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FCC Chairman Outlines 6 Steps to Telecom Recovery

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WASHINGTON, D.C., August 1 -- FCC Chairman Michael Powell prescribed six steps for managing the current turmoil in the telecommunications industry and "for stabilizing the industry over time," during Senate Commerce Committee hearings this week.

Powell said the telecommunications market "is not collapsing and is not going to fail over time." However, he said it is "riding on very stormy seas. Recovery is not going to occur overnight and is likely to require difficult -- even painful -- choices. Successful recovery is dependent on the collective efforts of Congress, federal and state regulators, the private sector and financial markets."

Powell's six critical steps for economic recovery are:

(1) Protect Service Continuity. Powell said the first step is "to protect consumers by ensuring continuity of service and by maintaining the integrity and reliability of our nation's telecommunications network in light of the risks and realities stemming from future bankruptcies."

(2) Root Out Corporate Fraud. Powell said "governments must continue to vigorously seek out, prosecute and jail corporate wrongdoers that have personally profited while defrauding the American people."

(3) Restore Financial Health. Telecom firms must "clean up their balance sheets to restore financial stability and reality to this industry."

(4) Prudent Industry Restructuring. Citing problems of markets "glutted with excess capacity," he said, "One cannot think about long-term consumer benefits without also considering the long-term prospects of carriers that provide quality service to consumers. For other industry participants, survival and health will depend on prudent industry consolidation. Regulators will have to walk a fine line to achieve stability while not squelching competitive opportunity."

(5) New Revenue through New Services. To grow and expand revenues, companies must offer new services, Powell said, citing broadband services as a substantial growth area. "We must now focus on uncorking the network at the last mile, and regulatory policy must lead the way."

(6) Reform Economic and Regulatory Foundations. Federal and state policymakers must "continue to work diligently to create genuine and viable economic regulatory foundations for communications services and competition," including more pricing flexibility for local retail services, incentives for competitive entry, promoting deployment of advanced networks and promoting "more efficient use of spectrum whle continuing to find ways to get more spectrum into the market," Powell said.
Aug 2002
CommunicationsNews & Features

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