Wednesday, March 14, 2012

The Internet World: Will It Remain Free From Public Utility Regulation?

As you probably (hopefully!) already know, the theme for the Free State Foundation's upcoming Fourth Annual Telecom Policy Conference on March 20 is, "The Internet World: Will It Remain Free From Public Utility Regulation?" And the two panels will be discussing a topic central to this theme: "Convergence, Competition, and Consumer Choice: The Right Regulatory Approaches for the Digital Age Marketplace."

When I selected the conference theme the particular year that mostly stuck in my mind was 2002. Yes, 2002. That was the year the FCC, in the first of a series of deregulatory rulings, determined that broadband Internet services "should exist in a minimal regulatory environment that promotes investment and innovation in a competitive environment." At the same time, the Commission emphasized it would "avoid simply extending existing rules that were crafted to govern legacy services provided over legacy networks." The Commission defended its decisions establishing a minimal regulatory environment for broadband all the way up to the Supreme Court – and won, in the landmark 2005 Brand X decision.

The regime that the Michael Powell-led Commission in 2002 wanted to avoid applying to broadband Internet services was the legacy common carrier regime, or traditional public utility regulation, which has as its hallmark a prohibition against unreasonable discrimination and regulation of prices. As then-FCC Chairman Bill Kennard put it colorfully in 1999, he didn't want the FCC to “pick up this whole morass of regulation and dump it wholesale" on broadband. To do so, he said, “would not be good for America.”

So, back to this year's annual conference theme: "The Internet World: Will It Remain Free From Public Utility Regulation?" I understand, of course, there are differing perspectives. But in my view, it is certainly not at all settled that the Internet will remain free from public utility-type regulation. Consider the FCC's recently adopted net neutrality mandates, with the common carrier-like nondiscrimination obligation, at their very core. Or consider FCC proposals to extend further already suspect program carriage obligations and to adopt new regulations governing the functionality and features of set-top video navigation devices. Or rules to regulate the rates for data roaming for smartphones. Or requirements imposed in connection with the Comcast-NBC Universal transaction regulating the terms and conditions for access to Comcast-NBCU's proprietary programming by Internet video providers. And so forth and so on.

So, there is plenty of fodder for a lively and informative discussion at FSF's conference concerning Internet regulatory policy. And that is what I anticipate.

In thinking about the conference over the last several days, and especially the panel topic, "Convergence, Competition, and Consumer Choice," I found myself going back in my mind to Ithiel de Sola Pool's ground-breaking book, Technologies of Freedom, published in 1983. Not only did I find myself going back to it in my mind; I pulled it off the bookshelf.

If I could assign only one pre-conference reading assignment, it would be de Sola Pool's prescient book. (Don't worry! I understand I can't hand out reading assignments.)

Keep in mind that Technologies of Freedom was written almost three decades ago. But already there was emerging what de Sola Pool – and others -- saw as a increasing diversity of communications and media outlets resulting from new electronic technologies. In other words, he saw increasing "convergence, competition, and consumer choice."

What makes Technologies of Freedom so powerful – and relevant today – is that de Sola Pool recognized it was entirely possible, even with more competition and more consumer choice, for the government, rather than deregulating and according free speech protection to the new communications technologies, to take the opposite course: Regulate all the media with legacy common carrier-like, speech-restrictive regimes.

Assuming you can't read the entire book, here are a few excerpts, especially relevant to the conference theme, that are well worth considering:

"The electronic modes of twentieth century communication, whether they be carriers or broadcasters, have lost a large part of the eighteenth and nineteenth century constitutional protections of no prior restraint, no licenses, no special taxes, no regulations, and no laws."

* * *

"The FCC claims the right to control which broadcast stations a cablecaster must carry...Telephone bills are taxed. A public network interconnecting computers must be licensed and, according to present interpretations of the 1934 Communications Act may be denied a license if the government does not believe that it serves 'the public convenience, interest, or necessity.'"

* * *

"The mystery is how the clear intent of the Constitution, so well and strictly enforced in the domain of print, has been neglected in the electronic revolution. The answer lies partly in changes in the prevailing concerns and historical circumstances from the time of the founding fathers to the world of today; but it lies at least as much in the failure of Congress and the courts to understand the character of new technologies."

* * *
"Historically, the various media that are now converging have been differently organized and differently treated under the law. The outcome to be feared is that communications in the future may be unnecessarily regulated under the unfree tradition that has been applied so far to the electronic media. The clash between the print, common carrier, and broadcast models is likely to a vehement communications policy issue in the next decades."

Just so. Although de Sola Pool was writing even before the rise of the Internet, he was surely prescient in his worry that "[t]he outcome to be feared is that communications in the future may be unnecessarily regulated under the unfree tradition that has been applied so far to the electronic media." And he was correct in predicting, at the time he wrote in the early 1980s, that the clash between the free and the unfree models was likely to be with us for decades to come.

The clash is surely still with us in 2012. And that is why I think this year's annual telecom policy conference will be so important in elucidating the issues. I am very proud of our entire line-up of outstanding speakers, including our keynoters, the Wall Street Journal's Steve Moore, FCC Commissioner Mignon Clyburn, and White House Deputy CTO for Internet Policy Danny Weitzner. I am confident the program sessions will be educational and informative, as well as lively and entertaining.

I have my own opinions, of course. Like de Sola Pool, I think the "outcome to be feared is that communications in the future may be unnecessarily regulated under the unfree tradition." But I am always excited about hearing differing perspectives, learning more, and questioning conventional wisdom. I know you are as well, and that's why I hope to see you at next Tuesday's conference at the National Press Club.

The conference agenda is here. In order to attend, you must register by rsvp-ing to Kathee Baker at:

PS – There will be plenty of food for thought. But, in addition, for those who have registered in advance, we will be serving a complimentary continental breakfast and lunch.