Wednesday, October 27, 2010

Reforming Communications Policy:The Constitutional Underpinnings

One of the chief benefits of the rise of the Tea Parties has been the increased awareness of constitutional principles they have brought to public policy debates. Whether questioning the constitutional authority for ObamaCare's compulsory individual mandate or the massive bailout of automobile manufacturers, raising such constitutional concerns is not unhealthy in a regime grounded in the rule of law. Indeed, it is unhealthy not to at least consider such concerns.

In that spirit, and in advance of Tuesday's elections, I want to offer here, in admittedly brief and broad outline, some thoughts on ways in which communications law and policy would benefit from closer alignment with widely shared constitutional values. I am not making the claim that existing constitutional jurisprudence necessarily dictates reform along the lines I advocate. It doesn't – for now.

But that doesn't mean that communications policy shouldn't be reformed in ways that do not run so much against the grain of the Founders' constitutional understandings. And it doesn't mean that, as we work to envision what communications law and policy should look like in the digital age, that we should not have in mind certain underpinnings of our Constitution.

Here are some thoughts to get started:

· The Public Interest Standard: So much of the FCC's regulatory activity is carried out under the vague and indeterminate delegation of authority to the agency to act in the "public interest." Although the Supreme Court said in 1928, and has repeated often since, that delegations of authority to administrative agencies must contain an "intelligible principle," the Court nevertheless has refused to rule that the public interest standard violates the non-delegation doctrine and is not likely to do so any time soon. This does not mean that when Congress updates the Communications Act to account for the rise digital age competition and convergence – as it should do sooner rather than later – that Congress should not provide the FCC with more specific policy direction. Under the public interest standard, unelected agency officials simply have too much unbridled discretion. And, by delegating authority in vague terms, our elected legislators escape accountability for having to make tough public policy choices. This is not the accountability to the public that our "separation of powers" framework is intended to foster. Congress should replace directives for the FCC to act in the "public interest" with explicit directives, especially commands to the agency to take into account marketplace competition.

· The First Amendment: It is time to recognize that we live in an age of media abundance and, yes, despite decades-old rote incantations to the contrary, media diversity. Legacy regulations that restrict the speech rights of media purveyors, even media operators routinely demonized as "giant corporations," are inconsistent with our free speech values. There are many examples, but in this category would fall program content restrictions still applicable to broadcasters and the "must carry" rules that require cable operators to carry local television stations.

And the incessant push for net neutrality mandates - requirements that Internet providers carry all traffic without discrimination - amounts to nothing more than a "must carry" regime for ISPs. Absent evidence of a market failure that would justify converting, either formally or as a matter of practical effect, today's Internet providers into common carriers, net neutrality mandates raise serious First Amendment issues by compromising ISPs' free speech rights. Supporters of net neutrality who claim these government-enforced non-discrimination restrictions promote free speech values evidence a profound misunderstanding: The First Amendment is intended to protect against censorship by the government, not by private entities. More than two decades ago, Ronald Reagan's FCC got rid of the Fairness Doctrine that required broadcasters to "balance" their coverage of public issues. In the digital age, we don't need anything resembling a Fairness Doctrine for the Internet.

· Property Rights: In order to encourage investment and innovation, a reformed communications policy needs to demonstrate more sensitivity to property rights than does the current regime. Property rights – protected by the Constitution's Fifth Amendment – are implicated in many ways by FCC regulation, from the proposed net neutrality regulations which would, as a practical matter, require capacity set-asides and infrastructure build-outs for carrying traffic that ISPs might prefer not to carry, to the potential for confiscatory rate regulation in the guise of enforcing non-discrimination carriage mandates. And the various existing and proposed program "access" requirements applicable to cable operators, adopted, again, in the name of enforcing non-discrimination, surely implicate the property rights of those who invest in building and operating the platforms that, in effect, are turned into semi-public utilities.

Just witness the bizarre bazaar that is the Comcast-NBCU merger proceeding, as program "competitors" seek to use the leverage of the Commission acting under the indeterminate "public interest" standard to extract conditions that require the merged entity to treat all post-merger Comcast and non-Comcast programming in a perfectly equal fashion. And witness further the claims that multichannel video providers, who presumably bargain and pay market prices to create or acquire programs that they believe will be attractive to their subscribers, also should be required to make the programming they own available to everyone on the Internet on "fair" and "reasonable" terms – to be decided by the FCC. Some of this type of government-mandated access and rate-setting arguably was justified in the more monopolistic, bygone era – but not in today's rapidly changing, much more competitive digital environment. The efforts to carry on with, or even expand, the old "fairness" and "non-discrimination" and "reasonable access" rules shows a lack of respect for the property rights of the owners of content and of the platforms in which service providers invested to distribute such content.

As stated above, this is not intended to be an exhaustive or definitive exposition of the proposition that communications law and policy should be reformed in ways that conform more closely with important constitutional values, such as protection of free speech and property rights, and separation of powers principles. Rather, it is simply a part of our ongoing project at the Free State Foundation to pay close attention to the Constitution as we continue our work looking towards meaningful – yes, even "radical" in the sense that the transition from the analog to digital age is radical – reform of our nation's communications policies.

I sense that there is change afoot, fueled in no small measure by the rise of the Tea Parties and their attention to constitutional principles, which, after Tuesday's election, may make the prospects for meaningful communications policy reform more promising.

And here at FSF we'll keep working at it.