Investors Don't See Most FCC Regulatory Changes as Critical: Levin
Regulatory changes being pushed by FCC Chairman Brendan Carr will likely have little effect on broadband deployment, New Street’s Blair Levin said during an Information Technology and Innovation Foundation webinar Tuesday. Other speakers noted that for the most part, the U.S. broadband market is highly competitive and getting more so, as fixed-wireless access and satellite broadband become more widespread.
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Copper retirement and revised rules for pole attachments “will matter,” but they’re “very incremental,” Levin said. “They’re good things to do” but will have a “very marginal impact.” He noted that no one on Wall Street is saying, “As a result of this, we’re going to invest a lot more.” The biggest thing Wall Street is spending money on is stock buybacks, he said. The FCC approved copper retirement and pole attachment items last month (see 2507280053).
On the media side, investors don’t think that the FCC changing the national broadcast ownership cap will mean YouTube and TikTok will face new competition, Levin added.
Wall Street investors don’t want carriers to invest in their networks; “they want their money back,” Levin said. When Verizon announced major investments in fiber in 2005, that wasn’t a positive for its stock, he said. “What you want is competition and market mechanisms, which drive the necessary investments.”
Joe Kane, ITIF's director of broadband and spectrum policy, said at the start of the session that regulation isn’t keeping up with how quickly markets are evolving. “We now have rapidly expanding fiber and cable footprints competing with 5G fixed-wireless and satellite services … reaching places once thought unreachable.” While the market has changed, many of the regulations are “stuck in the past,” he said. “That mismatch can hold back competition, innovation and investment."
Just counting the number of competitors “doesn’t necessarily answer the question [of] whether markets are competitive and how well consumers might be served,” said Gibson Dunn’s Svetlana Gans, a former FTC chief of staff. The price of service isn’t the only measure of competition, she added: “Competition is about enhancing consumer choice.”
Broadband speeds today are 20 times faster than when the FCC released its national broadband plan 15 years ago, Gans noted. U.S. markets are more competitive than international markets, and “consumers have a lot of options right now.”
Gans called for a level playing field for competition. “If you have similarly situated competitors that are operating in the same market, and one is subject to a different regulatory scheme, … it does create artificial barriers to competition.”
Former FCC Commissioner Mike O’Rielly said that in “the vast number” of U.S. markets, “there’s wide competition, and the technologies are fighting it out.” Consumers can choose from “five or six providers.” However, they have far fewer choices in sparsely populated areas, he noted. “That’s why we have a number of subsidy programs like the BEAD program.”
During the early 1990s, when Levin was chief of staff, the FCC focused on easing the path for wireless to compete with wireline, he said. Wired providers were “charging an enormous amount” to terminate calls on their network, which the agency addressed. “When we did that, wireless really took off.” The FCC also addressed wireless portability, he said. “In those days, we worried about the cost of long distance,” which is no longer a concern for anyone.