I expect the Federal Communications Commission under new
Chairman Ajit Pai to do well by getting the agency to do less. But before the
agency can do less, in one sense it has to do more. That is, more in the way of
curtailing existing regulations that either shouldn’t have been adopted in the
first place or that are no longer necessary or cost-justified.
At his address
at the Free State Foundation’s Tenth Annual Gala Conference on December 7,
2016, Chairman Pai made his deregulatory intent clear, stating that, “[i][n the
months to come, we also need to remove outdated and unnecessary regulations.”
Perhaps with only a bit of hyperbole, he declared:
“We need to fire up the weed whacker and remove those rules that are holding
back investment, innovation, and job creation.” I’m pleased that he added
immediately thereafter: “Free State and others have already identified many
that should go.”
Chairman Pai is off to a good start. He’s pulled from
current consideration two significant draft orders prepared under former
Chairman Tom Wheeler’s direction. One would have imposed ill-conceived, costly
regulatory mandates on TV set-top boxes at a time when the video marketplace is
undergoing rapid change in the direction of increased consumer choice and
competition. And, in the process, the proposed regulation would have undermined
the ability of content creators to protect their copyrights and their contractual
interests in video programs.
The other draft order would have re-regulated the rates – in
effect, forced them lower – for business broadband services offered by the
former “telephone” companies. This would have come at a time when new entrants like
former “cable” companies increasingly are gaining a competitive foothold. In
other words, the Wheeler proposal would have made it more difficult for new
facilities-based (emphasis on facilities-based!) entrants like cable operators to
compete, hindering the development of a more competitive market.
Chairman Pai also withdrew a draft “Section 706” report
prepared under Mr. Wheeler’s direction. Under Chairman Wheeler, these broadband
deployment status reports regularly had been used as a means to the end of
justifying more broadband regulation. No matter how speedy the pace of
deployment, or the increase in available bandwidth, the Wheeler Commission
refused to determine that deployment is occurring, in the words of the statute,
“in a reasonable and timely fashion.” The goalposts kept moving – so that the Commission
somehow could avoid finding broadband deployment reasonable. I suspect that under
Chairman Pai the Section 706 reports will be grounded in marketplace realities rather
than in preconceived notions.
* *
*
Now, all that said, I want to suggest this important point regarding
regulation and regulatory agendas at the FCC. It would be a mistake, and naïve,
to assume, as some are suggesting, that there won’t any longer be partisan splits
on votes on major items under a Pai Commission. I expect there will be – and
there is nothing inherently wrong with this to the extent that commissioners’
votes are grounded in differing philosophical principles or perspectives. After
all, there are real differences in philosophical perspective between the
parties with which the commissioners identify regarding the proper role of
government regulation.
It is blinking reality to suggest communications policy is
somehow immune, or should be, from application of different regulatory
perspectives that, at least at times, are rooted in different partisan
affiliations. Especially with regard to formulating communications policies, consistent
with congressional delegations of authority, that are dependent on criteria such
as the extent of existing and potential competition, the rate of technological
change, the forecast evolution of consumer demands, and so forth, there are no
ironclad Newtonian laws that govern, no E=MC2. Many times the
“right” answer in evaluating competition or competitive impact, for example, won’t
be found in some mathematical equation, not even a Herfindahl-Hirschman Index.
The FCC is established as a bipartisan agency, not a
nonpartisan one. Unlike the Federal Election Commission, for example, which by
law must be composed of an equal number of Democrats and Republicans, the
five-member FCC may have no more than three members from the same party. And
the President designates the FCC chairman, so, as former President Obama
famously reminded us early in his first term, elections have consequences.
There is no reason not to acknowledge forthrightly that Ajit Pai and Michael
O’Rielly adhere to a more deregulatory perspective than the more pro-regulatory
one of, say, Tom Wheeler, Mignon Clyburn, and Jessica Rosenworcel.
Now, I do not mean to suggest for a moment that efforts should
not be made at the FCC to minimize partisan differences, especially on contentious
items. I expect that Chairman Pai will make such efforts to seek compromises
where possible. Just engaging in such efforts often can lead to sounder
decisions. After all, a multimember commission like the FCC is grounded, at
least in part, in the idea that good-faith collaborative discussions among
commissioners with a genuine receptivity to considering opposing viewpoints
will produce better decisions, even if not unanimity.
* *
*
Finally, in acknowledging the legitimate role that differing
philosophical perspectives necessarily play in the realm of formulating
communications law and policy, I don’t mean to suggest – and don’t want to be
misunderstood as suggesting – that in reaching particular decisions, whether in
the context of adjudications or rulemakings, careful consideration of actual
record evidence is not of utmost importance. Of course, it is. And any FCC
commissioner who fails to accord a proceeding’s evidence proper consideration is
derelict.
But it serves no useful purpose to deny that when
decision-time comes, the conclusions to be drawn from the evidentiary record may
differ. Again, particularly when it comes to matters based on judgments
regarding the extent of existing market competition and future prospects, or
predictions concerning the rapidity of technological advances, or of
prospective consumer benefits or harms, there are no mathematical formulas to
apply.
It is in this context, and especially, say, when the
evidence is roughly in equipoise, or seems to be – or as the economists say, “well,
on the one hand this, but on the other that” – that it is perfectly proper for
a commissioner with a deregulatory orientation, as a matter of philosophical principle,
to resort to a default presumption in favor of not imposing a regulatory
mandate. In other words, as I have recently proposed,
in the absence of clear and convincing evidence to the contrary, and within the
confines of the Communications Act, in today’s Digital Age marketplace
environment in which competition and consumer choice have become increasingly
ubiquitous, employing a deregulatory presumption is entirely proper.
In sum, Chairman Pai’s regulatory “weed whacker” surely has
its uses. Otherwise, as he put it in his Free
State Foundation address, unnecessary regulations will hold back
“investment, innovation, and job creation.”
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