FCC Wholesale Regulation Spurs 'Phony Competition,' Campbell Says

forgotten what 'competition' actually means," said Campbell, in a Forbes online commentary Thursday. Regulating the wholesale rates that large telcos charge competitors for business special-access services to create "synthetic competition" may have made sense in the previous "natural monopoly market," he said, but that approach was "discredited" by the emergence of "real competition" in the late 20th century. Giving upstarts the "legal right to piggyback" on incumbent networks robs them of the motivation to deploy their own facilities to compete more robustly, he said: "The alleged need for wholesale access regulation to remedy natural monopoly thus becomes a self-fulfilling prophecy. Once the FCC imposes wholesale access regulation, it creates perverse incentives for the formation and maintenance of an infrastructure monopoly that would otherwise not exist." While the FCC lifted wholesale regulation of fiber more than a decade ago, Campbell said, Europeans embraced such regulation, only to reverse course recently after finding their network investment lagged in the U.S. and parts of Asia." The FCC is now proposing to take the U.S. back in the opposite direction," he said, noting the agency's recent IP transition actions requiring incumbents to offer competitors wholesale fiber access on an interim basis.