There is almost certainly not a marketplace in the United
States today that is as dynamic and rapidly evolving as the communications and
information services sector. The reason for this, of course, is that the
transition from narrowband to broadband services, from analog to digital
technologies, and from monopolistic to competitive market structures, has been
well underway for over a decade now.
Despite the FCC's recently acquired reticence to pronounce
various market segments "competitive," the evidence nevertheless is
strong that the broadband, wireless, and video markets are effectively
competitive. It appears the agency's newfound reticence has more to do with
wanting to justify the preservation of its regulatory domain than with
performing fact-driven competitive market evaluations.
And, make no mistake, the FCC's specific regulatory actions
– indeed its overall regulatory posture – matters. No doubt consumers should be
protected from abusive practices in the face of demonstrable market failure.
But absent market failure, marketplace competition will protect consumers
better than the FCC's brand of regulation, which very often is unnecessarily
broad, overly anticipatory in reach, and unduly rigid in application.
Stated simply, when the FCC over-regulates and unnecessarily
intervenes in the marketplace, investment and innovation are dampened, market
structures and business models are frozen in place, competitive entry is
discouraged – all with the effect of impeding the completion of the transition
to all-IP networks for all.
This is not to say that the Commission, even in recent
years, has not taken some welcome deregulatory steps, such as beginning to
implement meaningful Universal Service Reform, allowing the partial expiration
of the ban on exclusive contracts for satellite
programming between any cable operator and any cable-affiliated programming
vendor in areas served by a cable operator, or forbearing from enforcing the
prohibition on mergers between cable operators and competitive local exchange
carriers.
When the Commission has taken
such market-oriented actions, I have been happy to applaud them and give the
agency, and Chairman Genachowski, due credit. But the reality is that they have
been the exception and not the norm.
The norm has been too much
regulation in an era of ever increasing competition. The adoption of new
Internet regulation in the form of net neutrality mandates is but one example,
albeit an important one. Another example is the deleterious practice of routinely
engaging in "regulation-by-condition" in the context of reviewing
proposed mergers.
To some (lesser) extent, and at
some (slower) pace, the digital revolution likely will continue to bring more
competition, more consumer choice, and more innovative products at lower prices,
even in the face of Commission over-regulation. But surely the extent and the
pace of the revolution matters. More investment and innovation, more
competition and consumer choice – all more quickly – is better for consumers
and for the country.
Here's the crux of the matter.
The FCC largely still operates as if it is in the grip of an analog-era regulatory
mindset in which the default presumption is the existence of static, monopolistic
markets. This analog-era mindset has an air of unreality about it.
Regardless of who wins the
coming election, this mindset should change in 2013. A digital-era mindset
would find ways to account for a presumption of dynamic, competitive markets. (No
reason why it can't change in the last months of 2012, of course.)
To that end, I hope you'll be
able to join us for this Thursday's (October 18) Free State Foundation luncheon
event at the National Press Club that begins at 11:45 AM. The program is
entitled, "Ideas for Communications
Law and Policy Reform in 2013." FCC
Commissioner Robert McDowell and I will lead off the session with what I'm
sure will be a lively, thought-provoking conversation. This will be followed by
a free-wheeling panel discussion by four of the nation's leading experts on
communications law and policy. Details concerning the program and a
registration link are in the sidebar to the right, and you must register to
attend because space is limited.
At the forum, we'll discuss both
process and substance reforms. Regarding the latter, we will address topics
such as reforming the forbearance relief process and the way the agency performs
competitive assessments, reforming the transaction review process, revising spectrum
policy to relieve the spectrum crunch, completing USF reform, and more. Of
course, with a growing sense that the Communications Act needs to be
substantially revised, we'll discuss policy reforms that can only be
accomplished by Congress.
Please tweet your ideas at: fsfOct18ideasforum. And keep the
discussion going on Twitter during and after the event.
Finally, I'll have more to say
about this in the near future, but you will be the first to know! The Free
State Foundation's latest book, "Communications
Law and Policy in the Digital Age: The Next Five Years," will be
in print and available in a week. In the book, some
of the nation’s most eminent scholars explain why communications law and policy should be changed in response to
the profound marketplace transitions taking place. And, as importantly, the
contributors explain how law and
policy should be changed. In addition to myself, the contributors, all
recognized experts on the subjects they address, are: Representative Marsha
Blackburn, Michelle Connolly, Seth Cooper, Ellen Goodman, Daniel Lyons, Bruce
Owen, James Speta, and Christopher Yoo.
While the book is available on
Amazon, Barnes & Noble, and at other outlets, Carolina Academic Press, the book's esteemed publisher, is now offering a 20%
discount for orders using the special discount code on this
CAP promotional flyer.
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