Regardless of the outcome of tomorrow's presidential and
congressional elections, there is a widespread consensus that, given the marketplace
realities spurred by the digital revolution, our nation's communications laws
and policies are in need of serious reform. With respect to the matter of
communications policy reform, the question is not so much if, but when.
So, I am particularly pleased to announce the publication by
Carolina Academic Press of the Free State Foundation's latest book, Communications Law and Policy in the Digital
Age: The Next Five Years. (Ordering information is below!)
With the growing consensus for meaningful communications
reform, the book's release is especially timely. While the book contains much
in the way of describing the current state of affairs, certainly a necessary
predicate to understanding why law
and policy should be changed, its primary focus is forward-looking. In other
words, the emphasis is on how
communications policy should be changed in the next five years, and beyond.
I hope you will get the book and read it from cover to cover.
As a bit of an enticement, here is a brief preview of the book's chapters.
You'll note that they are authored by some of the nation's leading experts on
communications law and policy.
In the Introduction,
I set the stage by explaining why the marketplace and technological changes
that have occurred since the last major revision of the Communications Act in
1996 have rendered existing law and policy woefully outdated, if not obsolete.
In the more than fifteen years since passage of the Telecommunications Act of
1996, which was grafted onto the original Communications Act of 1934, we have
witnessed a switch from analog to digital services and equipment, from
narrowband to broadband network facilities, and, most importantly, from a
mostly monopolistic to a generally competitive marketplace environment. These
are fundamental changes that call for a very different communications law than
the present one.
In my view, the new communications law should get rid of the
current "stovepipe" regime in which regulatory activity is tied to
different service classifications grounded in now outmoded techno-functional
constructs, as well as the ubiquitous public interest standard that grants the
agency wide-ranging discretion as it goes about regulating. The replacement
regime should have at its core a competition-based, consumer welfare standard
grounded in antitrust-like jurisprudential principles.
Representative Marsha Blackburn's contribution, Why We Need a Free Market Approach for the
Communications and High-Tech Sectors, explains "why we must apply some
conservative, deregulatory principles to the communications, information
services, and high-tech market sectors." These principles, on which Rep.
Blackburn elaborates, are: (1) the government's default position must be
"do no harm"; (2) government needs to respect private markets; and
(3) regulations need to be streamlined to better reflect the competitive and
dynamic characteristics that define communications and technology markets.
In a chapter entitled Placing
Communications Law and Policy Under a Constitution of Liberty, FSF Research
Fellow Seth Cooper and I take Friedrich Hayek's path-breaking work, The Constitution of Liberty, and distill
from it a set of basic principles that, in our view, are relevant to
establishing consumer welfare-enhancing policies in today’s competitive,
technologically dynamic communications marketplace. Applying these Hayekian
principles to contemporary communications law and policy, we set forth a
communications reform agenda for the coming years – an agenda that promotes
free markets and the rule of law by respecting contracts and private property,
maintaining the primacy of markets for determining prices and the quantities of
goods produced, encouraging freedom to innovate free from unnecessary
regulatory restrictions, and constraining otherwise unbridled administrative
discretion.
Next is Christopher Yoo's chapter entitled Internet Policy Going Forward: Does One Size
Still Fit All? At the outset Professor Yoo makes clear he is going to
challenge the premise, which in significant part undergirds the FCC's Open Internet Order, that "the Internet's past success stemmed from the fact
that there has always been a single Internet that was open to everyone."
Not so, explains Professor Yoo, calling upon his acknowledged combination of
technical, economic, and regulatory expertise. He suggests the various
trade-offs that should be considered, say in loss of innovation and higher
costs borne by users, if the Open
Internet Order's "single
Internet" claim is enforced rigidly by policymakers.
James Speta's essay, Reconciling
Breadth and Depth in Digital Age Communications Policy, is a natural
follow-on to Professor Yoo's piece. Professor Speta cogently explains why
marketplace shifts attributable to new services and technologies coming to
market point to the need for an entirely new Communications Act. As he puts it,
the existing law "barely acknowledges the Internet and provides very
little direction on the regulation of mobile services – the two areas in which
communications services are moving most importantly." Professor Speta
recommends that Congress adopt a new Digital Age Communications Act (DACA)
along the lines of a model statute that he and I, along with many others,
helped draft back in 2005.
In his chapter, Restoring
a Minimal Regulatory Environment for a Healthy Wireless Future, Seth Cooper
focuses on the FCC's regulation of mobile services, and especially the agency's
more recent actions adopting a more activist regulatory posture relying on its
public interest authority. Mr. Cooper's chapter contains an up-to-date detailed
description of the wireless broadband marketplace that demonstrates its competitiveness
and dynamism. He explains how recent FCC actions have eroded the minimal
regulatory environment that existed before the Commission recently began
adopting a more interventionist posture. Finally, he explains what the FCC
needs to do by way of getting back on the right regulatory track.
Next, in Proposed FCC
Incentive Auctions: The Importance of Re-Optimizing Spectrum Use, Michelle
Connolly focuses on the upcoming incentive auctions to allow up to 120 MHz of
high-quality spectrum currently used by television broadcasters to be
reallocated to a more economically beneficial use. As Professor Connolly
states, "[i]n light of the economic and social benefits that accrue from
broadband availability and adoption, the public policy goal is to free up additional
spectrum that could be used to provide mobile broadband services."
Employing her expertise as an economist, along with the first-hand experience
gained from serving two stints as the FCC's Chief Economist, Professor Connolly
sets forth the theory of spectrum incentive auctions. And, perhaps more
importantly, she explains how, in practice, incentive auctions should be
designed to ensure their success in repurposing the maximum amount of spectrum
reclaimed from broadcasters, while protecting taxpayers' interest as well.
In his chapter, Reforming
the Universal Service Fund for the Digital Age, Daniel Lyons acknowledges
that in November 2011, the FCC took meaningful steps to begin reforming the USF
regime, including reorienting the fund's focus from ordinary telephone service
to broadband access. But he proposes a much bolder reform program than the
FCC's more modest reforms. Professor Lyons would target the distribution of
subsidies to low-income persons so the program's cornerstone would "be a
voucher program similar to a telecommunications version of the food stamp
program, or a phone-provided broadband phone card." And he would jettison
the current contribution methodology under which the USF subsidies are now
funded by a surcharge (17% at the time the book went to press) assessed on all
interstate calls. In its place, Professor Lyons suggests the "simplest and
most elegant solution to the contribution problem is simply to fund universal
service through a line of the federal budget like most other entitlement
programs."
Ellen Goodman's thoughtful chapter, Public Media Policy Reform and Digital Age Realities, explains why
the same market failure rationale that supported the public broadcasting system
created in the 1960s no longer fits comfortably in today's digital world and
why the country needs a redesigned public media regime that pursues innovation.
Professor Goodman would retain the decentralized structure of the legacy public
broadcasting system but build in more flexibility so that public media support
can take into account, and be responsive to, changing digital marketplace
realities. In the end, she concludes, "it seems inconceivable that
ambitious telecommunications policy reform should ignore the carbuncle of the
Public Broadcasting Act in its sweep through the calcified remnants of 20th
century regulation."
The book's final chapter is Bruce Owen's Communications Policy Reform, Interest
Groups, and Legislative Capture. In considerable detail, and based on long
observation of communications policy sausage-making, Professor Owen bluntly
explains how interest group politics, coupled with the FCC's subservient
relationship to its congressional overseers, subverts reform efforts. Despite
his portrayal of the difficulties of achieving reform in the face of the
political economy realities, Professor Owen does not foreclose the possibility
of success. He acknowledges that "it may be that the disconnect between
the existing communications policies and the current marketplace realities will
become so great, coupled with imperatives driven by the need for U.S. companies
to compete in the global economy, that conditions will become ripe for
implementation of meaningful reform." Indeed, in the end, Professor Owen
concludes, even a bit optimistically, that, with "continuing
education" as a spur, the "good news" is that the anti-reform
policy bias cannot continue indefinitely in an economy that faces global
competition, "and therefore it will not."
To play upon Professor Owen's words, the good news is that
there is truly a lot of "continuing education" jam-packed into the
Free State Foundation's newest book. I am confident that when our nation's
communications laws and policies are comprehensively reformed – as they
ultimately must be – many of the free market and rule of law ideas presented in
Communications Law and Policy in the
Digital Age: The Next Five Years will be at the core of the reform.
Getting from here to there – from policies still grounded in
an analog-era mindset to free market and rule of law-oriented policies
reflecting the competitive realties of the digital age – will not be easy or accomplished
without a struggle. But I am sure that Communications
Law and Policy in the Digital Age: The Next Five Years will advance the
cause of sound communications policy.
You may order the book from Amazon
here, from Barnes
& Noble here, or from Carolina
Academic Press here. If you order from CAP before December 31, 2012,
and use the special discount code MAYFSF12 you will save 20%!