Where is the FCC’s Legitimacy?
November 29, 2010
It appears the FCC has lost sight of the essential fact that legitimate policy must come from a legitimate process.
Currently, the FCC is reportedly preparing to mandate net neutrality regulations December 21st, ostensibly to ensure an open and transparent Internet.
- Unfortunately, the FCC has not been open or transparent at all in its process of late, giving the public or markets no public justification, rationale, or explanation why what they are planning to force is legitimate.
- How does not following or respecting the spirit or principle of “openness” in FCC “open” Internet policy making — engender legitimacy?
How does the FCC seriously threatening to impose the “nuclear option” of Title II telephone regulation of the Internet behind closed doors, in order to coerce assent for, and compliance to, unnecessary, unjustified, and unwarranted permanent net neutrality regulations under Title I — engender legitimacy?
How does the FCC deciding its most controversial rule making exactly in between the seam of the current Congress, where ~300 members asked the FCC to defer to Congress, and the future Congress, which has made it clear they want the FCC to defer to Congress — engender legitimacy?
How does deciding the most controversial rule making in recent FCC history at the functional equivalent of the dark of night, December 21st, when everyone will either be preparing for the holidays/vacation and the fewest amount of people will be paying attention — engender legitimacy?
How will the FCC forcing this net neutrality vote into a highly contentious 3-2 partisan vote, when every previous FCC net neutrality decision was based on the legitimacy of 5-0 unanimous bipartisan votes — engender legitimacy?
How will regulating the Internet for the first time, based on no evidence of a problem that needs to be solved — engender legitimacy?
How will preemptively regulating the Internet in a way that slows innovation to the pace of the FCC’s bureaucracy, and discourages new investment, economic growth, and job creation, when the economy is fragile and when the FCC Chairman recently declared to NARUC “At the FCC, our primary focus is simple: the economy and jobs” — engender legitimacy?
In sum, for industry, the economy, job creation, and the Nation to succeed, the FCC needs to follow a legitimate process to create legitimate policy that will stand the test of time, court challenge, the bipartisan Congress, investment, and the economy.
- The FCC has too many legitimate problems to solve (universal service, freeing up spectrum, public safety spectrum, etc.) in the months and years ahead for the FCC to endanger its ongoing policy making legitimacy in the Internet era by unnecessarily, and unjustifiably over reaching on net neutrality in a manner and process that devastates the FCC’s Internet policy making legitimacy going forward.
The FCC’s Positive Policy Pivot?
November 16, 2010
FCC Chairman Julius Genachowski signaled a major FCC policy pivot Monday, from a fourteen-month focus on regulating net neutrality to apparently a new singular focus on “the economy and jobs” — in his annual speech before NARUC, the association of state utility regulators.
- (Kudos to Randy May of the Free State Foundation for flagging this very significant policy shift in his outstanding post.)
Takeaways from the FCC Chairman’s speech.
First, this is a very significant speech to pay attention to, because the FCC is laying out what the states can expect from the FCC in the year ahead.
- In other words, what the FCC Chairman tells the states that the FCC will focus on, (and not focus on by what he does not mention) lays out the general practical parameters of the FCC Chairman’s policy vision.
- Politically it is also a good and reliable guidepost for the FCC’s latest policy thinking, because the FCC does not want to blindside or whipsaw NARUC on major policy matters.
Second, it is highly noteworthy that in this speech the FCC Chairman did not speak the words “net neutrality,” “free and open Internet,” “Third Way” or “Title II re-classification,” given that that policy vocabulary dominated the FCC Chairman’s lexicon for the last fourteen months.
- The omissions were likely purposeful; and the silence speaks volumes.
- This strongly suggests that the Chairman has read the latest political tea leaves and decided to pivot from the FCC’s extremely controversial open Internet regulation policy focus — to a more bipartisan policy focus around the National Broadband Plan consensus of getting broadband to unserved Americans.
Third, this NARUC speech is the strongest public evidence to date that the FCC Chairman effectively has abandoned his proposed “Third Way Title II Re-classification”plans that would have regulated currently unregulated Internet information services like regulated telephone networks.
- Many don’t appreciate that one of the very messy complications of any FCC Title II broadband regulation would have been to undo the FCC’s exclusive Federal jurisdiction over the Internet and enable the 50 states to price regulate the broadband Internet.
- Given how intimately state regulators would have had to be involved in implementing the effective brain surgery of regulating the broadband Internet, this speech is very strong evidence that the FCC Chairman no longer wants to go there.
Fourth, the speech implies a major shift in the FCC’s recognition of how much broadband competition actually exists.
- Remember the Open Internet speech assumed that broadband ompetition was insufficient to protect openness/net neutrality, and that new FCC regulation was necessary to promote more broadband competition to ensure Internet openness.
- It is telling that this speech was silent on there not being sufficient competition, and was replete with more free market friendly references: “catalyze private investment,” “foster job creation,” “cut red tape,” etc.
Finally, the Chairman’s speech appears to signal an end to the FreePress-inspired pro-regulation mantra that the “U.S. is falling behind in broadband,” because the FCC Chairman said in his NARUC speech: “The U.S. is leading the way in 4G, and we need to be sure we maintain that lead.”
In sum, hopefully this is a watershed policy speech by the FCC Chairman, which returns the FCC to the more bipartisan, consensus, and market forces approach to broadband Internet policy of the past.
- It now looks like the FCC is no longer interested in listening to the radical FreePress siren song to regulate net neutrality in the absence of a problem and to ignore the need to focus on spurring private investment and private sector job creation.
It is very encouraging to hear the FCC Chairman declare in a major FCC policy speech that the FCC’s “primary focus is simple: the economy and jobs.”
FCC Should Declare Victory
November 15, 2010
Comcast’s EVP David Cohen spoke at Brookings today on “Who should Govern the Internet.”
- His thesis was dead on and well worth spotlighting — the Internet is an engineering creation and the Internet flourishes because it lives in the collaborative and capable hands of engineers dedicated to making the Internet work for everyone.
- The speech explained how engineers working together in forums like the IETF and BITAG can solve, and solve quickly, issues that others try to unnecessarily involve lawyers and regulators in.
My big takeaway from the event, was that the FCC should declare victory — that we have a free and open Internet — and then get back to the real pressing work facing the FCC — the National Broadband Plan.
There are no existing net neutrality problems, and no technical issues that the industry engineering bodies, IETF and BITAG have not been able to resolve.
There is simply no need for the FCC to fix an Internet that is already operating as the FCC and most everyone expects it to operate.
Does FCC want broadband competition to succeed?
July 21, 2010
Is the market, or the FCC, the problem in “timely and reasonable” broadband deployment?
- The FCC’s just released 706 broadband report, like the wireless competition report that preceded it in May, again indicts the broadband industry for not meeting the FCC’s new arbitrary, subjective, and after-the-fact expectations of where the nation should be at this particular point in time, despite the FCC’s own facts that 95% of Americans have access to broadband and that Americans have more broadband competitive choices than any country in the world.
To see if the FCC is more interested in actually getting broadband deployment to all Americans fastest or in micromanaging broadband access, economics and providers — look at how the FCC has burdened LightSquared, the start-up that seeks to be the EIGHTH national U.S. broadband competitor!
- (To count: 1. cable, 2. DSL/Fiber, 3. Verizon Wireless, 4. AT&T Mobility, 5. Sprint, 6. T-Mobile, 7. Clear (WiMax); & 8. LightSquared.)
Some context is needed here.
In the aftermath of the Great Recession, when credit remains tight, jobs are needed, and broadband investors are highly concerned about earning a return on long term investments, especially given a well-known more Title II regulatory-minded FCC/Adminstration, the FCC has effectively torpedoed much of LightSquared’s ability to raise the large amounts of capital over time it will need to build-out, launch and operate an EIGHTH national broadband network.
Despite the FCC knowing the high risk of deploying a satellite broadband network in a “timely” fashion (given Teledesic & Iridium‘s prior experience), the FCC piled on massive regulatory burdens on this start-up before it could even start.
- First, it made it much harder to raise capital by arbitrarily cutting its potential addressable market by more than half by effectively banning it from earning any revenue from wholesaling bandwidth to the nation’s two largest wireless broadband providers Verizon and AT&T.
- Second, the FCC effectively mandated a wireless net neutrality model that potentially will prohibit LightSquared from innovating with reasonable network management or ever experimenting with other business models if market conditions ever were to warrant it.
- Third, the FCC imposed strict build-out benchmarks and timetables on the platform, signaling to potential LightSquared investors that the FCC bureaucracy will be the equivalent of LightSquared’s shadow General Contractor.
In sum, if the FCC was truly interested in broadband competition succeeding, and actually encouraging broadband deployment in a timely and reasonable manner like the 706 provision and the Telecom Act require, the FCC would not be taking repeated actions that capital markets naturally would interpret as obviously hostile to broadband competition policy.
- The FCC’s inexplicable 706 broadband conclusion that broadband deployment is not timely or reasonable…
- …on the heels of the FCC’s fact-challenged finding that wireless is not effectively competitive…
- …on top of the FCC seeking to regulate broadband information services as telephone monopolies with no legal authority or factual predicate of changed circumstances…
- …on top of the FCC imposing mandatory Open Internet/net neutrality broadband regulations when there is no evidence of a problem to address…
- …cumulatively show that the FCC does not support the bipartisan consensus competition policy in the Telecom Act, but is pursuing its own unauthorized “de-competition policy.”
FOR IMMEDIATE RELEASE
July, 20 2010
Contact: Scott Cleland
703-217-2407
FCC 706 Report: U.S. Broadband Cup is 5% Empty
FCC’s criticism misplaced; broadband industry has over not under achieved
WASHINGTON – Scott Cleland, Chairman of Netcompetition.org, released the following statement regarding the FCC’s unprecedented 706 Report conclusion that broadband deployment is not timely and reasonable.
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“It is stupefying that the FCC could conclude that broadband service, which has reached 95% of all Americans faster and with more competitive choices than any deployed communications service before it, could somehow be judged as not timely or reasonable.”
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“What is unreasonable is for the FCC to ignore the obvious deployment facts before them, and to criticize industry for not deploying to the less than 5% of the nation where the FCC knows it to be uneconomic to serve competitively, and when the FCC knows that industry is, and has been, working very closely and constructively with the Federal Government on promoting universally accessible broadband and the National Broadband Plan.”
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“What is shake-one’s-head unreasonable is for the FCC to take a 706 broadband “incentives” provision of the Telecom Act and twist an FCC report to justify erecting unprecedented FCC broadband Title II regulations that would powerfully dis-incentivize broadband deployment more than any other FCC policy change the FCC has ever considered.”
NetCompetition.org is a pro-competition e-forum representing broadband interests.
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