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FCC Downplays Telco Influence on Reform Plan FCC Downplays Telco Influence on Reform Plan

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FCC Downplays Telco Influence on Reform Plan

Federal Communications Commission Chairman Julius Genachowski pushed back on Thursday on the perception that he let telephone companies write the plan for overhauling the nation’s $8 billion phone subsidy system.

In a speech promoting his reform plan on Thursday, Genachowski said he collected input from an array of stakeholders—not just the phone companies—before writing his rules.


The plan “will not rubber-stamp or adopt wholesale the proposals of any stakeholder or group of stakeholders,” Genachowski said.

The FCC’s reform effort—which goes up for a vote later this month—aims to divert subsidies from traditional phone service to broadband. It would also streamline the system of payments between phone companies.

Phone companies came together for negotiations earlier this year and wrote out their own reform proposal. They are aggressively pushing the FCC to adopt it, and the agency brought the proposal into its official process by putting it up for public comment.


That worries cable companies, consumer groups, and state regulators. They are discouraging the FCC from taking too many proposals from the phone coalition.

Consumer groups say adopting the phone-industry proposal would raise landline telephone rates. Cable companies say the telecom plan would favor phone companies over cable for subsidies. And state regulators worry it would limit their power.

Critics have questioned whether the phone companies had an outsize influence on the process.

“It’s not that [telecom] shouldn’t have any say, but we're concerned they’re having the final say,” Matt Wood, a lawyer for Free Press, said in an interview. “The FCC should consider their input, but the final rules shouldn’t be about politics.”


State regulators also had process concerns. They said the phone companies did not give them enough information about their proposal to properly rebut it.

Cost models justifying the phone argument “remain in a black box, operating behind a screen,” Brad Ramsey, general counsel for the National Association of Regulatory Utility Commissioners, told the FCC in a filing.

In his speech on Thursday, Genachowski tried to assuage the concerns of state regulators and consumer advocates.

“States will have a vital and meaning role in ensuring accountability for broadband build out obligations, continuing their crucial responsibilities for protecting consumers,” he said.

The phone companies are downplaying their role in the official FCC process. Edie Herman, a spokeswoman for the phone companies, rejected the idea that the FCC will adopt the telecom ideas wholesale.

"Wouldn't that be nice," she said. "But it probably wouldn't be good public policy."

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