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Thursday, September 15, 2005

The Barton Draft--Quick Reactions
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The long-awaited House commerce Committee Staff Discussion Draft released today. Emphasizing the "draft" part, the short title is referred to in Section 1 as the "___________ Act of 2005."

Like the Ensign bill introduced in the Senate in July, the yet-to-be-named House draft is generally deregulatory in thrust, and that is commendable. Like the Ensign bill, it is a good place to begin the debate concerning reform of our communications laws.

So with congratulations to the authors for the hard work done so far, and with the caveat of only first blush read, here are some quick reactions, focusing more on the problematic or possibly problematic, rather than the admittedly praiseworthy, aspects of the effort.

--The bill focuses on transmissions that use packet-based protocols to define new broadband Internet transmission (BITS) service providers. This attempt to define a new regulatory category based on a techno-functional construct might well be outrun by new technology developments before we can now imagine. Another approach is the one we suggested in our DACA Regulatory Framework that does not attempt to define broadband services for regulatory purposes, but rather looks at all communications services in a market-oriented way that presumes a competitive environment.

--The bill gives the FCC the authority to reject the registration statements for BITS, VoIP, and broadband video services if it determines the provider's offering "would harm consumers". This language seems to give the FCC far too much discretion to reject service offerings that would be benefit consumers. Any new legislation should include a more explicit market-oriented presumption in light of the competition that already exists. And any new legislation should avoid giving the FCC such uncabined discretion.

--The bill's net neturality provisions are deserving of special attention. While it sounds awfully nice to create a duty for network operators to provide subscribers with access to all lawful content, applications and services, the reality is that the prohibition on "blocking, impairing, or interfering" with such access may impede the realization of efficiencies in putting together service offerings. Such loss of efficencies that otherwise might be attrbutable to tailoring and specialization of services could create disincentives to invest in new facilities and applications. And the prohibition on "impairing" and "interfering" is likely to be a source of much new litigation (the new Section 251?).

--There seems to be a legal obligation for service providers to interconnect, but, if negotiations and mediation fail, the standard upon which the FCC is to resolve disputed issues is difficult to discern. A standard that sets a high hurdle for Commission intervention tied to demonstrable and non-transitoty market-failure, such as the one we proposed in the DACA project, is needed.

--While the provisions streamlining the video franchising process are welcome, the retention of all of the Title VI "content-type" requirements is disappointing in light of today's competitive video environment. Rather than "regulating-up" the new entrants, it would be preferable to get rid of most of the existing content regulation.

Again, with the Ensign bill, and having in mind what it doesn't address, such as universal service and spectrum reform, the draft offers a good point of departure for meaningful reform efforts. But there are also several areas ripe for a constructive dialogue looking towards further improvement.

posted by Randolph May @ 3:22 PM | Capitol Hill

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