FCC Oversight Hearing Puts Regulation and Taxes in Spotlight

Yesterday, the House Commerce Subcommittee on Communications and Technology dragged all five FCC commissioners up to Capitol Hill to oversee the agency on a wide range of issues. As to be expected, there were some notable takeaways on regulation, taxes, spectrum, and more.

First, Commerce Committee Chairman Fred Upton (R-Mich.) managed to get FCC Chairman Julius Genachowski to commit to maintaining a “light touch” approach and not enact new regulations on fiber networks, including price controls. The FCC adopted the policy back in late 2003, noting that such requirements “tend to undermine the incentives of both incumbent LECs and new entrants to invest in new facilities and deploy new technology.” The Commission scaled back regulatory mandates and price regulations leading to the past decade’s surge in high-speed, IP network expansion.

Of late, however, there was much uncertainty as to whether Chairman Genachowski was positioning to roll back the 2003 order, leaving companies unsure as to whether they should continue to invest billions of dollars on upgrading and expanding their networks. Upton’s questioning helped put that uncertainty to bed:

Upton: Would you agree…that the hands off approach is working?
Genachowski: In general, we’ve seen tremendous…progress in the space and a light touch and relying on competition is our dominant strategy.
Upton: And you don’t have any plans to reverse that, do you?
Genachowski: I don’t have any plans to revisit…
Upton: That’s good.

Also notable from the hearing was a bipartisan call by numerous representatives and FCC Commissioners for federal agencies – which control 60 percent of ideal spectrum for mobile broadband – to give up their spectrum and put it to use in the private sector, where there is high demand and better efficiency. Earlier in the day, Congress’s Federal Spectrum Working Group sent a letter to the National Telecommunications and Information Administration (NTIA) to inventory all spectrum held by the military and others with a similar aim.

At the hearing, Commissioner Robert McDowell also called for “new ways to encourage the Executive Branch to relinquish federal spectrum,” and his sentiment was echoed by newly appointed Democrat and Republican Commissioners Jessica Rosenworcel and Ajit Pai.

Lastly, as the Commission finishes reforming the Universal Service Fund, a multi-billion-dollar spending program to subsidize phone and broadband service, Commissioner McDowell rightly noted that efforts to curb spending has not sparked enough of an effort to reduce the tax. “As this automatic tax increase skyrockets into unprecedented stratospheric heights, we have an obligation to finalize fiscally prudent reform as soon as possible,” he said.

In recent years, the FCC has become somewhat of a rogue agency, passing regulations with little to no statutory authority. As a result, this was the seventh time FCC Chairman Genachowski has been called to testify. Here’s to hoping it won’t be the last.

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