President Bush stays out of broadband policy

In remarks that seem unscripted, Bush gives lukewarm support to the FCC chairman.

BY STEPHEN N. BROWN

On Dec. 27, 2000, then-President-elect George Bush and Secretary of State nominee Colin Powell had dinner together and discussed "foreign policy [and]...their children," according to press reports. A few weeks later, Michael Powell had dinner with the President and was appointed chairman of the FCC. A father-son tag team is not unusual, because like other nations' capitals, Washington, DC has its share of nepotism. But when the tag-team's senior partner goes into decline, the same fate awaits the junior member. Eighteen-months into Bush's presidency, major functions of the State Department have been given to Homeland Security, while the Defense Department and National Security Council run their own foreign policies separate from those fashioned by the elder Powell-clear signals that he is not a member of Bush's inner circle. The disfavor visited on Colin Powell by the Republican party's extreme conservatives has found its way into the younger Powell's realm. In the past six months, the Competitive Enterprise Institute (CEI), a conservative think-tank, has mildly questioned the FCC chairman's dedication to "deregulation," as if he were a general afraid to fight.

What's in a name?
In March, the CEI's James Gattuso wrote, "Why isn't chairman Powell moving faster? One theory is that [he] is a follower of the military credo followed by his father...do not begin action against the enemy until your forces have overwhelming superiority....It is a cautious strategy...that may not fit well with telecom realities." This and other rumblings set the stage for Bush's remarks in June at a White House event billed as the "21st Century High Tech Forum."

The Forum was supposed to reveal the President's unflinching support of the FCC chairman's efforts to free incumbent telephone companies from Clinton-era rules. But in a speech that lasted over 20 minutes, Bush gave Michael Powell perfunctory treatment, not even mentioning him by name: "This country must be aggressive about the expansion of broadband...a lot of the action is going to come through the FCC. I know that, you know that. And I'm confident that the chairman and the board is focusing on policies that will bring high-speed Internet service, will create competition, will keep the consumers in mind."

Bush's tepid support angered another writer for CEI, James DeLong, who derided Bush for giving Powell nothing more than "15 seconds of presidential verbiage...like sending his father against the Iraqis without air support" and also criticized the White House staff for "steering the president away from politically controversial actions." But the President's enthusiasm may have been dampened by Powell himself, who has been widely quoted as saying he will wait "six to nine months" before making a final decision on deregulation-long enough to see the results of November's elections.

Truth in Jest
Bush probably knows something the CEI does not and that Powell ignores: The public fears "broadband" deregulation as a cover for the unfettered marketing of poor-quality, "high-speed," telecom service. For example, the White House was fully aware that chairman Powell wanted to unleash the incumbents by reclassifying digital subscriber line service as information technology, so that DSL becomes unregulated. But at the High Tech Forum, the President revealed his own skepticism, perhaps not of Powell's specific plan, but certainly of its technological basis: "I was interested to read that our government plans to spend $53 billion on information technology next year. Now, if you're one of the recipients of that $53 billion, make sure that the product actually works, please," and the crowd laughed.

Bush's sentiment matches public opinion. Two weeks after his remarks, a Yahoo news story, "Fed Up with DSL?", featured a quote from Soma Networks, a wireless company whose vice president, Greg Caltabiano, sounded much like Bush: "My impression is that people want broadband, whether it's 100k...or 1 Mg....They just want it to work." The same discontent with "broadband" telecom service appears in testimony of March 14 to the Senate Judiciary Committee, which held hearings on "Competition, Innovation, and Public Policy in the Digital Age." Jonathan Taplin, CEO of Intertainer, a company which distributes content for media companies such as Warner Bros., DreamWorks, and MGM complained, "[I]magine picking up your telephone and not getting a dial tone....That's the experience of today's broadband Internet user, who has no guaranteed minimum connection speed and often finds that their high-priced, high-speed service is scarcely crawling above dial-up." Taplin suggested that poor quality has not stopped the "broadband providers [who] are out in the marketplace today advertising the revolutionary benefits consumers will realize with these fast connections." He added, "[T]he fact that less than 6% of the optical fiber that was laid down in the tech boom...is in use should concern... every artist interested in reaching an audience...the FCC [should]...mandate a truth in advertising policy in regard to broadband."

Such a policy could not be developed or enforced by the agency, because it does not understand DSL, according to a discussion in an online forum: "It might help if the FCC...would actually bother to gain some ground-level understanding of the things they discuss...DSL is not a technology...not [a] service. It's a label attached by promoters...to a bunch of transmission line codes. DSL includes T-carrier, 2B1Q (implemented as Basic Rate ISDN, HDSL and SDSL), TC-PAM, CAP, QAM, and DMT. The line code is Layer 1, i.e., physical layer....It determines only the transport of the signal...all copper T1 services are delivered by DSL...removal of monopoly-restraining rules from DSL will mean the end of competition in T1 and fractional T1, whether it's data or voice...This is an I.Q. test and America is flunking."

Bush is not taking the test, but Michael Powell is. Whether the FCC chairman will pass is uncertain, but it may not matter, since his own political party views his policies and his future as just a reflection of the tag team's senior partner.