US senator's bill would overhaul FCC's authority

Bill would let FCC step in only when competition has failed

A U.S. senator has introduced a bill that would limit the U.S. Federal Communications Commission's (FCC's) policy-making power over telecommunications and broadband providers. The bill, in many cases, would allow the FCC to step in only when there's "clear and convincing evidence" that competition has failed.

The Digital Age Communications Act (DACA), introduced late Thursday by Senator Jim DeMint, a South Carolina Republican, would remove much of the FCC's ability to create forward-looking rules for telecom carriers and services, in favor of a more enforcement-based approach limited largely to addressing complaints of unfair competition or deceptive business practices.

The bill is a "very different paradigm" than both current law and a separate telecom reform proposal in the House Energy and Commerce Committee, said Randolph May, senior fellow and director of communications policy studies at the Progress & Freedom Foundation (PFF), a conservative think tank that's pushed for a new role for the FCC.

"It's a market-oriented approach that ties regulatory intervention to competition-based determinations," May said of the bill, which mirrors many of the proposals made during the PFF's Digital Age Communications Act Project, launched in February.

The bill, introduced as Congress aims to tackle telecom reform next year, would allow the FCC to make rules to define unfair competition and unfair or deceptive business practices, but it sets limits on those rules.

The FCC could move to fine communications carriers only after it proves a set of conditions, including "clear and convincing evidence" that there's not enough other competition to protect consumers; that the carrier's action causes or is likely to cause substantial injury to consumers; and that consumers cannot avoid the carrier's actions.

FCC spokesmen did not have an immediate comment on the bill.

Verizon Communications Inc., a large telecom and broadband service provider, praised the DeMint bill in a statement released Friday. Along with PFF, Verizon has called in recent months for Congress to limit the FCC's role to more of an enforcement agency, much like the U.S. Federal Trade Commission's role in investigating unfair business practices.

The DeMint bill "recognizes consumers" and will drive investments in advanced communications, said Peter Davidson, Verizon's senior vice president of federal government relations. "This vision stands in stark contrast to the anticipatory model that delays the roll-out of new products and services," Davidson said in a statement.

Meanwhile, a draft telecom reform bill being debated in the House Energy and Commerce Committee would retain much of the FCC's current authority.

The House bill, advanced by committee chairman Joe Barton, a Texas Republican, would streamline the video franchising process for competitors of cable television operators. The House bill would also require VOIP (voice over Internet Protocol) providers to offer 911 emergency dialing services, and would require broadband providers to let users access any legal Internet content or services and attach any legal device without "unreasonable" interference.

In contrast, DeMint's bill would phase out cable television franchises over four years, clearing the way for companies like Verizon to compete with cable operators. It does not include the so-called net neutrality protections that would allow Internet users to access any legal content or services.

DeMint, in a statement, said it's time that communications carriers face the same limited regulation as most other businesses. Congress should "take the shackles off of America's most exciting industry," DeMint said.

PFF's May said he's optimistic the bill will be considered seriously in Congress, even though consumer groups have expressed concern about a lack of choice. Telecom giants SBC Communications Inc. and AT&T Corp. merged in November and Verizon is likely to close its acquisition of MCI Inc. by early next year.

DeMint's bill would also:

-- Require the FCC and the Federal-State Joint Board on Universal Service to overhaul the Universal Service Fund (USF) program, which provides carriers subsidies to offer telephone and Internet service to schools, libraries, and poor and rural areas. The bill would set a limit on USF payments each year.

-- Defines communications networks as services to be regulated largely at the federal level, with the FCC having "exclusive jurisdiction" in most cases. The bill does allow the FCC to give state governments authority to enforce some federal rules and take some actions to protect consumers.