FCC Faces Republican Review

Even if Republican leaders don't follow through on their threat to reform the Federal Communications Commission, increased competition in the telecommunications industry will force changes

P> The Federal Communications Commission is facing the unpleasant prospect of fending off Republican attacks while it resolves numerous disputes left over from the 1995 telecommunications reform bill.

Reform of the FCC to further deregulate the communications industry "will be a major part of our committee's agenda this year," warned Rep. Michael Oxley, R-Ohio, vice chairman of the Republican-controlled House Committee on Commerce's Telecommunications and Finance subcommittee.

However, telephone industry officials and Democrats are rallying to the FCC's defense. Mary McDermott, a vice president for regulatory affairs at the U.S. Telephone Association, said the commission should not undergo further reforms until it finishes writing the many rules that will govern competition within the telecommunications industry. The telecommunications reform bill gives the FCC responsibility for writing rules for competition in the newly deregulated telecommunications industry.

But even its staunchest defenders acknowledge the FCC faces a very different future once the deregulatory telecom reform bill is implemented.

The FCC's role will shift to a greater focus on issues such as defining the notion of universal service in a fully wired world, said Blair Levin, chief of staff to Reed Hundt, the FCC's chairman.

The FCC's legal and technical expertise will also be needed to help resolve disputes arising from foreign investment in U.S. telecommunications companies, phone traffic over the Internet, spectrum auctions and the political demand that even citizens in poor areas have access to modern telecommunications, he said. "Universal service is the single toughest issue the commission will have to tackle," he said.

But in the long run, "clearly [the FCC] will be a very, very different institution," said Levin.

FCC reform is part of the Republican drive to deregulate industries as a strategy for promoting economic growth and reducing the role of government. Rep. Newt Gingrich, R-Ga., and Rep. Jack Fields, R-Texas, chairman of the Telecommunications and Finance subcommittee, have argued that the increasingly competitive telecommunications market can regulate itself, eliminating the need for tasks now performed by the FCC, such as setting price levels or reviewing proposed industry deals.

FCC critics also claim there is no way the agency can keep pace with the rapidly developing infotech industry.

To curb FCC oversight, Oxley said he thought the FCC's budget should not grow, despite the likelihood that telecom reform will create extra work for the FCC as watchdogs to make sure consumers get a good deal. The FCC's budget may be $175 million this year, pending budget negotiations.

But the FCC has political defenders, including Rep. Rick Boucher, D-Va., who sits on the Telecommunications and Finance subcommittee. "The FCC needs [the funding] that it currently has, and it potentially needs more in the short term," he said.

Congress's plan to increase the commission's 1996 budget from $165 million to $175 million, shows that it recognizes the FCC's important role, said FCC Commissioner Rachelle Chong.

FCC officials have also rushed to stave off Republican reform efforts by reforming themselves first. Chong predicted the agency would increase its rule-making efforts until a fully competitive telecommunications market exists. "After that, competition will replace regulation," she said.

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