Richard E. Wiley, outgoing chairman of the Federal Communications Commission, yesterday called for deregualtion of the burgeoning telephone equipment industry.
Although the FCC has introduced substantial competition into the equipment market over the past few years by eliminating what it believed were necessary telephone company connecting arrangements and charges, Wiley said yesterday that serious problems remain in assuring "full and fair competiiton" in the growing equipment industry.
In a speech to the International Communication Association conference in Toronto, Wiley said the problems stem from the fact that equipment supplied by independent companies is unregulated, while telephone companies must move through the regulatory framework - getting their rates approved with all the attendant delays inherent equipment is offered for sale.
On the one hand, the FCC has to concern itself with telephone companies offering terminals at prices below cost and which are subsidized by other consumers, Whiley are subsidized by other consumers, Whiley noted. On the other, it has to be concerned about the restrictions regulation places on the telephone industry's ability to respond to competition in a dynamic technological field, he said.
Deregulating the equipment market, with the government prescribing only requirements of connecting equipment to the system, would allow the telephone industry to charge separate rates for and the use of its lines, to respond rapidly to innovation, and to be less encumbered by depreciation schedule problems, he said.
Wiley also said the consequence of deregualtion would have to be considered in the contect of its effect on the regulated companies' revenue requirements because of the current procedures for allocating costs among different jurisdictions.