December 04, 2013

House to Rewrite Communications Act-Deja Vu All Over Again?


As my colleague and long-time associate Gary Kim has noted, on December 2, the U.S. House of Representatives, under the leadership of House Energy and Commerce Committee Chairman Fred Upton (R-MI) and Rep. Greg Walden (R-Ore.), the chairman of the subcommittee on Communications and Technology announced their intent to begin re-writing the Communications Act, the law that back in 1934 created the Federal Communications Commission and which provides the framework for the regulation by the FCC of the television, fixed and wireless telecommunications and Internet industries.

 In what is a sign of the times, the lawmakers announced the update during a Google Plus Hangout, an online video chat. They envision a multi-year effort that will start next year with a series of hearings and white papers next year. 

Here is what Representatives Upton and Walden had to say.  Upton explained that, "We must ensure that our laws make sense for today but are also ready for the innovations of tomorrow.”  Walden added that when the Act was last updated in 1996, "No one could have dreamed" of the coming advances in the Internet. Written during the Great Depression and last updated when 56 kilobits per second via dial-up modem was state of the art, the Communications Act is now painfully out of date.”  He even noted anecdotally that Google is now an "elder statesman," and did not exist in 1996.

My cohort outlined how challenging such an exercise is likely to be given all of the competing interests involved. He also noted how receptive virtually everyone with a horse in this race has already been on the need to update the Act.  Indeed, the time to do so is long overdue.   

Those who do not learn from history are doomed to repeat the mistakes of the past

I thought I might weigh in on the subject given personal experiences that those looking at the prospects of an overhaul may wish to consider. History here is important.

 In 1975, following the U.S. Department of Justice (DoJ) fourth anti-trust case against the old AT&T, under the leadership of then Chairman John deButts AT&T fired back.  At the company’s behest, legislation was introduced in both houses of Congress under the title, The Consumer Communications Reform Act of 1975, (aka “The Bell Bill).  While it never passed, it set off a debate that continues to this day, albeit with some minor modification reflective of the times in which we live. 

The problem with the Bell Bill was that it had absolutely nothing to do with consumers or reform. Indeed, it was an attempt at legislative affirmation of a notion first put forth by deButts In September 1973, in a speech entitled “An Unusual Obligation” given to the National Association of Regulatory Utility Commissioners (NARUC), that sought to codify the AT&T monopoly.  It embodied what deButts had promised to NARUC that the time had come to, “Take to the public the case for the common carrier principle and thereby implication to oppose competition, espouse monopoly.”

As a young lobbyist, I was part (a very small one) of the effort that helped kill the Bell Bill. However, the genie was out of the bottle. The late Congressman Lionel Van Deerlin, (D-CA), and a former broadcaster, was stirred by the prospects that re-writing the Communications Act to be competition friendly and proposed what became known as an “attic to basement” re-write.  For those interested you might wish to go back and read what was in the Van Deerlin legislation and sister bills in the Senate. They were radical for the time including things like AT&T being forced to divest Western Electric and Bell Labs with equally disruptive changes proposed for the cable and broadcasting industries. 

To those of us who favored competition over regulation the Van Deerlin efforts were pure genius. The goal was much the same as that articulated this week by new FCC Chairman Tom Wheeler in his first public speech about putting competition at the heart of a regulatory regime. The reason is because of its validity as the best means to promote innovation and consumer choice and access.  

The problem with the Van Deerlin effort was it was too ambitious. And, despite the goal of creating a level playing field in all of the converging markets so competition could thrive, the power of entrenched interests scuttled the efforts. The Congress did not lose interest in the subject, however.  The need for a re-write was obvious and there were political campaign contributions to be gathered. So, in 1996, Congress  did a bit of a technology reboot of the Act.   Most observers believe this was tinkering at the edges and contained too many goodies for incumbents.  I happen to be one of those observers.

Fast forward to today.  Yes we need another technology reboot of the Act. Plus, history has demonstrated that competition, tempered by adroit regulation where competition either cannot or does not serve the public interest is the way to go. We also need an economic and marketplace reboot.

The realities of the way in which U.S. policy-making works is that the FCC is an instrument of Congress. It takes its guidance in promulgating rules from Congressional intent and oversight.  What this means in the context of the desperate need to re-write the Act is that Congress needs to give Chairman Wheeler and his fellow commissioners a clear indication of its intent. Not that this will strike fear in the Federal Communications Bar Association whose members thrive on continuous litigation of everything, but there are a few basics that it might be nice to see as part of new legislation. 

I saw this based on the cold hard facts that the U.S., unlike many other parts of the world, does not have a universal service broadband plan. Based on recent industry reports about the persistence of an impressive digital divide in this country that holds us back from competing with the rest of the world, and the fact that our average broadband speeds are fair at best compared to other developed countries, the lack of a national program with clear articulation of roles and responsibilities is in a word, crazy. 

Any re-write to my mind should look at doing several things.  Below are just a few, and by all means feel free to send along your additions. Mine list includes:

  1. With the looming death of the public switched telephone network (PSTN) as we have known it, universal access to broadband (with set speeds and feeds by certain dates) is a must have. As noted this should include carrots and sticks and specified obligations for all who wish to play for assuring goals are met and penalties are meted out to those who do not comply. Maybe a piece of this effort, and I hesitate to use the term given the pejorative connotations occasioned by the bumpy rollout of the Affordable Care Act could be “The Affordable Communications Act.”
  2. The FCC is the steward of a scarce national resource known as the radio spectrum. We can’t create more of it, just allocate it wisely. The Commission could use additional instruction from the Congress on how such allocations should be made, including how long licenses last, ownership restrictions, etc., so that innovation and competition are encouraged and the role of such spectrum in meeting national broadband access needs are delineated.
  3. Congress has a role in setting policies, or at least providing guidance on the issues of net neutrality, regulation of the Internet (regarding       privacy, freedom of speech, and possible taxation) and those intentions need to be spelled out. While I understand and appreciate Chairman Wheeler’s remarks that regulation of the Internet is a non-starter, in certain areas government does have a role. This would include things such as assuring equal access, limiting child pornography and possibly hateful speech, determining the rules of the road regarding what is legitimate government intrusion to keep all of us safe versus unauthorized or unwarranted spying on U.S. citizens, and issues of facilities ownership for antitrust as well as national security reasons.
  4. Competition, competition, competition as the guiding principle needs to permeate whatever is done, and should be the place where the preamble to a re-write begins and ends.

The sub-heading above is one to take to heart.  What lawmakers are about to find out as they embark on this journey is that because of the critical nature of communications to the economic vitality of the U.S., re-writing the Act is going to rival healthcare and immigration reform in terms of the intensity of powerful interests who are going to wish to tilt things in their direction.  Competition and creating level playing fields are great philosophies, but when they collide with economic and political interests, getting from here to there is problematic at best.

I am not just talking about powerful economic interests. There are federal versus state jurisdictional challenges to be addressed. Things like trans-border data flows, U.S. positions on international radio spectrum and Internet regulations by foreign entities to be considered, and a host of other really complex issues. 

Plus, all of this is now in a caldron where industry convergence is not a promise but a reality which makes the sorting process of who is responsible for what that much more complicated. It is also an issue that by necessity is going to involve strong debates about the role of government in general which in this case may uniquely cross party lines.

One cautionary note should also be taken into account. While this is a noble and needed effort, reading anything into various parties’ statement of support for such an effort is premature. To say that the devil will be in the details is a gross understatement, and that is when the sharp knives will come out.

The trick in all such efforts has always been the same, i.e., balancing the needs of those who wish to disrupt markets and create new businesses with those of incumbents seeking to protect their investments, shareholders and yes customers. 

This is not to say lawmakers are on a fool’s journey. In fact, quite the contrary is true. We need a re-write, and a real one. And, while this has to be a long process, it cannot wait forty years.

This does not have to be in the words of Yogi Berra, “Déjà vu all over again.”  We can only hope that today’s lawmakers learn from history and find the will and a way to make this happen in a way that provides rough justice for the members of the industry, and universal broadband for all.  I believe the best we can do is wish them “Godspeed!”   




Edited by Cassandra Tucker



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