SBC, FCC leaders face off at SuperComm

SBC Communications CEO Ed Whitacre and Michael Powell, head of the Federal Communications Commission, both spoke of the need for competition in local phone markets, which the Telecommunications Act of 1996 aimed to foster. But they put a different spin on how to achieve that goal.

SBC's top executive fired the first volley, expressing awe of how the communications industry has changed and displeasure at the current regulatory environment.

"The past five years have been nothing short of amazing," Whitacre said in a Webcast of the event. He noted how communications-dependent businesses such as application hosting and e-commerce did not even exist in 1996, the last time he spoke at SuperComm.

He praised the adoption of broadband Internet connections and underlined how the appetite for faster Internet service will continue to mushroom. SBC is the nation's largest provider of high-speed DSL (digital subscriber line) connections.

Whitacre also spent a significant amount of time pointing out flaws in telecommunications law.

The 1996 Telecommunications Act granted Baby Bells approval to enter the long-distance market if they agreed to open their local phone service markets to competitors.

Whitacre said SBC in 1996 thought it would gain approval to enter most long-distance markets by 1999, something that has not happened even though he predicts it will eventually become a reality.

He said local markets are competitive enough, with small alternative local phone companies and cable providers already offering voice and data services.

Powell spoke immediately after Whitacre and reminded the audience that the industry is in the middle of a "migration" away from an antiquated way of doing things. He said the FCC must adapt to this migration to remain useful.

Past FCC administrations, he said, focused on price and market power when they wanted to address competition issues. The new FCC will instead focus "on the right regulatory framework that encourages competition" and innovations such as DSL, cable and fiber-optic networks that run up to people's homes, Powell said.

He also reiterated his support for the criteria of how Baby Bells apply to enter the long-distance markets. The Baby Bells are lobbying Congress for a bill they say would allow them to compete more fairly and that would soften some of the current criteria.

Both speakers expressed optimism about the promise of the industry but acknowledged that the road ahead will be bumpy.

"Massive migrations and explorations are rarely smooth or uneventful," Powell said.