Photo of Douglas Jarrett

As the Federal Government shutdown concludes and Congress takes the necessary steps to avoid a default on the Federal Government’s debts, the Senate is expected to confirm Thomas Wheeler as FCC Chairman and Michael O’Rielly as the Republican replacing former Commissioner Robert McDowell.

With substantial experience in Washington policy and legislative circles, it is anticipated that the pace of agency decision making will improve as Thomas Wheeler becomes Chairman.  Apart from multiple decisions to be made in connection with incentive auctions, the new Chairman will have ample opportunity to promote competition.  The major issues are already teed-up.

The most important is the omnibus Special Access proceeding initiated in 2012. The Wireline Competition Bureau recently clarified the scope of services providers’ data submissions, noting that due dates will be set as OMB grants its approval under the Paperwork Reduction Act.  While the telecommunications industry has changed dramatically since 1996, special access services (Ethernet or TDM-based) from the price cap ILECs remain indispensable for interexchange carriers looking to provide service to customers, particularly to customer locations outside of core metropolitan areas. Even as wireless carriers diversify backhaul technologies, special access remains the dominant/default option.

As long as AT&T and Verizon, the two largest interexchange carriers and wireless carriers, benefit from above-cost rates for special access services of their affiliated price-cap ILECs (whether they or their competitors acquire special access services from these affiliates), the markets for wireless and interexchange wireline services remain tilted in their favor.

An equally critical matter is USF contribution reform. As highlighted by the comments filed in response to the FCC’s 2012 NPRM, there is no consensus on a path forward.  Yet, it is apparent that the FCC’s reclassification of facilities–based Internet access services as information services, the ease with which IP-based services fall within the statutory definition of “information services,” and the migration to IP services will continue to drive the USF contribution factor up to and beyond 15%.

Another high profile item is judicial review of the Open Internet Order.  Based on assessments of oral arguments in Verizon v. FCC  by Scott Cleland  and Bryce Baschuk, the D.C. Circuit Court judges are concerned that former Chairman Genachowski’s legacy decision imposes Title II-like “nondiscrimination obligations” on broadband providers that the Commission and the same court emphasized could not be imposed on wireless data services providers in the  Data Roaming Order.

As President Obama’s nominee, the new Chairman likely will implement the FCC’s landmark decision if it is affirmed or push for Supreme Court review if the D.C. Circuit rejects major elements of the Open Internet Order.  In light of the virtual carte blanche discretion conferred on agencies to  determine the scope of their statutory authority in City of Arlington v. FCC, despite the compelling dissent of Chief Justice Roberts, the ultimate resolution of Verizon’s appeal of the Open Internet Order could have broad implications regarding the scope of judicial review of all Federal agencies’ decisions.