Tuesday, January 24, 2012

Mr. Genachowski, Tear Down That Potemkin Village

As Communications Daily reported in its January 19th edition, President Obama recently gave the FCC a "shout out" for supposedly cutting 190 regulations, citing the FCC's efforts as a prime example of regulatory reform under his Administration. The same Communications Daily item reported that Cass Sunstein, head of the Administration's Office of Information and Regulatory Affairs (OIRA), credited the FCC with eliminating the Fairness Doctrine and other regulations. 
Please! Hold the shout outs. 
Truth be told, the FCC's regulatory reform efforts thus far are more a Potemkin Village than anything else. 
First, the claim about eliminating the Fairness Doctrine. FCC Chairman Julius Genachowski has highlighted "purging the Fairness Doctrine from our books" as a regulatory reform achievement so many times it's become a bit old. Both Mr. Genachowski and Mr. Sunstein know better. 
In May 2011, FCC Commissioner Robert McDowell pointed out in a speech, no doubt to the surprise of most FCC cognoscenti, that the Fairness Doctrine was still codified in the Commission's rules. Shortly thereafter, in a June 6 letter, Chairman Genachowski wrote to Rep. Fred Upton, Chairman of the House Energy and Commerce Committee, stating that the Fairness Doctrine "has been a dead letter at the Commission for more than two decades." In the same letter, Mr. Genachowski said the FCC General Counsel had advised that the Fairness Doctrine is "unenforceable." 
Again, on August 22, 2011, Mr. Genachowski stated in a Commission release that striking the Fairness Doctrine "from our books ensures that there can be no mistake that what has long been a dead letter remains dead." 
There are many other statements to the same effect. 
I don't have a problem giving credit to Chairman Genachowski for striking the Fairness Doctrine rule from the FCC's books. But I do have a problem with using a rule that Mr. Genachowski admits is "unenforceable" and a "dead letter" -- indeed, a rule that has been a dead letter for a quarter of a century -- as an exemplar of regulatory reform. 
Enough already with burying long dead dead letters. 
As Communications Daily reported in a follow-on item on January 23, many of the other rules eliminated by the FCC fall into the category of Potemkin Village regulatory reform. Among those eliminated are the Broadcast Flag rule held unlawful years ago by the D.C. Circuit court, eight regulations relating to a no longer operative version of the Public Utility Holding Company Act of 1935, and thirteen relating to a no longer operative mechanism allowing a TV station to allege that a satellite operator unlawfully transmitted the television station's signal. 
Excising rules from the FCC's books that are no longer operative is not an unworthy exercise. But it is not real regulatory reform. And it should not be touted as such. 
Meanwhile, when presented with pleas to engage in meaningful reform, even of the modest variety, the Commission generally demurs. Even a casual review of the FCC's Public Notice, released on December 23, 2011, (the eve of Christmas Eve), shows how difficult it is to persuade the agency to reduce or eliminate outdated regulations. The Public Notice contains the recommendations from the Commission's various bureaus and offices regarding the biennial review of telecommunications regulations required by Section 11(a) of the Communications Act, added by the Telecommunications Act of 1996. This section requires the FCC to review every two years regulations that apply to any provider of telecommunications service to determine whether any such regulation "is no longer necessary in the public interest as the result of meaningful economic competition between providers of such [telecommunications] service." 
While the FCC staff recommended the Commission consider repealing a few regulations that no longer have any relevance in today's environment, such as Computer III CEI/ONA requirements, for the most part it demurred. And, with respect to various regulations relating to wireless providers, it declined to recommend the repeal or modification of any rules at all, despite the competitive marketplace in which wireless providers operate. And despite the fact that Section 11(b) of the Communications Act states that the Commission "shall" repeal or modify any regulation it determines not to be in the public interest. Not "may" repeal or modify. 
So, in the interest of fairness, it's time for Chairman Genachowski (and President Obama and Administrator Sunstein) to stop citing elimination of the Fairness Doctrine as an example of regulatory reform accomplishment. You can't keep killing and counting "unenforceable, dead letters" over and over again. 
It's time for the FCC to get serious about meaningful regulatory reform. There are plenty of existing regulations that no longer make sense in today's competitive marketplace environment, but which nevertheless impose significant economic burdens. They should be eliminated, or at least cut back. 
And there are others, which the Commission is proposing to adopt, even now, which it should not adopt. For example, the Commission should scuttle its proposed video navigation device design mandates, the proposed expansion of program carriage rules, any further actions regarding special access regulation, and the extension of network outage reporting requirements to Internet providers. 
A little over a month ago, I wrote an essay that ended this way: "Mr. Genachowski, build back that wall." There I urged resurrection of the policy, especially after adoption of net neutrality mandates, that digital broadband services should be walled off from regulation.
In a similar vein, and with all respect, my plea here is: "Mr. Genachowski, tear down that Potemkin Village."