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Can the FCC go from regulator to facilitator?

Today, Tom Wheeler, chairman of the Federal Communications Commission, provided the House Subcommittee on Communications and Technology with three guiding principles he wants FCC policy to follow:

 

Promoting Economic Growth and National Leadership – technological innovation,
growth and national economic leadership have always been determined by our networks.

Competition drives the benefits of those networks, and we have a responsibility to see to
the expansion of those networks, including the appropriate allocation of adequate
amounts of spectrum.

Guaranteeing the Network Compact – a change in technology may occasion a review
of the rules, but it does not change the rights of users or the responsibilities of network
providers. This civil bond between network providers and users has always had three
components: access, interconnection, and the encouragement and enablement of the
public-purpose benefits of our networks (including public safety and national security).
The Commission must protect the Network Compact. For example, the right of access
also means the ability of users to access all lawful content on a network. That is why the
FCC adopted – and I support – the Open Internet Order.

Making Networks Work for Everyone – it isn’t just that high-speed expands, but also
what it enables. How networks enable a 21st century educational system, enable the
expansion of capabilities for Americans with disabilities; and assure diversity, localism
and speech are basic underpinnings of our responsibility.”

What was missing from Chairman Wheeler’s presentation was any explicit expression of the role the FCC expects to play in the knowledge and information markets.  Commissioner Jessica Rosenworcel probably came the closest to describing this role she opined that there may be too much focus on networks versus what amazing things networks are able to do.  I found this statement poignant given Chairman Wheeler’s earlier description of himself as a “network man”.  Mrs. Rosenworcel’s description of the FCC’s going forward role shed some light on what producers want to see from the communications networks but none of the Commission members actually shined the light directly into the room.

I agree with Mrs. Rosenworcel’s comments.  The FCC gets a bit too fixated with the networks carriers want to build versus finding ways to facilitate information flow across networks.  Chairman Wheeler’s network compact, which I have described before as net neutrality on steroids, is an example.  The network compact could be made applicable to knowledge and information providers by tweaking the three prongs-  access, interconnection, and the encouragement and enablement of the public-purpose benefits of our networks-upon which it is based.  I would delete the reference to encouraging and enabling public purpose benefits and replace it with facilitating the smooth and fast flow of information across the networks.  Such an amendment serves to incorporate a consumer-driven philosophy for how we look at the networks, especially given all the economic growth rhetoric from the House panel and the FCC members.

For example, my business partner and I wish to start an online institute that addresses human rights issues.  By incorporating a consumer-driven philosophy toward broadband networks, the FCC should focus on policies that help our institute exchange data with our subscribers at faster rates and greater capacity.  Just like middle mile and back bone carriers can enter into “speed lane” agreements with content providers, I should be able to partner with my Internet service provider for more capacity and greater data exchange speed with my subscribers.  The FCC should defer to the network compacts that I enter into privately with carriers so that I can provide exchange my knowledge market services quickly and efficiently.

Chairman Wheeler’s status quo plus approach to net neutrality is disconcerting and probably won’t change until after an opinion is handed down by the U.S. Court of Appeals-District of Columbia.  This might not mean an end to the debate over whether broadband services should be subject to Title II treatment, but should give opponents to net neutrality another opportunity to voice displeasure with attempts to further regulate broadband versus facilitating the information and knowledge markets.

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There is no coherent rationale for common carriage regulations

The title of this post came from remarks made by Christopher Yoo, professor of law at the University of Pennsylvania. Professor Yoo sat on a panel hosted today by the Progressive Policy Institute where the topic of discussion focused on existing common carrier obligations under the Communications Act. A common carrier, according to Section 153(11) of the Communications Act, is any person or entity engaged for hire to provide interstate or foreign communications by wire or radio, or interstate or foreign radio transmission of energy. Common carriers have a duty to provide communications services where the request is reasonable and granting the request is in the public interest.

Along with the public interest criteria comes the usual just, reasonable requirement for rates and charges assessed by common carriers and the prohibition against discrimination against consumers of communications services in the form charges, practices, classifications, regulations, facilities, or services. The issue here is whether these common carrier obligations are relevant in today’s broadband market.

I chuckle at my use of the word, “today.” As an old head I remember when common carriage referred to monopoly providers of local telephone services. The mandate that the Federal Communications Commission ensure the availability of a nationwide network that could be accessed by all Americans required that Americans not be turned away by communications providers of last resort. Compounding the need for this requirement was the monopoly status of these carriers. Even in 1996 when the Communications Act was last updated, Baby Bells and AT&T along with their little cousins GTE and United Telephone, still dominated the local and long distance communications landscape. Few people knew what a modem was (you had to be a true geek to have one), and mobile phones were still carried around in brief cases or big enough where they could be used to knock you over the head.

When i read the common carrier rules today, I can’t help but ask, “Why are these rules still in the books?” Today, voice is merely another app (one of one million apps to date); 11-year old kids have cellphones (I still refuse to get my 6th grader a smartphone); and people are watching live television on laptops, desktops (did I say desktops?), iPhones, and iPads. Choice is no longer an issue. Budget allowing, I could access the Internet from my apartment using three broadband platforms at the same time: a Verizon 4G “hotspot”; a Comcast cable modem; and an AT&T digital subscriber line.

Given this amount of choice, why should Google have to subject itself to non-discrimination rules and price schedule requirements from a bygone era of communications monopolies? Why should the broadband market run the risk of an innovative broadband provider not entering the market because its regulatory compliance costs are unnecessarily high?

While some advocate for applying a public utility model to the broadband market, I argue why drive up the costs for broadband access by using a model that has been abandoned by communications companies and failed the electric utility market. Analyzing common carrier rules in the context of today’s technology and multiple communications platforms should leave consumers with no other conclusion that we have broadband choice and that the common carrier framework is no longer relevant.