Fcc To Push For Cut In Telecom Rates

Federal Communications Commission chairman Reed Hundt yesterday said the US telecommunications and broadcast regulator would stick to its demand for a reduction in the telecom accounting rate (TAR). FCC is now in talks with Videsh Sanchar Nigam Ltd (VSNL) over TAR, which is the bilaterally determined international telecom settlement rate.

We are discussing the issue with Videsh Sanchar Nigam Ltd. We continue to stick to our view point. Call settlement rates have to be rationalised to an acceptable international level, he said. Speaking at a seminar on telecom regulations organised by the CII S in Delhi yesterday, the FCC chairman extolled the virtue of free competition over regulation.

 

There is no rule of economics or physics in telecom that says there should be a restriction on the number of operators in communications. The rules of economics are the same everywhere. The more the players, the better the consumer is served. Competition produces tremendous innovation in every sphere, said Hundt. However, he said there should be a restriction on the number of players in wireless communications. The spectrum is a limited quantity. It is possible to run out of frequencies. There may even be issues of interference between two systems operating on the same frequency. However, the government should release as much spectrum as possible for commercial exploitation.

Regarding the bidding processes for telecommunications technologies, the Federal Communications Commission chairman cited the example of Mexico.

When... the government invited private bids for telecommunications services, there was a special social clause to cover every village and rural area. However, the successful bidders were allowed to chose their means and technologies. There was no beauty contest to select the best technologies or lay guidelines for the operators.

On the issue of separate regulatory authorities for telecommunications and broadcasting, the Federal Communications Commission chairman said the two bodies would find themselves regulating on similar issues.

Over a period of time, the improvement in technology will lead to a situation where both may find regulating the same things. Technology will converge the functions of the two bodies.

Hundt said call back services were a response to extraordinarily high international telephone tariff.

He said there was no written request from Videsh Sanchar Nigam Ltd to ban call back services from the US.

Call-back is just an innovative software solution to the problems of international calling. However, if Videsh Sanchar Nigam Ltd makes a request, we are willing to discuss this issue in more detail. But without such a formal request we cannot contemplate banning of such services.

Criticising the system of monopolies in telecommunications, the FCC chairman said telecommunications in the 21st century would have to function on a new business model to spur investments in the sector. This is the model of unrestricted competition. Consumers are better off if they have a choice.

Hundt opposed regulation of voice transmission on the Internet.

Voice on the Internet is just so many packets of data being transferred from one point to another. If you regulate one type, you got to regulate the other too.