RESEARCH TRIANGLE PARK — The high-stakes battle for telecommunications’ future ended in a temporary draw in the opinion of many people last week when a badly divided Federal Communications Commission couldn’t reach a consensus on what big network providers should and shouldn’t be required to do.

The deep divisions within the FCC became quite clear when the five commissioners posted their reactions in print.

Chairman Michael Powell threw a fit.

The baby Bells and other carriers had been lobbying the five FCC members for months, pushing very hard to win all decisions one way or the other. Forbes labeled the decisions as “muddled.

Typically, FCC rulings are as entertaining to read as directions on how to use your PDA. Important and packed with information, yes. Fun to read? Hardly.

This time, Powell took the gloves off, much as his father, Colin, has been doing lately at the United Nations in trying to rally a balky Security Council against Iraq.

“I believe this decision will prove too chaotic for an already fragile telecom market,” he said of the move to let state Public Utilities Commissions have more control over unbundled service requirements and prices. “In choosing to abdicate its responsibility to craft clear and sustainable rules on unbundling to the State Public Utility Commissions the Majority has brought forth a molten morass of regulatory activity that may very well wilt any lingering investment interest in the sector. And, I fear as much or more for CLECs as I do ILECs, for the prolonged uncertainty of rights and responsibilities may prove stifling.”

(The CLECs are the competitive local exchange carriers, who want to ride the networks of the ILECs, or the incumbent carriers, such as Bell South, Sprint and Verizon.)

States’ rights?

FCC board member Kevin Martin, a Republican who was the key swing vote on the bundled services, countered by saying: “We recognize that competitors face different operational and economic barriers in different markets.” He insisted his stand would increase, not decrease, competition.

Powell wasn’t buying the power-to-the-states argument.

“To explain their decision, the majority has cloaked itself in the drape of ‘State’s Rights.’ (A classic conservative mantra not generally associated with a majority of democrats). This is a trivial misuse of a cherished constitutional precept,” he wrote.

And he wondered how successful states will be, noting there are likely to be law suits in every one and the nation’s capital about what “unbundled” means where and what’s a fair price.

“I must also note that the impulse to leave much more telecom policy to state commissions may run against the winds of technological change. Communications is converging, distance is fading as a meaningful construct in an Internet, cyber-space world, mobility is ascending,” he wrote. “These are the circumstances that necessitate, at a minimum, a coherent national framework of rules. States can play important roles in such a regime, but I am of the view that primacy must rest with the national government.”

Will anyone order hardware?

Powell has been a big advocate for lifting regulations imposed on the big phone companies, saying they will be driven by competitive pressure to upgrade networks and get fiber to the home for broadband. He also wanted to see the CLECs, the MCIs and the AT&Ts forced to build more of their own infrastructure rather than ride the Baby Bells and cherry-pick the best customers — especially businesses.

But by not giving the big companies all they wanted, Powell said: “I fear we will see more job loss as carriers cut their capital expenditures and refuse to move forward with new investment and growth against this Picasso-esque regulatory backdrop. I can only imagine how a business plan gets written by a CLEC hoping to enter the local market, not knowing now and not likely to know for years what they will ultimately be entitled to and for how long.”

Powell didn’t let the big carriers off the hook, either. They won a big victory over fiber access, he said, and it’s time for them to deliver

“And, I sincerely hope that those carriers who fought so fiercely for this result will now prove their value in the marketplace and actually deliver the local competition, lower prices and more innovative services that they insisted they would if they prevailed.” He said. “I, for one, will be watching.”

Monday’s Skinny: FCC Splits the ‘Baby’ – Will Phone Competition Live or Die?

Rick Smith is managing editor of Local Tech Wire.