With any luck, soon the FCC will have five members again after Tom Wheeler assumes his post as Chairman and Michael O’Reilly takes his as Commissioner. The sooner both commissioners are confirmed in the Senate the sooner the FCC can get moving on issues that really matter – primarily the incentive auction.
New commissioners bring the hope of change at the FCC; the perspective as to whether those changes are good or not is in the eye of the beholder. On October 24 the Free State Foundation held a seminar entitled “A New FCC or the Same Old, Same Old?” to discuss the outlook for reform in regulation of the telecommunications industry. Panelists included James Assey, Jr., Executive Vice President of the National Cable & Telecommunications Association; William Kovacic, professor at the George Washington University Law School; Robert Quinn, Jr., Senior Vice-President Federal Regulatory and Chief Privacy Officer of AT&T Services; and James Speta, professor at Northwestern University School of Law. Congressman Bob Latta (R-OH) delivered the keynote address.
Rep. Latta called for a review of the FCC’s operations, saying such a review was long overdue. He would like to see a decrease in regulation coming from the FCC in order to increase transparency and investment in the telecommunications industry, and believes that statutory reform from Congress is needed. There has been more investment in telecommunications than any other section of the economy, but Rep. Latta fears that ever-expanding regulatory reach will kill that investment if Congress doesn’t rein in the FCC practices.
The Congressman also advocated a cost benefit analysis in which the FCC would have to prove that the benefits of any regulation would outweigh the costs of doing it. However, panelist Speta expressed concern that a cost benefit analysis means nothing more than an agency saying they think the benefits of what they want to do outweigh the costs; such an analysis would mean “administrative law forever.” However, Speta was largely optimistic about the future of the FCC.
Assey's concern laid in the demonstrated regulatory overreach from the FCC in recent years. In order to encourage innovation and “networks as far the eye can see,” he said, the FCC would need to return the light-touch regulation that had worked in previous administrations. Quinn agreed that the FCC needs to rethink the way it regulates. Services they’ve traditionally had jurisdiction over have evolved as technology has changed, but the FCC hasn’t evolved with them. Ideally he would like to see a date set by which all legacy architecture was retired. Modernizing the FCC will require a complete mindset reorientation, so that it will be able to handle the challenges of today’s services and the services of the future rather than the services that were created in the last century. Kovacic agreed that larger policy reforms could mean very little if a broken regulatory framework remains in place.
The panel as a whole agreed that the upcoming net neutrality decision would mean almost nothing to consumers. From Assey’s perspective the cable industry is building an open Internet and the case wouldn’t change that. Speta believes the case will probably leave the issue largely unexplained, while Quinn noted that the case could launch policy makers into a debate over net neutrality lasting for years that would delay change on other important issues.
If the FCC is going to modernize, it ought to do so now. The FCC does have the tools to at the very least get rid of arcane rules via sunset. Wheeler and O’Reilly should look to the technology of the future and exercise regulatory humility in order to allow the telecommunications industry to innovate and thrive.