Sunday, February 06, 2011

Regulatory Principles and Policy Priorities 2.0

I was honored that FCC Commissioner Meredith Baker gave her maiden speech as a commissioner at a Free State Foundation conference in September 2009 celebrating the publication of FSF's New Directions in Communications Policy book. And I was especially honored that Commissioner Baker agreed to deliver the opening keynote address last week at the Free State Foundation's Third Annual Winter Telecom Policy Conference at the National Press Club.

Her address, "Regulatory Principles and Policy Priorities 2.0," is here, and you may view it on C-SPAN, where it was broadcast live, here.

I hope you will read or view Commissioner Baker's speech in its entirety. Here I want only to highlight briefly some excerpts, because, to my mind, they are particularly pertinent to the way the FCC ought to go about its business.

Initially, Commissioner Baker set forth four guiding regulatory principles for the agency. A salient point from each one:

  • "More judicious self-selection of the issues and proceedings we tackle would help us become a more predictable agency that fosters greater legal certainty."
  • "[I]n those areas where the Commission has affirmative authority, we should act only where there is a factual record demonstrating conclusively that there is a market failure necessitating government action…Absent a genuine evidentiary record of a need to act, we must resist the urge to reward the loudest and most persistent advocates for action. We should also avoid regulating to respond to a handful of isolated incidents."
  • "Each new technological development or commercial dispute should not be viewed as an opportunity to investigate, regulate or bless. In the dynamic space in which we regulate, the risk of market-shaping action or picking winners and losers by regulation is too high."
  • “[R]obust, market-based competition provides the best results for consumers."

How much closer to the "model agency for the digital age" of which FCC Chairman William Kennard spoke in 1999 would the FCC be today if only the commissioners adhered to these principles?

Two other points of note.

Commissioner Baker pointed out that, before the Net Neutrality order has even been published in the Federal Register, "[p]arties are pushing to expand the scope of that decision into new markets and to erode the roadblocks built into the Chairman’s approach for wireless, prioritization, and managed services." Here think of Level 3 trying to turn what heretofore has been treated as an ordinary Internet peering dispute settled routinely through commercial negotiation into a complaint sounding in "net neutrality." And Free Press trying to do the same with respect to wireless provider MetroPCS's new offerings of various tiered services with certain pre-specified limitations dictated by existing legacy technological constraints. In fact, the MetroPCS offerings actually expand options for its customers.

Commissioner Baker admonished that "[w]e can’t let our debate within the FCC be hijacked by Net Neutrality for another year." Putting aside the question whether Congress or the courts will overturn the FCC's net neutrality rules, Commissioner Baker is surely right that, unless and until the rules are overturned, the Commission will be making a huge mistake if the agency doesn't make clear early on that they will not be interpreted in an expansive fashion that only has the effect of inviting a flood of frivolous complaints.

Finally, Commissioner Baker said: "For universal service and intercarrier compensation, the old ways will not do. We must resist the urge to shoehorn broadband into a broken system, and our IP future into our POTS past." In the coming weeks we will have much more to say about the substance of the Commission's handling of the universal service and intercarrier compensation issues. For now it is enough to observe that the Commission's unduly prolonged failure to reform these outdated, highly inefficient subsidy regimes over the last decade is nothing short of a demonstrable institutional failure.

On this last score, if the FCC is to meet its institutional responsibilities in the dynamic and competitive digital age marketplace environment, it would do well to heed Commissioner Baker's "regulatory principles and policy priorities."