WorldCom 'what ifs' spark talk of FCC role

Federal Communications Commission Chairman Michael Powell's recent remarks about the FCC possibly having no power to prevent a WorldCom Internet shutdown caused a minor stir, but observers say the bottom line is that WorldCom is unlikely to pull the plug on its Internet backbone.

However, experts say, Powell's comments do raise a point about whether the government should take steps to ensure that important Internet backbones remain running, even if the companies that own them can't afford to maintain them.

"I don't think Powell was trying to say there was a big possibility of WorldCom shutting down its UUNET backbone," says Thomas Nolle, president of consultancy CIMI Corp. and Network World columnist. "What he was trying to say is Internet services don't fall under the same control as telecom services."

Under Section 214 of the Communications Act of 1934, carriers must give 31 days notice before shutting down telecom services. That 31-day period can be extended indefinitely by the FCC.

Internet services can be labeled as information services rather than telecom services. Therefore, it's unclear whether Section 214 could be used to keep an Internet backbone running.

Powell said there are no signs that WorldCom is about to shut down its Internet backbone, but he warned the Senate Commerce Committee that if WorldCom, or another troubled Internet provider, had to shut down its Internet operation, the FCC might be powerless to prevent it.

"Our authority under Section 214 is at best unclear and at worst, does not extend to certain critical services such as the Internet backbone," Powell said.

He asked Congress to clarify the FCC's ability to prevent a service shutdown under Section 214.

Like Nolle, Lisa Pierce, an analyst with consultancy Giga Information Group, says there's no reason for WorldCom customers to worry about their Internet service. John Sidgmore, WorldCom's CEO, has said the company plans to emerge from bankruptcy and its UUNET Internet backbone would be key to any re-emergence, she says.

Nevertheless, "the lack of regulation on the Internet is a legitimate concern," Pierce says.

For example, Pierce says she wonders what would happen to converged voice/ data offerings in the event of a shutdown. Would they be protected as a telecom service, or would they fall outside the FCC's powers? The answer isn't clear, she says.

Nolle says the government needs to make changes to keep telecom legislation on pace with changing technology. But nothing is likely to happen until after the elections in November,he says.

"There would be too many special-interest accommodations until the new Congress is in place," he says.

Until new legislation gets passed, the FCC might sit on the fence about considering the Internet a telecom or information service, Nolle says. If the FCC is able to argue that the Internet is an essential telecom service, it might be able to keep the Internet backbones of financially unstable providers up and running.

Sitting on the fence has its consequences though, Nolle says. Earlier this year, the FCC issued a Notice of Proposed Rulemaking, seeking to classify DSL as an information rather than a telecom service.

The FCC's thinking was that this would encourage incumbent local exchange carriers, such as the regional Bell operating companies, to invest in more DSL technology. Currently the incumbent carriers say they aren't investing a lot in DSL networks because they are forced to share those networks with competitive providers.

If DSL were labeled an information service, it might not fall under the regulations of the Telecommunications Act of 1996 and might not be subject to the competition requirements contained in the act.

But classifying DSL as an information service might hurt the FCC's chances of keeping Internet services up and running if a service provider shut down its Internet backbone.

"Powell might have a better chance of enforcing a service continuance if he doesn't issue a rule-making," Nolle says. "But if he doesn't issue a rule-making, DSL will continue to be put on hold."

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