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Monday, August 3, 2009

Where is FCC Authority to Regulate in Apple-Google Spat? What are the Costs?
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Over at Twitter, Jerry Brito asks a smart question about the Federal Communications Commission's recently-opened investigation of the Apple-Google spat over Apple's recent decision to reject the Google Voice app from the iPhone App Store. Jerry asks: "Maybe I should know this, but what authority does the FCC have to demand that Apple explain anything?" Good question, Jerry! But no, I don't think there's anything you're missing. We might consider this merely the latest chapter of the agency's rogue operator history: If you can't find the authority to do something, just assert it anyway and go for broke! The idea of living within the confines of the law and paying attention to statutory authority seems like an alien concept to the FCC. As my PFF colleagues Barbara Esbin and Adam Marcus have pointed out in their amazing recent law review article, "The Law Is Whatever the Nobles Do: Undue Process at the FCC," when all else fails, the agency just asserts "ancillary jurisdiction" and claims that the whole world is their oyster. They argue:

The FCC's means of asserting regulatory authority over broadband Internet service providers' ("ISP") network management practices is unprecedented, sweeping in its breadth, and seemingly unbounded by conventional rules of interpretation and procedure. We should all be concerned, for apparently what we have on our hands is a runaway agency, unconstrained in its vision of its powers.

Of course, even if we ignore the agency's cavalier attitude about the law and statutory authority, there are other reasons to be concerned about FCC interference in this matter.

Berin and Ryan Radia have already pointed out the other side of the story: That this is just old-fashion cut-throat competition, and that consumers continue to enjoy rapidly expanding options in this marketplace. [Also see this paper that Barbara Esbin and Berin co-authored: Should the FCC Kill The Goose That Laid The Golden iPhone.] And even some of those folks in the press or the blogosphere who welcome some FCC oversight in this case recognize the horrific potential downside here. As Larry Dignan, Editor in Chief of ZDNet, argues in his piece today, "FCC's More Proactive Stance: Should We Cheer or Worry?":

But then there's the other side of the equation. The one that can make you squirm. The FCC is looking into everything from app approval to exclusive deals between carriers and device makers. At some point, the FCC meddles in free markets. It will micromanage. For now, the FCC's moves require a wait-and-see approach, but it's clear there's a new sheriff in town and he isn't going to be shy about probing all aspects of the wireless business. Stay tuned to see how this turns out.

Uh, yeah. And that's what has some of us so worried. When the FCC "meddles" and "micromanages" the results are usually less than stellar. Once the FCC starts regulating every aspect of our smartphones, chances are they won't be so smart any more. In just one year's time, the Apple iPhone Store has facilitated 1.5 Billion downloads of over 65,000 free and paid apps by consumers in 77 countries. Does anyone think the FCC is going to do better than that once they start micro-managing the process?

posted by Adam Thierer @ 1:30 PM | Communications , Spectrum

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