Broadband Debacle: The FCC And The Political Economic Failure Of Trying To Please Everyone

Art Brodsky is right: the FCC lacks gumption simply to do its job regarding Net neutrality. It could, as he notes, follow the EPA’s model with climate change. Side-step entrenched corporate interests and a captured Congress all seeking deadlock. Just get on with a rulemaking. Even if in the EPA’s case it’s an an imperfect solution (substantively and bureaucratically).

At stake is the seemingly simple question: are data on the Internet to be treated equally? Or can corporate owners of pipes/spectrum licenses/transmitters charge different rates for partners, allies or the wealthy?

The FCC broadband quagmire has been more typical than not. The FCC is, however, moving closer to systemic failure by refusing to use its authority like the EPA did for climate change. Trying to placate all its political economic stakeholders is creating a car wreck.

Same Sumo, Different Match

Today’s Net neutrality sumo wrestle is actually an age old question, recast in different guise for today’s technologies and circumstances: are carriers commodities? Brodsky’s balanced criticism above is more insightful than the Usual Suspects’ breathless, clickbaiting blog headlines.

As long time readers know, we’ve represented most of the players at least at a VP or GC level, and in some cases, CEO. On the Hill and before the FCC. We’ve recalled here before when Art Brodsky was at Communications Daily before the 1996 Telecom Act, he’d call for quotes or information about ‘the game’ of the moment. Now so many years later, we remember our non-industry conversations easily but the rest is a deserved tedious blur. We’d debate the various science fiction shows then on TV. (He was a ‘Sliders’ fan).

Activist bloggers new to telecom/Internet regulatory matters are potentially dangerous ingenues. Not because of their conclusions. But because frequently they don’t understand political regulatory economics and history. They’re important for today and the future. Internecine warfare is par for the course. Whether the issue was the then-hot-topic of ‘video dial tone’ (TCP was thought to be a medical condition and ADSL was still science fiction), initial spectrum privatization, the infamous PCS spectrum auctions (especially C-block), local exchange access fees and the 1996 Telecom Act implementation, etc.

Back room alliances, coalitions, shakedowns by various Hill poobahs? Largely unchanged. Names change.

Back then when a Valley tech alliance met in a D.C. conference room, a meeting often waited for Netscape’s Peter H. to join via speaker phone telecon. He’d be on his crappy then-state-of-art AMPS analog cellphone driving in the Valley ostentatiously speaking over wind. Today, it’s now Google and they actually have a D.C. office. In each case, all sides warned X would be a ‘disaster for consumers and technology’ . (If you want to see real howling, go back and study Hundt’s political-economic decision to promote what were then called CLECs (competitive local exchange carriers) after the 1996 Telecom Act. Or the ‘modem tax’ rumor mill. We lived it).

Today’s situation is different for two reasons. First, a court this Spring limited the FCC’s jurisdiction over the Internet. Second, this particular FCC is addicted to political-economic stakeholder approval. The result is a broad band dance off the record and unstructured. Historically, most (but not all) comm/net warfare and posturing occurs within a regulatory docket established by a Notice of Proposed Rulemaking (NPRM) under the Administrative Procedures Act (APA). Today’s free form broadband merry go round makes many stakeholders and observers nervous. Rightly so.

What To Do?

FCC NPRMs are not for the squeamish. Before electronic filing they probably did hasten climate change by depopulating forests, converting trees into mounds of mostly unread paper. (The video dial tone wars between telcos and cable companies especially infamous). Hiding outcomes in obscure regulatory detail ensures only semi-transpaparency even to players. To the public, without an expensive interpretive shaman on retainer, almost always opaque. That’s true for all regulatory entities and their inevitable capture by stakeholders. Semi-transparent beats scompletely obscure and off the record any day.

The solution is, as Brodsky notes, for the FCC to purse its NPRM or issue a new one, clarify its claim of jurisdiction in light of recent precedent, and get on with it. Procedural formalism is completely disconnected with outcomes and good public policy. It does impose structure. Clarity and institutional action are not just a good in and of themselves. They preserve the perception that government functions and outcomes are legitimate. Post Goldman, AIG and TARP that’s no small thing.

For some relative newbie bloggers we castigated earlier, we’ll just point out that we personally and the tech industry generally spent years (and the latter possibly a billion) to keep the Internet out of the FCC’s jurisdiction. Telcos were and are where good ideas go to die – this having represented most of the telecom players whether IXC, RBOC, CLEC or LEC in various fora. For example, asking the FCC ‘to take control’ of the Internet ‘to prevent [insert bad guy here] doing X’ is purely situational outcome determinative thinking. Much of America’s commanding Internet lead is a result of a little heralded decision by the Reagan-era Mark Fowler FCC to classify such activity as outside ‘telecommunications services.’ Saving the Internet from traditional telecom regulation over the ensuing years is as important as ARPA’s initial promotion of TCP/IP to where the Net is today.

All the more reason for the FCC to fish or cut bait – and clarify its role after recent court decisions. It can’t propitiate all its stakeholders with off-the-record meetings. Get on with the rulemaking or promulgate a new NPRM. Dare to be resisted by some. Just get on with it.