A Good Spectrum Deal for Consumers

It's worth taking special note of the spectrum swap deal announced on Monday by T-Mobile and Verizon Wireless because it is a positive development. Here is an AP story on the deal that explains what each provider is getting and giving up. 

When the deal was announced, here is a statement I gave to the press:

"Foremost, the spectrum swap announcement by Verizon and T-Mobile is good for consumers because it should result in getting additional spectrum in use for 4G broadband services sooner rather than later. It paves the way for T-Mobile to become a stronger competitor, which is a positive for consumers. And it ought to mean the Commission acts with dispatch to approve the Verizon-SpectrumCo transaction." 

If the FCC approves the transaction, T-Mobile will be able to be a stronger competitor in the wireless broadband marketplace and this is good for consumers. 

And it is also good for consumers when marketplace participants are allowed to negotiate spectrum swaps in the secondary market without having the FCC dictate its own preferred market outcomes. 

With no one seriously disputing the looming spectrum crunch, for the sake of meeting the rapidly growing consumer demand for wireless broadband services, the FCC needs to make it a priority to approve promptly both the Verizon Wireless-SpectrumCo and T-Mobile-Verizon Wireless spectrum transactions.

More Reforms Needed to Relieve Maryland's Pension Liability Problems

The Pew Center On States' June 2012 Issue Brief, "
Widening the Gap Update" spotlights the problem of states' unfunded liabilities for public sector pensions and retiree health care. According to the Issue Brief:

In fiscal year 2010, the gap between states' assets and their obligations for public sector retirement benefits was $1.38 trillion, up nearly 9 percent from fiscal year 2009. Of that figure, $757 billion was for pension promises, and $627 billion was for retiree health care. 

Count Maryland among the many states whose irresponsibility in state budgeting practices puts them into pension liability predicaments. The Pew Center's
Fact Sheet on Maryland points out that Maryland has failed to pay in full its annual pension contributions since 2005. As of fiscal year 2010, Maryland's pension deficit was $20 billion, and the state had only funded 1 percent of its $16 billion obligation for retiree health care.

Also count Maryland among those states that have recently undertaken a number of reforms to shore up their pension and health care funding shortfalls. As the Fact Sheet explains:

Maryland lawmakers approved pension cuts in 2011, including increasing contributions from current and future employees and reducing annual cost-of-living increases for retirees. Lawmakers also reduced retiree health care benefits by requiring higher co-payments for prescription drugs.

But like many other states, Maryland has more reforming work to do. As the Issue Brief puts it, "continued fiscal discipline and additional reforms will be needed to put states back on a firm footing."

Next steps for Maryland to shore up its unfunded obligations should include:

• Adjusting its annual return on investment assumptions. Maryland's pension system assumes a rosy 7.75 percent annual return on investment. True, investments enjoyed high returns over the last two fiscal years. But with stocks tumbling in 2008 and 2009, that same investment return assumption is responsible for significant funding shortfalls. A May 27 New York Times article, for instance, cites a National Association of State Retirement Administrators' finding of an average 5.7 percent return for state pensions over the last ten years.
• Increasing and meeting its annual pension contribution amount. As explained in a June 20 MarylandReporter.com article, Maryland continues to rely on the "corridor methodology" as a means of avoiding full pension funding for each year. Under this method, the state can make annual pension contributions equal to the prior year's contributions plus 20% of the difference between the prior year's contributions and what it otherwise would have had to contribute in the current year. By eliminating the corridor method and increasing its annual payments, Maryland should meet its obligations in full, every year.
• Transitioning to a defined contribution or hybrid plan. As we've explained in prior blog posts, Maryland should transition future employees from a defined benefit pension (where benefits are determined by a set formula) to a defined contribution pension (where benefits are determined by investment returns). The Issue Brief points out that thirteen states have hybrid plans, with neighboring Virginia adopting a hybrid plan in 2012. Such plans combine features of defined benefit and defined contribution plans. A transition to a defined contribution or hybrid plan would more closely tie benefits to market performance, reducing the state's obligation to provide additional pension funding when markets experience economic downturn.

Further delay by Maryland in reforming its pension system will make it that much harder to achieve fiscal responsibility. 

Blair Levin's Big Bandwidth Vision

I want to commend to you a recent speech by my long-time friend Blair Levin, the former head of the FCC's National Broadband Plan task force and now the head of a project (of which he is the prime mover) called Gig.U. At the time of Gig.U's launch in August 2011, I said in a blog post: "All in all, it looks like a very worthwhile venture, one that, if successful, could bring many benefits, not only to the university communities involved but to the nation at large." 

Blair's speech has a mouthful of a title, "Upgrading America: Achieving a Strategic Bandwidth Advantage and a Psychology of Bandwidth Abundance to Drive High-Performance Knowledge Exchange." A big title – but a speech with a big idea, consistent with the large ambition of the Gig.U project. 

At the outset of the speech, Blair states: "What I want to do today, however, is to argue that over the next few years, the prime mission of communications policy ought to be to eliminate bandwidth as a constraint on innovation and productivity." In the remainder of the address, he does an admirable job of arguing that bringing "hubs of huge bandwidth" to places – like university and research communities – where such "excessive bandwidth" will be utilized in ways that optimize productivity and creativity for all, is an important goal. 

While I may not agree with every aspect of Blair's address, I do readily commend the vision he articulates and the seriousness of thought – and the passion – that he brings to the subject. 

Blair acknowledges forthrightly that the purpose of the speech is not to catalog policies, but rather "to sell the primacy of the mission." That's fair enough. 

But, of course, the policies ultimately matter. Towards the very end of the speech, Blair says: "We can, like Korea, mandate spending billions to upgrade everywhere to drive more effective use of the network, or we can upgrade in those places we know we have, and are likely to do so in the future, create the kinds of improvements that scale everywhere and create new market forces that incent the private sector to invest in a broader upgrade." 

In my view, reliance on market forces will provide the incentives for the private sector to get most of the way, if not all of the way, towards building out the infrastructure that is necessary to achieve of Blair's big bandwidth vision. Government possibly may have a test-bed-like role to play, but, if so, that role should be carefully defined and limited. Reliance on market forces, not government strictures, are much more likely to provide for the flexibility and responsiveness upon which creativity and innovation rest. 

So, the policy discussion is always relevant, and it matters. But, for now, it is enough to commend to you Blair's speech as he goes about trying "to sell the primacy of the mission." It's well worth reading, and thinking about.

The FCC: "The More Things Change...."

You're familiar with the old saying, "The more things change, the more they stay the same." 

For me, the quip calls to mind the Federal Communications Commission. Despite the competitive developments that have occurred in the communications marketplace since passage of the Telecommunications Act of 1996, the FCC is essentially the same size and regulates much in the same way as it did in 1996. 

This shouldn't be the case. 

Congress declared in the 1996 Telecom Act's preamble its intent "to promote competition and reduce regulation." The primary legislative report stated the law was intended to create a "deregulatory national framework." Normally, the development of competition replaces the need for regulation, which, concomitantly, reduces the need for as many regulatory personnel. This is a general proposition to which almost all subscribe. 

Except it hasn't ever worked that way at the FCC. And even now, despite the fact that market segments regulated by the agency are becoming ever more competitive, there are no signs – absent congressional intervention – that it will work that way. 

In fact, over the course of the 15-year period since the 1996 Act's adoption, the FCC's staffing level (as measured by full-time equivalent staffers) has grown from 1755 (reported in the FCC's 1997 Annual Report) to 1917 now. Assuming that some of the increase in FTEs is attributable to additional staffing hired in connection with post-1996 Act implementation activities, in the last decade, despite the increase in competition in the markets subject to FCC regulation, the number of FCC FTEs has remained essentially steady. 

The chart below shows the number of FCC FTEs over the past decade.  

Fiscal Year	FCC FTEs	FTC FTEs
FY 2012	1,917 Projected	1,176 Estimated
FY 2011	1,917	1,155
FY2010	1,905	1,133
FY2009	1,820	1,106
FY2008	1,775	1,093
FY2007	1,793	1,059
FY2006	1,816	1,005
FY2005	1,899	1,019
FY2004	2,015	1,057
FY2003	1,995	1,051
FY2002	1,975	1,054

FCC Source: Fiscal Year 2012 Budget Estimates Submitted to Congress

2011/2012: http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-304636A1.pdf

Prior Years’ Sources: FCC Performance Budgets, http://www.fcc.gov/omd/strategicplan/

FTC Source:  Fiscal Year 2013Congressional Budget Justification, page 36

http://www.ftc.gov/ftc/oed/fmo/2013_CBJ.pdf 

In addition to showing the number of FCC FTEs from 2002 - 2012, the chart also shows the number of Federal Trade Commission FTEs for the same period. It is interesting – and instructive as well – that the FTC, with its dual consumer protection and competition regulatory responsibilities cutting across all U.S. markets, operates with only 1176 FTEs. The FTC generally is regarded as a well-managed and effective agency. 

Moreover, the FCC's budget has increased substantially over the past decade. According to the respected joint study of the Weidenbaum Center, Washington University, and the Regulatory Studies Center, George Washington University, since FY 2000, the amount spent by the FCC on regulatory activity has increased from $269 million to $446 million. These amounts are the budgetary "outlays" attributable to the agency's regulatory activities, gross of regulatory fees collected. This data is derived directly from the annual Budget of the United States. The Weidenbaum/RSC report may be found here and the above figures may be found in Table A-1. 

Again, the increased agency spending on regulatory activity throughout the past decade occurred as competition continued to increase in market segments subject to FCC regulation. 

Small wonder then that, in recently reducing the FCC's appropriation mark for FY 2103 by $17 million less than the Commission has requested, the House Committee on Appropriations determined, "the current organizational and management structure of the Commission does not reflect the convergence in today’s telecommunications market." Significantly, the committee concluded "[t]he increase in market-based competition should result in a smaller Commission with fewer staff." And it directed the Commission "to submit a review of the current FCC organizational structure as well as a proposal for improvement that reflects today’s technology landscape and competitive marketplace." 

As I stated at the outset, it is widely accepted that increased competition should lead to reduced regulation, which, in turn, should lead to a reduced number of staff and a reduced regulatory budget. I am not suggesting, and I do not suppose the House Appropriations Committee is suggesting, that there should have been a straight-line reduction, or a reduction in every year. But, over time, as competition increases and replaces the need for regulation, there should be a meaningful reduction in the agency's staffing level and the size of its regulatory budget. 

I am confident this is what Congress anticipated when it declared the 1996 Telecom Act was intended to "promote competition and reduce regulation." 

And I assume then-FCC Chairman William Kennard had in mind much the same when he released a strategic plan for the FCC in 1999 that began with this very statement: “In five years, we expect U.S. communications markets to be characterized predominately by vigorous competition that will greatly reduce the need for direct regulation." 

James Byrnes once said: "The nearest approach to immortality on earth is a government bureau." As someone who served in all three branches of government as a member of the U.S. House of Representatives and the Senate, governor of South Carolina, Secretary of State, and the Supreme Court, Mr. Byrnes knew something about the ways of government agencies and bureaucratic imperatives. 

Mr. Byrnes need not worry. I am not suggesting the FCC should die, or that it should be crippled. There is still important work for it to do. 

But, as the House committee report suggests, the Commission does need to reform itself institutionally in a meaningful way that reflects the marketplace changes that have occurred since 1996. This would require the agency to prioritize its activities to reflect today's realities, so, for example, it would devote resources to repurposing spectrum in a timely fashion, rather than to considering re-regulating services, such as special access, which were deregulated a decade ago.  

There simply is no reason for the FCC to go merrily along in the cause of proving that, "The more things change, the more they stay the same."

Don't Let W-C-I-T Become W-I-C-K-E-D

In anticipation of the upcoming World Conference on International Telecommunications ("WCIT") in Dubai this December, the House Energy and Commerce Committee today approved by voice vote a resolution to “preserve and advance the multistakeholder governance model under which the Internet has thrived." The WCIT conference is conducted under the auspices of the UN's International Telecommunications Union. The House of Representatives is expected to consider the resolution, H. Con. Res. 127, in fairly short order. 

Introduced by Rep. Mary Bono Mack of California, the resolution states that the U.S. Government "should continue working to implement the position of the United States on Internet governance that clearly articulates the consistent and unequivocal policy of the United States to promote a global Internet free from government control and preserve and advance the successful multistakeholder model that governs the Internet today." 

The vote commendably was entirely bipartisan, with the leaders of both parties speaking in favor of the resolution in the Commerce Committee. 

It is very important for the future of the Internet and its multistakeholder governance model that the U.S. continues to fight hard at the WCIT conference and beyond for the position stated the resolution. 

And it bears pointing out that if the U.S. truly is going to be effective in asserting leadership in this area on a long-term basis – because the threats to the Net will not likely end with the WCIT conference – the U.S. government must lead by its own example. Thus, when the concern is to maintain the Internet "free from government control," the U.S. government must be mindful of its own actions. For instance, the FCC's adoption of net neutrality mandates and data roaming regulations are problematic in this respect in that each action asserts government control over aspects of Internet services. 

Perhaps one salutary byproduct from the bipartisan effort to ensure the U.S. leads the fight abroad to keep the Internet free from government control will be to make the FCC more aware than it heretofore has been that it should refrain from taking actions that denigrate the same freedom from control here at home. 

This is an issue that ought to engage all U.S. citizens. If you want to learn more, please watch the C-SPAN video of the Free State Foundation's May 30 seminar at the National Press Club. The program features an outstanding panel including, FCC Commissioner Robert McDowell and Richard Beaird, the U. S. State Department's Senior Deputy Coordinator for International Communications and Information Policy. 

And my recent blog, "Free Speech on the Internet, Except in Cases…" explains how some of the proposals put forward for consideration at the WCIT conference would directly threaten the free speech that today largely characterizes the Internet. 

Another venue for keeping up with developments is the newly-established WCITLEAKS.ORG site. 

Stay tuned for more on this as preparations continue for the WCIT conference.   

Supreme Court Lets Technology-Neutral Speech Decision Stand

On June 18, the U.S. Supreme Court denied review in the case of Nelson v. Time Warner Cable. This leaves standing an important decision by the U.S. Court of Appeals for the 5th Circuit, Time Warner Cable v. Hudson (2012). 

Earlier this year, the 5th Circuit struck down provisions in Texas's statewide video franchising law that subjected certain cable providers to extra regulatory burdens from which new entrant competitors remained free. Significantly, Hudson's reasoning rested on First Amendment grounds.

In my February FSF Perspectives paper, "The First Amendment for the Digital Age: A Case for Treating Modern Technologies Equally," I discuss aspects of Hudson and its implications for the future of First Amendment jurisprudence:

[T]he Fifth Circuit took seriously the idea that free speech protections belong to cable video service providers, just like other speakers. Even more significantly, it made clear that the First Amendment prohibits government regulations that selectively impose burdens on certain competing video service providers, but not others. In fact, the Fifth Circuit's decision appears to be part of a growing trend in which federal courts are no longer willing to approve departures from equal application of free speech protections, regardless of the underlying technology at issue. Time Warner Cable v. Hudson also offers a window into the future of free speech jurisprudence for modern technologies – or at least it should. In particular, the case hopefully will be a precedent that will inform a reinvigorated and principled First Amendment jurisprudence for the digital age – a jurisprudence that treats with equal respect the speech rights of all speakers using all technologies.

Perhaps the Supreme Court's imminent decision in Fox v. FCC II – also discussed in a blog post at the beginning of the Court's term – will offer further developments of First Amendment doctrine regarding speech rights relying on different media technologies.

If Communications Policy Were A Campaign Issue

It is not likely that communications policy reform will be a hot campaign issue during this election cycle. After all, spurring job creation and investment, growing the economy, increasing productivity, and reducing the nation's debt and deficit are likely to be the "macro" topics that dominate the campaigns – and well they should be. 

You probably won't find the candidates, whether President Obama or Mitt Romney, or candidates for Senate and House seats, arguing about how to address the spectrum crunch, or implement reform of the universal service fund, or eliminate outdated video rules, or resolve the decade-old "special access" proceeding. 

I get this. I am not suggesting that these often seemingly esoteric communications policy issues should become standard run-of-the-mill campaign fodder. 

But I do want to suggest that, with the communications, information, and entertainment market sectors comprising fully one-sixth of the nation's economy, communications policy matters. More pointedly, the right communications policies can spur job creation and investment, help grow the economy, and increase productivity. The wrong policies can have the opposite effect. 

What I want to do here is just offer some reformist positions – you might even say "talking points" – that would be worthy of consideration and debate if candidates were trying to integrate communications policy reform into a broader discussion concerning an overall program for spurring economic growth and new investment. Even if they are not campaign issues, these proposals should be on the table for consideration as policymakers contemplate communications policy reform. 

In my view, each of these proposals, if adopted, would be a net positive for the economy, certainly on a long-term basis, even if not necessarily on a "next quarter" basis.

1.    Congress should adopt a new Digital Age Communications Act which eliminates the current regulatory "stovepipes" grounded in no longer relevant techno-functional characteristics, and the new statute should replace the public interest standard with an antitrust-like competition standard that places consumer welfare, not competitor welfare, at the forefront.

Rationale: We need a new communications law that does not regulate services differentially based on the technologies employed and which requires a convincing showing of market failure and consumer harm before regulating. The Digital Age Communications Act introduced in the Senate in December 2005 by Sen. Jim DeMint remains a good model for a market-oriented statutory framework that would reduce unnecessary regulation.

2.    Eliminate the current dual review of communications mergers and acquisitions by the Department of Justice/Federal Trade Commission on the one hand, and the FCC on the other, so that the antitrust authorities assess the competitive impacts of the transactions, and the FCC assesses whether, if the transaction is approved, the parties will be in compliance with all existing laws and regulations.

Rationale: Now, in an era of large budget deficits, there is substantial overlap in the work done by the antitrust authorities and the FCC, with the duplication leading to unnecessary expenditure of substantial government and private sector resources and delays in the review process. And FCC transaction reviews under the vague public interest standard invite arbitrary and unpredictable agency decisionmaking, along with the now standard bargaining over so-called "voluntary" concessions that epitomizes "regulation by condition." I first wrote about this in 2000 in a piece titled, "Any Volunteers?" The current process discourages companies from engaging in transactions that may increase efficiency and productivity.

3.    Develop a national policy framework that makes it more difficult for localities and states to slow down the build-out of wireless infrastructure necessary to accommodate surging consumer demand.

Rationale: There are various measures that must be taken to address the spectrum crunch, such as allowing the secondary spectrum market to function more freely. But one helpful measure would be the development of some form of national policy that has the effect of accelerating local and state processes for siting towers and issuing permits for new infrastructure build-outs. Capital investment would flow more quickly than at present.

4.    Accelerate meaningful reform of the universal service subsidy regime and transition, over time, to a more limited program primarily directed to providing subsidy support to eligible low-income persons, not to high-cost communications providers.

Rationale: Until the FCC's high-cost universal service subsidy fund is further reformed, and as the FCC gets bogged down in interminable proceedings developing new "high cost" models and considering waivers from its newly adopted rules, wasteful disbursements of subsidies supporting inefficient telephone providers will continue. This discourages investment in new, more efficient telecom network infrastructure. Absent further reform and resolve, the USF subsidy program is a "telecom Solyndra" waiting to happen. Consider this example: In a recent meeting between the Secretary of Agriculture and the Administrator of the Rural Utilities Service and the FCC Chairman, the Secretary suggested the standard for relief from a reduction of subsidies to rural telephone companies "should be tied to a default on an obligation to government, not to loss of voice service." In other words, regardless of whether continued subsidies are necessary to fulfill their intended purpose of making available communications services, subsidies should continue to flow to keep government loans from going bad. This ill-conceived Solyndra-like policy would be bad for consumers who must pay for the subsidies through USF surcharges on their telephone bills, and who, by the way, are taxpayers too.

5.    Eliminate outdated legacy video regulations, such as must-carry, leased access, program access, program carriage mandates, and media ownership restrictions.

Rationale: These various regulations were put in place in the analog-era during a time when the video marketplace still retained some monopoly characteristics. In today's digital broadband video marketplace, competition among various video providers using cable, satellite, fiber, telephone, wireless, and Internet platforms is fierce, so the regulations are no longer necessary. And with the government dictating categories of programming that must be carried and under what terms, and the amount of communications capacity that must be set-aside by providers for use by others, the regulations not only discourage investment, they offend free speech principles to boot. 

6.    Sunset all FCC rules every seven years, subject to retention if the agency makes a showing of a compelling justification for keeping the regulation.

Rationale: Historically, the FCC, often by its own admission, has been notably slow in eliminating regulations from its books that no longer serve any purpose. Now, even the Obama Administration, through its Executive Order, is urging agencies to engage in retrospective reviews to get rid of, or relax, outdated regulatory requirements. The periodic regulatory review provisions in the Telecom Act of 1996 did not accomplish the stated purpose of eliminating outdated regulations. With marketplace changes continuing at a rapid pace, driven by the development of new technologies, a large number of FCC regulations, however well-intentioned, become obsolete over time. Therefore, all agency regulations should "sunset" seven years after adoption, unless the FCC, after providing an opportunity for public notice and comment, finds there is a compelling justification for retaining the rule.

I know there are other good proposals that could be offered as well, and I certainly know that readers will not agree with all of these. 

So, as always, your reactions are welcome. 

Global Internet To Enter The Zettabyte Era

On May 30, Cisco released its annual "Visual Networking Index Forecast," projecting and analyzing global Internet growth and trends from 2011 to 2016. Cisco's Index provides a handy guide to understanding the basic landscape of the future global digital economy. Summarizing from its White Paper, Cisco's press release cites five factors in its forecasting that annual global IP traffic would reach 1.3 zettabytes by 2016, namely:

1. An increasing number of devices: The proliferation of tablets, mobile phones, and other smart devices as well as machine-to-machine (M2M) connections are driving up the demand for connectivity. By 2016, the forecast projects there will be nearly 18.9 billion network connections―almost 2.5 connections for each person on earth, ― compared with 10.3 billion in 2011
2. More Internet users: By 2016, there are expected to be 3.4 billion Internet users ― about 45 percent of the world's projected population according to United Nations estimates.
3. Faster broadband speeds: The average fixed broadband speed is expected to increase nearly fourfold, from 9 megabits per second (Mbps) in 2011 to 34 Mbps in 2016.
4. More video: By 2016, 1.2 million video minutes―the equivalent of 833 days (or over two years) ―would travel the Internet every second.
5. Wi-Fi growth: By 2016, over half of the world's Internet traffic is expected to come from Wi-Fi connections.

Also, regarding device connectivity to the Internet, the index forecasts that by 2016 "there will be nearly 18.9 billion network connections―almost 2.5 connections for each person on earth." And for mobile data and Internet traffic for North America, the Index forecasts that annual total traffic will grow from 119 petabytes in 2011 to over 1.9 exabytes (that is, 1,964 petabyes) in 2016. Additional information is also contained in Cisco's companion paper, "The Zettabyte Era."

Special Pleading for Special Access Is Especially Counter-Productive

There are other candidates, but if one is looking for an indictment of what is wrong with the FCC's approach to regulation, there is no need to look further than the agency's handling of "special access" services. 

Never heard of them? It is not surprising because these are not services used by ordinary residential consumers, but rather they are "private lines" or "dedicated lines" used primarily by large corporate users and other communications carriers. 

In the late 90s, the FCC largely got out of the business of regulating the rates for special access services provided by the incumbent local exchange carriers because the agency determined that, at least in many places, competition existed in this market segment. This was a somewhat hopeful sign that the Commission was prepared to relax its traditional regulatory grip as competitive market conditions developed. Unfortunately, ever since the Commission's deregulatory action, some users of special access services have been agitating for the Commission to reverse course and re-regulate. 

This special pleading regarding special access is especially counter-productive – and the FCC should reject it. 

Over the years – unfortunately, when you refer to FCC proceedings, more often than not you are talking about "over the years," not months – I have written much, often in considerable detail, about why the ongoing campaign to re-regulate special access is wrong-headed. I don't propose to do so again today. But here is a piece published in June 2007, and here is one published in February 2009. 

These two pieces are both still instructive. Indeed, the rationale for not re-regulating special access is now even more persuasive, especially as the communications marketplace has become ever more competitive and as our nation is trying so hard to stimulate new investment. 

AT&T's Bob Quinn makes these points, and others, nicely in a blog posted today. 

This is the only point I want to emphasize here, which I made back in 2007, and since: No one argues that special access is a natural monopoly. Competitors have been seizing, and continue to seize, opportunities to enter the "special access" market segment and build out new network facilities – even though they are clever enough not to market their competitive services under the "special access" moniker. Bob cites recent examples. 

But if the FCC were to reverse course and require the incumbent providers to reduce the rates for their special access services, the incentive for competitors to continue investing in the build-out of new facilities would be suppressed. 

Thus, perversely, through new regulation, would the FCC undermine the policy, which ought to be especially important now, of encouraging new investment.