The US Federal Communications Commission is the world’s oldest and arguably still most influential telecom regulator, given it presides over about one-quarter of the global telecom market.

In recent years it has flexed that influence both directly with its campaign to reduce international settlement rates and indirectly with its 1996 Telecommunications Act which kicked off the worldwide trend toward unbundling of dominant access networks.

In recent years, however, the US has moved in its own direction, relaxing access obligations in return for increased fibre investment, incentives for new wireless builds via spectrum allocations and a market-led approach – just as other countries in Europe, as well as Australia and Singapore, pursue increased access and dominance controls over next generation network builds, sometimes in tandem with direct public investment in deployments.

CommsDay’s Grahame Lynch spoke with FCC chairman Kevin Martin at the ITU’s Global Symposium of Regulators to gauge his thinking on these regulatory issues and more. Martin has been the chairman of the FCC since 2005 and was a commissioner prior to that from 2001. Previously he worked closely with President George Bush on his initial election campaign and transition team for the presidency.

The theme of the Global Symposium of Regulators where we are speaking this year is infrastructure sharing. How applicable are ideas of sharing access networks and so in developed markets such as the United States?

The United States is a complex market and we have rules in place that require unbundling at times but we’ve tried to balance that with the recognition that we want to encourage and facilitate investment in next generation networks. For example, we remove the unbundling rules for fibre that is pushed to the home or deeper into the network. So it’s not that the concepts aren’t important, it’s just that their application is different.

I’d like to pick up on that as there seems to be some divergence on NGN regulation models. The US and Hong Kong prefer the open slather competitive access approach while Australia and Singapore seem to prefer a tendered and regulated fibre network with access to all comers – an effective grandfathering of the unbundling approach. From your point of view, do you consider that the US model has been a success and worthy of emulation?

I think what’s important is that there is no single model. Any application depends on the underlying circumstances of the country. In the US, the reason we were so interested in removing the requirements to share telecom infrastructure was because we already had a vast network of cable broadband providers who were unregulated and not subject to the same rules. The telecom provider was the minority provider of those broadband services and we had to take that into account. It doesn’t make sense to have higher regulations put on the smaller provider. You have to evaluate the facts on the ground. It is important to make sure consumers have the benefit of access but that also the operators have the appropriate economic incentives to operate the networks.

How is the United States dealing with the minority of people around 5-7% who currently lack access to broadband services or competitive services? What strategies are you adopting?

The 700MHz auction we are undertaking now will be an opportunity for the next generation of wireless broadband services. What you’re talking about are frequently rural high cost areas. Wireless is a very good approach for servicing customers that a traditional wireline company might not be able to provide. Obviously satellite can provide some broadband capabilities but upstream is difficult. Wireless should have the potential to solve these problems and 700MHz has the technical characteristics that can be utilized for wireless broadband in these areas.

I guess if other countries pursued such an allocation that would be good for the US policy because it would create more economies of scale in equipment manufacture…

Yes. 700MHz frequencies have traditionally been allocated to broadcasters and can carry a lot of information. It can travel through walls. It’s the kind of frequency that can be easily utilized to provide broadband service. It’s not the 5% of people you’re talking about that are driving up bid prices to $19 billion. It’s the fundamental continuing trend toward mobile wireless being in high demand. More and more of the demand is on the mobile side. 700 is an opportunity to solve that issue of unserved people but it’s the increased demand for mobile broadband throughout the whole country driving up the demand.

I wanted to ask about the FCC’s international agenda. For the past decade it has been actively trying to drive down the international interconnect prices and has been quite successful in that aim. But is there any unfinished business in this area?

It’s always desirable to work with all my counterparts on high access charges. We have similar issues on regulating new technologies such as IP. It’s a common problem. The commission considers the previous efforts on international access prices as a considerable success and we benefit from that policy to that day.

So what do you see as the main agenda for the FCC internationally in coming months?

I think an important part is addressing technological change from a common framework. We spend a lot of time exchanging ideas so we share the benefits of how we solve common problems. A lot of that involves education and sharing of that.

In recent times there’s been a heavy US focus on homeland security and the evolution of the so-called Team Telecom that submits overseas telecom firms such as cable builders to a high degree of law enforcement due diligence. There hasn’t been the same emphasis on this in other countries and they’ve gone the other way – we have the instance of a Australian cable builder (Pipe Networks) making information control and confidentiality commitments to US authorities that are directly contradicted by the information disclosure requirements of the Australian government’s FTTN tender. Is there a need for countries such as Australia and similar telecom hub markets and the US to think more about aligning these requirements?

The United States is focused on doing everything we can to ensure a safe and secure environment for homeland security but we also want to do everything we can to facilitate competition. In terms of your specific example on inconsistencies I have a hard time answering because we’re not actually part of Team Telecom. It’s the executive branch of Homeland Security. They are technical requirements and not appropriate to comment on them without understanding them.

Is there still a need for countries to make an effort to align these regulatory requirements and perhaps a need for more communication?

Generally I would say they do try to work with their counterparts on an international level. We think those homeland security requirements are important for other countries as well.

Finally, what do you see as the biggest challenge for regulators over the next five to ten years?

How do you facilitate immediate access and the need for long term incentives for investment? You have to migrate away from a regulatory environment with micromanagement to one that rewards investment. That’s a longer term challenge for any regulator.

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