Tuesday, July 6, 2010 - The Progress & Freedom Foundation Blog

Camel Puts Nose under Tent with FCC "Wireless Model" for Internet Regulation

Julius Genachowski claims his "Third Way" approach to taking over the Internet looks a lot like the benign "wireless model" of regulation.

If it were true, that would be a good thing.

According to Genachowski:

In its approach to wireless communications, Congress mandated that the FCC subject wireless communications to the same Title II provisions generally applicable to telecommunications services while also directing that the FCC consider forbearing from the application of many of these provisions to the wireless marketplace. The Commission did significantly forbear, and the telecommunications industry has repeatedly and resoundingly lauded this approach as well-suited to an emerging technology and welcoming to investment and innovation. In short, the proposed approach is already tried and true.
Presumably, the "wireless model," if applied to the Internet, would spur growth and innovation. But I have a question. In the FCC's NOI, how does the wireless model of "light regulation" apply to, er, the wireless model?

I haven't quite figured out the circularity of that one yet.

Oh, well. Maybe I shouldn't waste my time trying. It seems more apparent than ever that for wireless and wireline broadband service it's not really about regulating "downward" - i.e., deregulating, as is the hallmark of the "wireless model" - but instead, regulating "upward," thus adding regulation.

No doubt before 1993 the wireless market was a confusing mess. Says Verizon:

For many years, a bifurcated federal-state regulatory system similar to telephone utility regulation existed for wireless services. Congress put an end to that system in 1993 when it preempted state regulation of wireless entry and rates, establishing a uniform federal regulatory policy for the competitive wireless industry.
As touched on by Chairman Genachowski, after 1993 the lack of common carrier regulation - which could have been applied by the FCC - also proved integral toward building the wireless marketplace. A November 2009 GAO Report confirms this, noting:
...[H]aving determined that exempting carriers from certain regulations will promote competition, FCC has used its authority under the 1993 Act to exempt wireless carriers from some rules that apply to other communications common carriers. For example, in 1994, FCC exempted wireless carriers from rate regulations that apply to other common carriers. FCC has stated that promoting competition was a principal goal of the 1993 Act under which Congress established the regulatory framework for wireless phone service oversight. As required by the 1993 Act, in exempting wireless phone service carriers from regulations in order to promote competition, as FCC has done, FCC must determine that such exemption is in the public interest and that the regulations are not necessary for the protection of consumers.
But the "Third Way" actually goes in the other direction.

Not only does the newly proposed regulatory regime lack specific congressional authority, the only way the agency can achieve its purposes (whatever they are) is through the addition of regulation - exactly opposite of the "wireless model." First, the Commission must separate the transmission element of broadband from info services - the two together being previously unregulated. Then, as the Chairman says, it can invoke "the few provisions necessary to achieve [the FCC's] limited but essential goals" to keep the Internet open.

Invoke a few provisions? That doesn't sound like "wireless model" deregulation. But then, all must know that the "Third Way" isn't about deregulation anyway. Rather, it's about getting the camel's nose under the regulatory tent, thereby enabling broad Internet regulation when the agency deems it's necessary.

Ever share space with a camel before? That smelly, expectorating beast can make even the nicest tent a place in which no one wants to rest. Imagine what that'll do to Internet growth and innovation?

posted by Mike Wendy @ 3:08 PM | Broadband , Capitol Hill , Communications , Innovation , Internet , Net Neutrality , Regulation , Spectrum , The FCC , Wireless , Wireline