(Washington, D.C.) – Citizens Against Government Waste (CAGW) today criticized Federal Communications Commission (FCC) Chairman Michael Powell for ordering former Bell telephone companies to spend the next 30 days negotiating fees to allow competitors to use their wires.  If those negotiations fail, Powell says he will open another rulemaking, essentially taking the process back to square one.  The order came as a result of the March 2 decision by the U.S. Appeals Court, District of Columbia Circuit that struck down FCC rules designed to poster competition for local telephone service. 

“Even before the decision is made as to whether or not to appeal, the FCC stands ready to flush more tax dollars into the black hole of endless bureaucratic proceedings,” CAGW President Tom Schatz said.  “The Bush Administration should appeal to the Supreme Court for a clear and unambiguous interpretation of the law.”    

The 1996 Federal Telecommunications Act ordered the FCC to write rules encouraging competition with the former Bell phone companies – Verizon, BellSouth, Qwest and SBC – in local markets.  The Appeals Court said the FCC acted improperly by leaving it to state regulators to decide whether to prod competition between the former Bell companies and others wanting to provide local phone service.

“Bureaucrats can’t get enough of the taxpayer’s money to invest in expensive and fruitless hearings,” Schatz continued.  “A decision from the Supreme Court would allow the FCC to advance the law within a clear regulatory environment conducive to growth and investment in the telecommunications industry.”   

In a 3-2 decision last August, the FCC voted to let state regulators require the former Bells to lease parts of their networks to competitors like AT&T and Sprint at low prices.  The idea was that competitors couldn't afford to build their own networks.  The former Bell companies successfully challenged the rules, saying they left them at a competitive disadvantage and took away the incentive to build better networks.

“It’s not hard to see that the dog is chasing its tail,” Schatz concluded.  “After eight years and millions of dollars for hearings and legal fees, one would think Chairman Powell would welcome closure.  Instead, taxpayers are going to bear the brunt of this food fight between the Bells, Bell competitors, the FCC and the courts.”

Citizens Against Government Waste is the nation's largest nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.