Quack Again: Martin Foiled on Intercarrier Compensation

Pressure to nix Tues’ vote to overhaul telecom rules won out with FCC chmn Kevin Martin canceling the controversial item less than 24 hours before the meeting. The other 4 commissioners—2 fellow Republicans and 2 Dems—were against the item, causing the words ‘lame duck’ and ‘Martin’ to be thrown around again. The Fab 4 said that Martin first shared his proposals to fundamentally reform intercarrier comp and universal service systems with them 3 weeks ago. "Four Commissioners provided the Chairman bi-partisan, constructive and substantive suggestions, and stated that notice and comment should be sought on the proposals, with an understanding that we would all be prepared to vote on Dec 18," the 4 said in a statement, adding that they felt public comment was especially important in light of the difficult economic times. "We also have asked the Chairman to narrowly address the ISP-bound traffic remand and the Joint Board’s Recommendation. We therefore are disappointed that the Chairman has withdrawn the fundamental reform item from tomorrow’s agenda." Martin said he was "disappointed that we will miss the opportunity for comprehensive reform" and questioned whether a delay until Dec 18 would make a difference. "The nature of the questions they would like to include makes me doubt they will have found their answers with an additional seven weeks," he said, arguing that "the far more likely outcome is that, in December, the other Commissioners will merely want another Further Notice and another round of comment on the most difficult questions… I recognize that few other issues before the Commission are as technically complex and involved, with many competing interests. But neither of those two realities are excuse for inaction." The Fab 4’s view aligns with that of the cable industry, with NCTA saying last week that there should be no immediate changes to interconnection rules and that the FCC should issue a further notice on the issue. The trade group also put forth its own suggestions for changes to the intercarrier proposal (in other words, if there’s no comment period, we’ll make our own). "The snag could… be good news for cable companies (e.g., CMCSA, TWC, CHTR, CVC, MCCC), which were worried about some of the proposed reform details, and could face an even stronger, strategic competitor in the Bells if the latter’s access charges and other intercarrier compensation costs were cut," Stifel Nicolaus said in a note to clients late Mon. But don’t count Martin as a total water fowl yet. It looks like he may be successful with his white space proposal, which would allow unlicensed use of a portion of spectrum between broadcast channels. The temperature in DC Mon was positive, despite interference concerns from broadcasters and cable. Of course, the Beltway is prone to sudden weather changes…