The departure of Chairman Michael Powell will delay several key issues facing the U.S. Federal Communications Commission (FCC). But the FCC's commitment to telecom deregulation will remain unchanged.
On 21 January 2005, Michael Powell announced that he will resign from his position as chairman of the FCC in March 2005.
Michael Powell’s resignation was not unexpected, but the process of replacing him and Kathleen Abernathy, another commissioner who is widely expected to depart shortly, will be time-consuming and intensely political. Gartner believes that the FCC will continue to be controlled by commissioners committed to telecom deregulation (see "U.S. Election Results Keep Deregulators in Charge" ). However, the protracted confirmation process will likely delay decisions on several highly controversial issues now before the FCC, including:
Rules governing IP-enabled services, including voice over Internet Protocol (VoIP)
Rules on intercarrier compensation
Changes to the federal universal program, ranging from sizing to who pays and who receives
Permanent rules on how to regulate cable modem and DSL (digital subscriber line) service
The FCC must also issue a court-mandated order on the permanent rules for unbundling and Unbundled Network Element Platform UNE-P) services that were adopted on 15 December 2004.
Gartner does expect one change to result from Powell's departure: The FCC will likely take a more rigorous approach to considering the potential antitrust consequences of mergers and acquisitions in the telecom industry.
Carriers offering VoIP and other IP-enabled services: Market these services as if the FCC had issued its final order on VoIP deregulation. Gartner's predictions concerning the outcome of the order remain unchanged, even through the order itself will likely be delayed by several months (see "VoIP Forcing Changes in Telecom Market and Regulation" ).
Infrastructure vendors: Market a broad range of packetized and other solutions, because the FCC will eliminate switching from UNE-P and the FCC rules stimulating fiber-optic and other next-generation network placements by carriers will remain largely unchanged.
Enterprise telecom customers: Move aggressively to adopt VoIP and other IP-enabled services. Ask carriers of UNE-P services to detail their alternative strategies, and try to determine what savings will be obtained from competitive local exchange carriers that rely heavily on UNE-P.
Analytical Source: Ron Cowles, David Neil and Jay Pultz, Gartner Research
Recommended Reading and Related Research
"FCC's Unbundling Relief for FTTC Provides Vendor Opportunities" — An FCC decision lowers the threshold of market entry for advanced broadband access technology. By Bettina Tratz-Ryan, Ron Cowles and Jouni Forsman
"FCC Endorses Network Unbundling but Rules Are Far From Final" — The FCC has issued "final" unbundling rules, but court reviews still lie ahead. By Ron Cowles and Margaret Schoener
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