FCC chief urges entrepreneurial freedom amid tech advances

Kevin Rademacher

Thursday, Oct. 28, 2004 | 10:47 a.m.

The nation's top broadcasting and telecommunications regulator made two stops in Las Vegas on Wednesday morning speaking about the rapid changes taking place in those industries.

He described the emergence of technologies such as Voice-over Internet Protocol (VoIP) telephone service -- which uses high-speed Internet connections instead of traditional copper-wire networks to send calls -- as one of a series of new changes certain to flood businesses and homes with new ways of carrying out traditional tasks.

"Communications now speaks the language of the computer," Federal Communications Commission Chairman Michael Powell said at the Communications and Internet Summit sponsored by the Technology Business Alliance of Nevada. "The Internet was the first-born child of that convergence."

Now, with the brood growing, the regulatory climate is struggling to keep up, Powell said. While the current structure is insufficient to manage the emerging products and services, where the new regulations will come down remain a mystery.

"Technology is a slave master, and it keeps cracking the whip" Powell said of the pressure on regulators to come up with a workable plan.

With the uncertainty over new regulations, however, some communications executives are worried that investment funds may dry up while the industry waits for guidance from the FCC.

Powell acknowledged the concern.

"These are billion-dollar bets, and we're trying to find that clarity," he said.

Sen John Ensign, R-Nev., agreed that uncertainty was problematic, but he also pointed to the importance of crafting meaningful regulations. The ideal scenario would be a major reform to the 1996 Telecommunications Act that "lets the market determine the winners and losers," he said at the summit.

However, Washington special interests, Ensign added, are likely to derail such an effort.

In the meantime, technology will continue to put pressure on a regulatory structure built around classifying companies as either video, voice or data providers. VoIP, however, is essentially an Internet (data) service being used to deliver voice. Cable companies (video) also are now providing Internet (data) service.

"Technology will not respect these artificial limits," Powell said. "The pressure will build. It's going to blow up either way."

He said the regulatory challenge will be trying to emulate the casino demolitions on the Strip that use controlled explosions to bring down out-dated structures.

"The question is, 'Can it be imploded creatively?' " he asked.

Speaking later in the day at WISPCon -- a convention of wireless Internet service providers -- Powell said the ultimate product of any new regulation must be entrepreneurial freedom.

"It needs government to make rules clear enough and a foundation clear enough to let entrepreneurs do what they do best," he said "Invent, take risks and deploy (new technology) ... The government isn't the one that's going to invest the capital and take the risks."

At least one local VoIP provider said that regulatory uncertainty would not stall its business efforts.

"We are not going to wait," said David Clark, president of Las Vegas-based CommPartners. "We made our assumptions a long time ago."

Clark added that the passion with which Powell urged businesses to press forward was encouraging, but he did point to an "undercurrent of uncertainty about how and when the formal regulatory process evolves."

The assumptions made by CommPartners, Clark said, included the possibility of eventual regulations that could cut into revenue.

"If you are paying attention to those issues," he said. "You can continue to move your business forward."