Friday, November 4, 2005 - The Progress & Freedom Foundation Blog

The Second Barton Draft--A Quick Reaction

Yesterday a new discussion draft was released by the staff of the House Commerce Committee. Taking as a given the regulatory framework adopted in the bill, to the credit of the drafters this second draft is in some respects less regulatory than the first draft. For this, the drafters are to be commended.

For example, the requirement in the first draft that the FCC approve registration statements as a condition of market entry has been overhauled. No longer must a service provider registrant wait for approval before offering service. And the FCC no longer has such broad discretion to disapprove a registration statement. The registration process is now akin to a notice requirement. This is much more compatible with the current competitive marketplace environment.

The new draft also appears to circumscribe the Commission's rulemaking authority and rely on the FCC's complaint process generally as a means of ensuring compliance with the act's requirements. This is a good thing (although like most things in life there can be too much of a good thing--there may be situations in which it makes sense for the Commission to issue a rule after notice and comment). This move towards a regime that relies more on adjudication (if this indeed is a correct reading) is a positive development, and consistent with our DACA Regulatory Framework proposal.

So, there are some positive improvements that deserve kudos. Even taking the draft's construct as a given, however, there is certainly room for further improvement. The interconnection provisions create a "right and duty" to interconnection among the various service providers, and the draft commendably directs parties to negotiate. But the parties may not reach an agreement, and the act lacks a standard for the Commission to resolve disputes. Not having a standard in the act is a recipe for years of litigation--and crap-shoot to boot (as they say). See the standard relating to interconnection that is part of our DACA Regulatory Framework proposal for language of the type that should be considered here.

The "access to bits" provision remains problematical.

Now, and most fundamentally: The draft retains as an underlying framework--its organizing principle--a reliance on techno-functional constructs around which regulatory requirements are ordered. Put in other words, the draft defines BITS, VoIP, and BVS providers in separate sections that contain the applicable regulatory requirements that attach to each. And this approach leads to definitional language that says, for example, with respect to broadband video providers, that BVS is a service that "may be included or offered with, but shall not be treated as subsumed in or subsuming, VoIP service or BITS." I confess I am a bit confused, especially in conjunction with the immediately prior subsection of the BITS definition that refers to BVS as a two-way service that is "offered in a manner that enables subscribers to integrate...customizable, interactive voice and data, features, functions, and capabilities...."

As I rehearsed here in commenting in the first draft, in the DACA project we have chosen to propose a competition-based regulatory framework that does not rest on techno-functional constructs almost certain to become outdated before they are clarified and re-clarified in an ongoing cycle of litigation. I still think the competition-based framework that relies heavily on post-hoc adjudication to resolve disputes is the model that makes sense going forward. So, while I commend the House Commerce Committee staff for the hard work--and it is hard work--that has gone into improving the second draft, I remain optimistic that, as the process moves forward, Congress will ultimately adopt a market-oriented competition-based model, rather than a technology-centric approach.

posted by Randolph May @ 4:38 PM |