the FCC, speaking at the second day of the International Consumer Electronics Show at the Las Vegas Convention Center, said too much regulation is one of the biggest threats to the development of new technology. Another threat, he said, are government officials who don't know the potential of technological advancements and are too quick to use obsolete rules in an attempt to regulate those advancements.

Powell spoke at the Consumer Show two days before it ends Sunday and one day after a flurry of corporate announcements including an industry-shaking deal in which Hewlett-Packard will bundle Apple's iTunes online music store with its personal computers.

Powell, who answered questions in a one-on-one Q&A session with Consumer Electronics Association Executive Director Gary Shapiro, said voice-over-Internet protocol is an example of new technology that some leaders want to govern with rules designed for technology of the past.

"Some people think that because you use a device that looks like a telephone to connect to it -- and some companies have put a ringer on it -- that makes it sound like a telephone and that we can regulate it in the same way.

"It's a scary impulse to say it's just a telephone," he said. "(When drafting regulations), we should start on the cleanest slate possible."

He said some of the old rules were drafted when telephone lines carried only voice communication and were in place when phone companies were monopolies in the markets they served instead of in competitive environments.

Powell said that when industry leaders get together to discuss problems, they usually come away with equitable compromises that can be developed into regulatory policy.

He acknowledged that it doesn't always work that way. He said he expects the FCC will need to step in to resolve disputes between broadcasters and cable television companies.

Powell said he expects voice-over-Internet protocol and continued definitions regarding use of the wireless spectrum as well as must-carry rules would be issues the FCC would address later this year.

On Tuesday, executives with several consumer electronics companies took advantage of the spotlight of the CES to unveil new gadgets that will soon appear on store shelves worldwide and contribute to what is expected to be a record sales year.

And one executive used the same CES spotlight to call attention to an issue within the industry and take a stand against the piracy of recorded music.

Carly Fiorina, chief executive of Hewlett-Packard, said during her keynote address on the opening day of the four-day convention, being staged at four Las Vegas locations, that her company would team with Apple Computer Inc., to develop a digital music player and also install Apple's iTunes music software on Hewlett-Packard computers.

But Fiorina also turned the stage over to music industry executive Jimmy Iovine, rock singer Sheryl Crow, U2 guitarist The Edge, country star Toby Keith, rapper Dr. Dre, singer Alicia Keys and actor Ben Affleck to deliver a verbal assault against music piracy.

"For years, parents and children have been given a pass to do something they knew in their heart was wrong," Iovine said of the failure of parents to stop their children from downloading music on the Internet.

Fiorina promised to place technology in HP products to prevent users from being able to duplicate protected music. Several of the celebrity guests spoke out against piracy during Fiorina's 90-minute address.

The duplication of music off Internet websites is controversial within the consumer electronics industry because many companies produce devices designed to download and store music. People who use those sites say they are sharing music they own with others, while the music recording industry characterizes it as stealing since record companies and artists receive no royalties in the transaction.

Popular Internet site Napster was shut down, then revamped after going to court to defend its music-sharing business model and the music industry vowed to track down and sue individuals who downloaded music.

HP's announcement to develop a music player with Apple was one of several announcements from companies hoping to drive sales with products offering variations on existing technologies, most of which would be easier to use than existing versions.

The head of the Consumer Electronics Association, sponsor of CES, issued a call for simplicity to drive sales. Shapiro gave some of the estimated 110,000 delegates attending CES good news about 2003's results in his sate-of-the-industry address.

Shapiro said sales of consumer electronics products are projected to break the $100 billion barrier this year, a 5 percent increase over 2003 when companies totaled $96.3 billion in sales.

Shapiro said the key to improved sales would be to deliver products that are easy to use. And several company executives committed to that plan in their respective keynote speeches and industry insider presentations throughout the day Thursday.

Panasonic demonstrated its emerging technology to turn the electrical wiring in a home or office into a conduit for transferring data.

Fumio Ohtsubo, president of Panasonic AVC Networks, said during his keynote speech that the company's HD-PLC device (for high-definition-ready high-speed power-line communication) would enable the transfer of data at 170 megabits per second -- fast enough to deliver high-definition video to different devices within a home.

Ohtsubo said if the HomePlug Power Alliance, an industry consortium, accepts the HD-PLC in its standards, Panasonic would begin selling the device, which plugs into an electrical wall socket, later this year. No price was given on the device.

Ohtsubo said his company developed the device, which converts data into a format that can be carried over standard electrical wires, in response to customers who wanted to reduce the amount of electronics wires they had in their homes.

Executives with Dell Inc., the No. 1 personal computer maker, outlined how the company would expand beyond its computer and television product lines, using its direct-to-customer sales strategy.

Chief Executive Michael Dell said his company would continue to develop partnerships with other companies to strengthen its new printer sales division. Dell announced Thursday that his company would partner with Fuji-Xerox, Eastman Kodak Co. and Samsung Electronics Co. on new printer deals. The company already partners with Lexmark International Inc. on printers.

John Hamlin, senior vice president and general manager of U.S. consumer business for Dell, also said the company's strategy of developing kiosk operations at shopping malls is not a deviation from Dell's successful direct sales model, but is being billed as an opportunity to put Dell devices into the hands of would-be customers who balk at buying any product without having the opportunity to touch it.

Hamlin said the strategy of placing kiosks in high-traffic locations, like shopping malls, would continue to drive the direct-sale model, not replace it. Dell has a kiosk operation at the Galleria at Sunset mall in Henderson.

Traffic was brisk on the trade-show floor all day with DVD technology still being one of the most popular things to see.

The CEA, which sponsors the convention -- Las Vegas' largest this year by total exhibit space and one of the largest by attendance -- said DVD player sales have continued to maintain the position as the fastest-selling technology of all time. Shapiro said 22.1 million stand-alone DVD players -- $3 billion in sales -- were shipped in 2003 compared with 17 million units and $2.4 billion in sales the year before.

The sale of digital cameras totaled $3.4 billion in 2003, up 22 percent from 2002. The association believes one in every three households has at least one digital camera in it.

archive