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Correction to This Article
This article incorrectly said that Rep. John D. Dingell (D-Mich.) urged the Federal Communications Commission to delay voting on a proposal involving TV airwaves. Dingell asked for further review, not a delay.
FCC Chief Pulls Plan to Rework Phone Fees

By Cecilia Kang
Washington Post Staff Writer
Tuesday, November 4, 2008

The chairman of the Federal Communications Commission yesterday scrapped a controversial proposal to overhaul how telephone companies pay each other to connect calls after the plan met bipartisan resistance from his fellow commissioners.

Republican Chairman Kevin J. Martin, who had drafted the proposal for a vote at today's agency meeting, has been criticized by lawmakers and consumer groups who say the plan could raise home phone fees by as much as $1.50 a month. Martin also dropped a proposal that would reorganize a $7 billion federal program that subsidizes the deployment of broadband services to underserved areas. The other commissioners had said that proposal needed further review.

The FCC is still scheduled to vote today on a plan to use idle airwaves between TV channels, called white spaces, for wireless broadband service. Entertainers such as Guns N' Roses and Dolly Parton oppose it, saying it would interfere with wireless microphones. Internet search giant Google supports the proposal.

The agency will also vote on proposals for Verizon Wireless to merge with rural wireless carrier Alltel, and for Sprint Nextel to merge with Clearwire to form a nationwide high-speed wireless Internet network based on WiMax technology.

Critics of Martin's telephone carrier payment plan said details were not open to the public and needed to be reviewed before a vote. They said they were concerned that what Martin had broadly outlined to other commissioners would benefit telecommunications giants AT&T and Verizon Communications by lowering the fees rural and smaller carriers can charge for connecting calls on their networks. Losses from lower fees could be made up by charging consumers more, they said.

"Consumers pay the rates in the end," said Chris Murray, senior counsel for Consumers Union. "What was on the table was impossible to evaluate, because there were billions of dollars at stake there but not a paper was to be found on it."

AT&T has told the FCC that the average increases in monthly phone rates would be about 67 cents for residents, with some residents not seeing any increase. But some lawmakers and consumer groups have said rates could go up to as much as $8 a month from $6.50 a month.

Martin criticized the other commissioners for being afraid to move forward on the overhaul because it was controversial, and he said it was long overdue. He rejected suggestions to open up the item for public comment and delay a vote until the agency's next meeting on Dec. 18, saying the issues have been debated at the FCC for the past seven years and had been open for comment two times before -- in 2001 and 2005.

Judging from his fellow commissioners' questions on the proposal, he said he doubted they would vote on the issue before the end of the year. "Whenever you are talking about wanting to deal with a comprehensive reform, you have to be willing to make a decision for what you think the right approach is," Martin said in an interview yesterday. "This is a missed opportunity."

Sources at the agency who spoke on the condition of anonymity because the debate on the issue was ongoing said Martin wanted to make a decision before the change of administration.

In a joint statement yesterday, the two Democratic and two Republican commissioners said the proposal needed to be given more time and public scrutiny.

"We approached this proceeding with the common goal of modernizing our universal service and intercarrier compensation policies, and commend the desire to tackle some of the most important issues facing this Commission. It is equally important to ensure that any reform proposal receive the full benefit of public notice and comment -- especially in light of the difficult economic circumstances currently facing our nation," the commissioners said in the statement.

Martin said he plans to rewrite a narrower version of the overhaul proposal.

Martin's proposal to allow portable devices to use "white spaces" airwaves for wireless broadband service is supported by tech companies such as Google, Microsoft, Hewlett-Packard and Dell. They hope it will spur the development of new wireless gadgets and services. But broadcasters and wireless microphone users say letting unlicensed devices use the airwaves would disrupt existing TV broadcasts and other nearby signals.

Martin has enough support from other commissioners to pass the white spaces order, according to people familiar with the matter. But in the past two weeks, opponents have aggressively lobbied to delay the vote to allow for more public comment. The National Association of Broadcasters and key lawmakers, including House Energy & Commerce Committee Chairman John D. Dingell (D-Mich.), have written letters urging Martin to postpone the vote.

Staff writer Kim Hart contributed to this report.

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