It’s Time to Get Serious About a New Telecommunications Act

Wednesday the House Communications and Technology Subcommittee held a hearing to discuss updating the Communications Act with four previous FCC chairmen.  It has been nearly two decades since major amendments have been made to the Communications Act, leaving regulation outdated and out of stride with the ever evolving field of communications.  The internet has led to an explosion of new communications companies in the last decade, including Facebook, Skype and Netflix. 

Former FCC Chairman Michael Powell testified that any new Communications Act needs an assurance that government involvement is technology-neutral while still valuing consumer safety and protection.  He stressed a government oath of “first do no harm,” citing the incredible advancements the American communications sector has gained, and the importance of not tampering with policies that could have serious repercussions.  Today’s communications marketplace is in need of a simpler Communications Act that is more flexible, less cumbersome, and contains fewer rules and regulations. 

Among Powell’s recommendations, he would like lawmakers and regulators to keep in mind what promotes innovation in the communications field—free markets.  Powell addressed the need to treat like services in the same way to discourage picking winners and losers in the marketplace. 

When asked by Representative Blackburn what the responsibility of the FCC should be going forward, Powell responded that the FCC needs a fresh examination of its affirmative economic regulatory power, calling it a holdover from the New Deal era worthy of further consideration.  The core of the Communications Act should be to protect consumers from fraud and abuse, as well as limited regulation to ensure public services like 911 and prevention of monopolies.  The market can take care of the rest. 

Former FCC Chairman Richard Wiley reiterated similar themes, including treating like services in the same way.  An updated Communications Act should focus on maintaining consumer protection and public safety, including potential regulation of non-competitive markets.  But Wiley warns that new regulation should have a “lighter touch” and be accompanied by sunset provisions to allow for reconsideration of whether the regulation is still necessary.

Contrarily, Former FCC Chairman Reed Hundt does not see a need for a new law to be passed, believing that the FCC can adapt to new technologies and circumstances without revising the Communications Act.  “If it ain’t broke, don’t fix it,” said Hundt, touting the FCC as a model government agency. 

Unfortunately, it is broken.  Tuesday’s court ruling on the FCC’s Open Internet Order, commonly referred to as Net Neutrality, emphasizes the need for Congress to actively pursue a rewrite of the 1996 Telecommunications Act becomes even clearer.  The court noted that the rules are ambiguous and the ruling adds even more uncertainty to the broadband regulatory environment.  The FCC’s anti-blocking and anti-discrimination rules rose to the regulatory level of Title II common carrier coverage, and were therefore vacated.  However, the court reasoned that the FCC does have jurisdiction over the broadband infrastructure deployment and the flow of traffic on the Internet under section 706 of the Communications Act.

The court has left the FCC with options.  Under the current regime the FCC can attempt to rework the Open Internet Order in a fashion that does not reach title II regulation, the FCC could accept that these rules have lost in court yet again and accept that these prophylactic rules are unnecessary, or the FCC could reclassify information services under Title II.

These ambiguities, which may give the FCC jurisdiction that overlaps with the FTC, need to be clarified.  The decision to bring the Internet under an extremely restrictive regulatory regime, such as Title II, should not be left to five unelected regulators.  Our elected officials in Congress need to face the challenge ahead and get serious about a new Telecommunications Act.  Energy and Commerce Committee Chairman Fred Upton (R-Mich.) and Communications and Technology Subcommittee Chairman Greg Walden (R-Ore.) have pledged a rewrite; Digital Liberty looks forward to participating in this effort.