A Silver Lining to the Financial Meltdown?
10/08/2008 15:44
By Khali Henderson I was dumbfounded as I listened to Rep. Chip Pickering’s keynote address at the COMPTEL PLUS event this week in Florida. The Congressman, who is ending 12 years as a Republican representative from Mississippi, admitted the Republican Administration, Congress and FCC turned its back on the competitive telecommunications industry. Of course, this isn’t a newsflash, but it’s a surprising admission from a Republican. In case you missed it, here’s what he said: ”I think you began to see after the ‘96 Act, a change that occurred around 2001, 2002, 2003, 2004, when both the leadership of the committee, the leadership of the commission and the administration went from a policy of advocating and promoting competition to instead advocating and promoting and having policies ... of consolidation, concentration, elimination of competition. I can say as a Republican, I am not proud of that change in policy and emphasis because I think it is dangerous, and I think it’s against the core beliefs and values from Teddy Roosevelt, who wanted to break up trust so that we would have a more diverse economy. And a more diverse economy creates the greatest economy and the greatest strength, not a concentrated economy. “...The vision that you had in ‘96 has not always been sustained in Congress or by the FCC. But a new day is coming and that is good news. ... I do think we are about to see -- with either [new] administration -- positive leadership that will give us new opportunities to reclaim and restore the vision that started in 1996.” I was further taken aback by his suggestion that somehow the competitive industry capitalize on the current economic crisis to prove the strength of competitive markets. He said: “I do think the financial services collapse gives you an opportunity to say there is such a thing as a good regulation that enhances and promotes free markets and it does not intrude or encroach or distort markets. ...If we lose that [in telecommunications] we can have some of the same problems that we have had in the financial services markets. ...It is the examples of competition in Internet and investment that gave our economy the boost it got in the 1990s. We need to return to open policies, interconnected policies, innovation and investment policies in this sector.” It’s unfortunate that we have had to see the monumental failure of our financial markets in order to drive the point home. Was nobody in power paying attention when the CLEC market was left in tatters following the dot-com crash and funds dried up? Was nobody watching as the Bells began to reconstitute themselves? Was nobody watching as the ILECs gained in-region long-distance authority while hardly meeting the checklist requirements, including opening local markets? Was nobody listening when former FCC Chairman Michael Powell said telco versus cable was adequate competition? Is nobody watching while the ILECs retire copper loops? I could go on, but you get my point. Apparently, it takes a global catastrophe for a wake-up call. The early warnings on the financial crisis were sounded in 2005. So, I guess that means those “crybabies” didn’t yell “no fair” loud enough either. I am not sure any of us in the telecoms space would feel to happy about using this low point in our history to say: “I told you so.” But I certainly hope that Pickering is right that there is a chance to stop the concentration of power in telecom and to give competitors the chance they’ve been cheated. But that won’t turn back the clock all the way, offering little consolation to the competitors that were collateral damage of the policies over the past seven years.
User Comments !
To be fair, as we have seen time and again, when you talk about regulation and policy, the room empties. No one cares until it directly affects thier pocketbook.
If every CLEC agent and employee had poured letters into Congress and the FCC during 2005, things would likely have been different. Alas, having been there and seen the lack of support from the very people who make money in this industry, I can say that blame can certainly be spread around.
Posted by: Peter Radizeski | October 09 2008 06:27:25
I really didn't see that coming! It's truely unfortunate that it took a crisis of this magnitude to realize that regulation can be helpful but I'm glad to see this reaction. I just hope that Rep. Pickering's thoughts represent many others in Congress. Perfect title to the article.
Posted by: Adam Edwards | October 09 2008 15:32:59
Unfortunately the economy has taken a turn, and even more unfortunate, it took that turn to actually happen, to make a change. But it's far too little, far too late.
http://www.tcc5.com
Posted by: franklin | October 10 2008 13:12:03
When there is a slowdown, I can't understand why governments bail the banks out, they wouldn't bail out mom and pop stores would they...
It gets frustrating as as people have already stated, to little too late.
Posted by: Graham Gallagher | October 13 2008 11:07:52
Your post is good. It is an awareness i would say. Its frustrating that the technologies got affected.
Posted by: tinyurl clone | October 20 2008 06:58:47
I really don't understand the bailout but mostly don't understand the deregulation in the first place. Hopefully we won't make the same mistake twice.
Posted by: Connie937 | October 20 2008 12:28:34
There's nothing wrong with a little "told you so" as long as it is followed by current advice that people might now be willing to listen to.
Posted by: Stacy | October 21 2008 11:23:50
I'm in financial services in the UK. Regulation here has acheived little, but has driven many small brokers out of business. The regulators have presided over one financial fiasco after another, ultimately to the detriment of the public whom they are supposed to protect.
Posted by: Tony | November 03 2008 08:45:35
Bailout is only for their bank and investment firm buddies the people will never see any benefit from the bailout.
Will Dizon
Posted by: Will Dizon | November 03 2008 10:45:57
I can tell you that I am seeing more and more activity in our Boise real estate market even through this meltdown. People are starting to see that the home deals are too good to pass up. I guess we will see what the election does to this trend.
Posted by: Boise Ben | November 04 2008 17:27:21
I disagree with the bailout. People expecting the government to save them every time things get rough is unfortunate to say the least. The real sufferers are still treading water.
Posted by: Wedding Guy | November 04 2008 20:52:30
Very good post. Thanks for creating awareness.
Posted by: apatters | November 05 2008 03:24:54
I agree bailouts are only in place to protect their buddies on Wall Street and as usual the ordinary tax payer ends up paying. I think it would have been better to let all those banks etc fail as we will end up paying either way.
Posted by: Noel | November 05 2008 04:14:57
There are a few surprises in his statements, but after 10 yrs in Telecom and looking back in the Rearview mirror I actually agree about Consolidation and eliminating (some) competition. How can anyone say it was a good thing that we had over 300 CLECs at one point with many of them a Stock price 80-120.00 a share with no profits and too little market share for say 20-30 CLECs in a given market for even half of them to succeed.
It left a bad taste in the mouths of many Businesses when the CLECs started filing Chapter 11 & 7 starting in mid-1999. It gave the industry a black eye for several years. Today, the marketplace is a lot more realistic with less than a 100 CLECs Nationwide and a more reasonable amount of competitors in each MSA.
Plenty of blame to go around on Wall Street for funding too many start-ups that the Market could not bear.
Posted by: jay adams | November 05 2008 15:27:13
I don't know if the current financial situation is really going to effect the FCC and their handling of the media consolidation.
Posted by: rmt | November 07 2008 11:59:36
This post encourages me to be more aware. Both tehnology and economy as two important aspects are affected.
Posted by: Penny Bright | November 15 2008 00:37:55
My financial silver lining has been loan modification. My house was saved because of it!
Posted by: teresa | November 24 2008 14:35:24
I wonder if the financial situation is going to effect the FCC and their handling of the media and it's consolidation.
We'll see.
Posted by: Striper Ted | December 02 2008 14:21:43
Im so glad I no longer have a loan against my house.
Posted by: mark philips | December 04 2008 10:19:02
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