Rumblings from Boulder: Consensus and Next Steps in Telecom Reform

Published April 1, 2005

February’s Silicon-Flatiron’s conference on telecommunications reform underscored SF’s reputation as an intellectual focal point for understanding and rationalizing the burgeoning field of “information law”–an amalgam including communications law, intellectual property law, antitrust, and competitive policy. To those wearied by the “he said-she said” of most telecom debates within the Beltway, this event in Boulder has established itself as the thinking person’s policy conference.

Despite the wide range of strong opinions among participants, I came away from the conference believing a rough consensus emerged on several key issues. This rough consensus provides much-needed guidance on how those who favor a “light touch” for regulation and those who would tolerate a heavier hand can come together to address the myriad issues arising from the emergence of digital technologies.

The various presentations, reactions, and rebuttals confirmed that virtually all sides agree it is a worthy goal to maintain and promote the “openness” that currently enables producers of content, applications, services, and devices to offer those goodies to Internet users with few limitations other than available bandwidth. If the Internet is to remain an engine of competition and innovation, such freedom will be its essential fuel. Also, no one disputed that mandated access to broadband Internet connections for independent ISPs might be an inappropriate way to secure such freedom.

The Holistic Internet

Likewise, there was no obvious disagreement with Stanford law professor Lawrence Lessig’s contention that policymakers should see the value of the Internet holistically–its benefits derive from the interaction of its many components (infrastructure, software, content), rather than from any discrete part of the whole. The values identified in this holistic view ranged from economic efficiencies derived from integrated service the Internet makes possible to various social goals, including universal availability, public safety, and more responsive law enforcement. Speakers generally presumed these social goals would be pursued in some form or fashion even as communications regulation evolves.

That said, the speakers also seemed to share a recognition that rational reform of communications regulation must involve some analysis resembling the so-called “layered approach” to regulation, which attempts to assess the need for regulation by analyzing the characteristics of each modular component of the Internet separately.

Some speakers appeared justifiably hesitant to embrace the approach given MCI’s unfortunate appropriation of it to advocate regulation consistent with its business strategy. Technical experts emphasized there are limits. The layered approach’s value is more descriptive than prescriptive; at a minimum, the boundaries between Internet layers–to the extent they can be identified at all–are blurry and may vary dramatically among current uses and over time.

Yet all essentially conceded that, as specialized cable, telephone, and other networks morph into versatile competing broadband networks, similar capabilities should be regulated similarly, if at all. The decision as to whether and how a capability is regulated should turn largely on economic factors, such as if firms have the power to undermine competition in the provision of that capability.

Competition in the “Last Mile”

In addition, the speakers also generally agreed on the goal of increased competition among “last mile” providers of broadband Internet access, which are currently comprised primarily of cable modem and DSL providers. Speakers offered differing estimates as to how many providers are needed to eliminate the need for regulation, but all appeared to endorse the idea that promoting competition among networks would be the best way to ensure continued benefits for consumers.

But the agreement on the benefits of broadband competition drew attention to the one major disappointment in the symposium’s discussions: the reluctance to engage on the issue of how–in light of the goals of openness and a “layered” approach to regulatory reform–policymakers can simultaneously promote investment and innovation in competing broadband networks.

The reluctance of some speakers to talk about how to get networks built, however, does not excuse the reluctance among champions of network investment to concede there may be other, even competing, policy goals for the Internet. And certainly, nothing I say here should be viewed as detracting from the overall value of the conference discussions.

Indeed, the “disappointment” to which I refer is beneficial at least in suggesting some next steps in reshaping communications regulation to fit the digital age. Specifically, it suggests the advocates of openness and the “layered approach” should resolve to get their hands dirty with the knotty, practical concerns of fostering incentives for the private sector to accelerate investment in competing broadband networks. But it also suggests some of us network investment “hawks” should do more to embrace openness as a goal and to concede that the “layered approach” may hold some analytical value if its prescriptive limitations are respected.

Kyle Dixon ([email protected]) is senior fellow and director of the Federal Institute for Regulatory Law & Economics at the Progress & Freedom Foundation.