Stevens-Inouye: Another Round of Mother May I?

Published June 1, 2006

On May 1 the Senate Commerce, Science and Transportation Committee released its eagerly awaited “staff working draft” aimed at reforming the Communications Act of 1934 and Telecommunications Act of 1996.

It’s tough to know where to begin evaluating this 135-page monster, the “Communications, Consumer’s Choice, and Broadband Deployment Act of 2006.” In true, everything-and-the-kitchen-sink fashion, the measure tries to say a little bit about just about every aspect of modern communications and media law–and a heck of a lot more about other issues not even found in the ’34 and ’96 acts.

For example, the first “this-is-not-your-father’s-telecom-bill” moment comes on page 4. Title I is labeled “War on Terrorism.” There’s also a big subtitle dealing with copyright controversies and the so-called “video and audio flags.” There’s also a beefy section on “Sports Freedom” pertaining to local TV sports agreements.

That’s just some of the new stuff the bill takes on. There’s plenty more new rulemaking authority found in the measure that would empower the Federal Communications Commission to deal with new and old policy issues alike.

Still, the fundamental problem with efforts like this Senate draft is that our lawmakers often get obsessed with working out the smallest details of complicated communications/broadband/media marketplace developments. When pondering reform, a lot of very smart lawmakers and their staffers get together, wring their hands agonizing over hundreds of “What if?” scenarios about future market developments, and then concoct a legislative response to each of them. This is how we end up with dozens of pages of new rules on universal service policy (Title II of the bill), video service regulation (Titles III and IV), and digital television transition rules (Title VII) in addition to the new things mentioned above.

Conditional Liberalization

Of course, there is some liberalization proposed in the bill too, but it’s typically of the “Mother, may I?” variety. As in, “Mother, may I please have permission to enter the video marketplace and offer consumers a product they are clamoring for?” To which the government answers: “Yes, you may, but only after you satisfy a long list of requirements or other concurrent regulatory obligations.”

That, in a nutshell, seems to summarize the way almost all modern telecom “liberalization” reform works. Forget about true deregulation; today’s “deregulation” is all just one big regulatory quid pro quo. You get a little freedom, but only at a steep price.

And it seemingly makes no difference that each new regulatory paradigm is upended every few years by the rapid pace of technological change. Twenty-five years ago, lawmakers obsessed over long-distance rates and a new regulatory regime was minted. But it became outmoded fairly quickly (especially with the rise of flat-rate cellular service in the 1990s). Fifteen years ago, cable rates attracted legislative attention and a new set of rules followed. But those rules quickly became viewed as counter-productive and were abandoned.

Then, a decade ago, lawmakers began losing a lot of sleep over the local voice telephone market, and another regulatory regime was born. Opponents spent the past five years litigating it–all the way to the Supreme Court twice–in an attempt to figure out how it should work … only to see much of it abandoned a few years later.

And now comes the Internet, broadband, Voice over Internet Protocol (VoIP), and new video services, for which more new regimes have been proffered, including this 135-page bill.

A Better Way

Is there a better way? It begins with the humble acknowledgment that in a field as complex as communications law–which now includes cable law, satellite law, broadcasting law, First Amendment law, Internet law, and apparently even War-on-Terrorism law–it is simply impossible for even the most enlightened policymakers to know what lies around the corner and how best to deal with it pre-emptively.

I’d like to put forward the reform model my colleagues here at Progress & Freedom Foundation (along with dozens of respected academics and policy experts from outside our organization) worked so hard to construct.

The Digital Age Communications Act (DACA) project proposes to tear down the old regulatory paradigms and replace them all with an FTC-like “unfair competition” standard. Under DACA, the FCC would retain some baseline regulatory authority to oversee the marketplace, but this authority would be quite limited and would be based on sound principles of competition law and economics (i.e., like streamlined antitrust regulation). Seriously anti-competitive corporate actions that lead to demonstrable consumer harm would still be policed and punished under DACA. But this would be done on a limited, case-by-case basis without prejudging business models or practices or by imposing prophylactic regulatory regimes.

I actually don’t think the DACA effort goes far enough in terms of tying the hands of regulators, but it is vastly superior to the sort of continued heavy-handed regulatory approach embodied in the new Senate Commerce Committee draft.

Sen. James DeMint (R-SC) has recently introduced a proposal based loosely on the DACA framework. The folks on the Senate Commerce Committee certainly must have seen the DeMint proposal before they released their new measure. I would really like to know why they rejected such a sensible approach to the issue.

When you look around today, you see more marketplace competition and more technological innovation than ever before. And yet if you didn’t know any better after reading through this new Senate proposal, you’d think we face some sort of national crisis in the communications sector.

It’s time for our lawmakers to shed their “Chicken Little” paranoia about communications and media markets and to start seriously liberalizing these over-regulated markets. The new Senate proposal just doesn’t get that job done.

Adam Thierer ([email protected]) is senior fellow and director of the Center for Digital Media Freedom at the Progress & Freedom Foundation. This article is adapted from an entry in the PFF blog.