In addition to an Opening Keynote Address by FCC Commissioner Mignon Clyburn, a Conversation with FCC Commissioner Michael O'Rielly, and a Closing Keynote by FTC Commissioner Maureen Ohlhausen, there were two panels. The Free State Foundation is now releasing a transcript of the conference's first panel session,"A New FCC and A New Communications Act: Perspectives from Industry Leaders."

The panel discussion was moderated by RANDOLPH MAY, President of the Free State Foundation. The panel consisted of the following senior executive officials:  

• REBECCA ARBOGAST, Vice President, Global Public Policy, Comcast
• JAMES ASSEY, Executive Vice President, National Cable & Telecommunications Association
• JIM CICCONI, Senior Executive Vice President-External and Legislative Affairs, AT&T Services, Inc.
• STEVE LARGENT, President & CEO, CTIA-The Wireless Association^®
• CRAIG SILLIMAN, Senior Vice President for Public Policy & Government Affairs, Verizon Communications

The transcript should be read in its entirety for an appreciation of all of the views of each panelist. Nevertheless, in the meantime, immediately below are selected excerpts in the order of the panelists' presentations. These excerpts provide an indication of the various perspectives presented at the session. But, again, the transcript should be read in its entirety in order to obtain a full appreciation of each panelist's views. And if you would like to watch the YouTube video of the proceedings, it is here.

REBECCA ARBOGAST

I think the team that [Chairman Wheeler has] brought in -- It says a lot about a person when you look at what people they surround themselves with to guide and advise them, and I can't think of a better group of people that he's brought in.

I hope at some point through this whole process of his tenure, there is the bandwidth to focus on those last half of the chapters of the National Broadband Plan.  I think that all those -- what Blair calls the verticals, I think are very important with healthcare and education, public safety.  And so I hope that there is the ability to do some movement in that direction.

I think people should keep in mind [that] it's hard to shift entire industries back and forth between regulatory regimes.  It's inefficient, and once you go on a particular course, it's very difficult to unwind at some times.

But I think we've got a natural experiment that's been going on for about a decade now between the U.S., which did not apply these rules to Internet systems, and the EU, which did.  They took the pretty aggressive regulatory regime that everybody was applying to the telephone network and extended that over to the Internet networks. And what you see very clearly happening over that period of time is the investment shifted out, so the investment and jobs growth happened in the U.S., and investment and jobs growth declined very seriously in the EU. And then Australia, I think, is the third sort of model of investment . . . [T]hey did the same kind of resale competition that the EU did, found that they weren't able to get the investment they needed, so a few years ago decided to decommission the private plant and do a government-owned network. And so it will be interesting to watch that play out.  It's too early to know for sure, [and] they've had a rocky start.  I think watching those three different models and where the money flows because anybody knows that money can go wherever it's going to make profit, and the investors are watching that very closely.

[P]eople need to remember, [the proposed Comcast/Time Warner transaction] is not a horizontal concentration.  It's not vertical acquisition.  It's an expansion of a footprint which really presents very limited sets of issues. . . And it's important to be able to have that scale, not just to do things like expand the speed of broadband and get the deep video libraries but also to do things that are kind of hidden behind the scenes.  . . And you get all this benefit without decreasing competition, so there will be no fewer services or competitors that will be available.  In fact, it probably will increase competition.

[Regarding a New Communications Act]: One is that I think the key thing they need to do is recognize that the world changes so fast, and so all the dynamic competition that we talk about means that you can't predict where things are going. There was an event last week that Gerry Faulhaber and Larry Downes, who I see in the audience, were talking about -- and their point was when things are changing that fast, the last thing in the world that you need are prophylactic rules.  So whatever happens, I would guard against that.

JAMES ASSEY

We've had this tremendous economic engine over the past two decades because we have recognized the constantly changing, evolving nature of the Internet and Internet technologies.  We're not talking about something where we pour concrete and it hardens and that's what it is -- it just is going to be that form.  It's constantly changing, and we want it to constantly change because that's really what drives the innovation that leads to all the consumer benefits that provide all the new services that consumers enjoy.

So I think when we look back at the past two decades and where we were and where we are today, our biggest challenge, or the biggest challenge for regulators, I think, is to continue to have that economic engine go forward and as Rebecca said, do no harm.

I think the [Verizon] case pretty clearly sets out a fairly expansive view of Section 706, and I think it's important that we parse through what the FCC could do versus what the FCC should do.  And there's a big distinction between the two. I do think maybe going back to your original question, Randy, it's important to divide, I think, the legal issues that were teed up in the case versus the policy issues of what should the correct regulatory policy be.

I think in a lot of respects, many of us who believe that the Verizon case was going to be about the ancillary authority and how far that extended were thrown a bit of a curveball by 706.  I think it's fair to say a lot of folks didn't believe that 706 conveyed the extent of direct authority that the court -- at least a divided court -- found. But it is the law of the land, at least here in the D.C. Circuit, and we know that 706 as currently interpreted, does something more than nothing and something short of common carriage.  And it will be up to future decisions and future FCC rulemakings to determine, I think, what the contours of that legal authority are. But aside from the legal questions, I think you have to go back to the underlying policy question of how are we going to regulate given all of this robust competition that exists not just among network providers but also the varying levels of the Internet kind of ecosystem stack.

I think -- and maybe this goes to where Craig was aiming -- towards a new statute.  When we look at the statutes that we have, so much of what we have is based upon the premise of a monopoly provider.  In 1992, cable was 98 percent of the multichannel video universe.  AT&T used to be the only game in town. And we live in a very different world now.  So to the companies represented up here and in the audience, a lot of the innovation that has occurred has really occurred around the obstacles that the statute has provided. But at some point if we want to rationalize the statutory thinking with the world we live in today, we need to rethink the bases for these rules.

I think the consumer has more choices available to them now than ever before, and they increasingly, I think, have the power to select the video choices that meet their needs.  And I would say the communications choices that they want to use, whether it's AT&T, Verizon, or WhatsApp, is one of the greatest benefits of convergence that we've seen, and I don't expect that to slow down anytime soon.

JIM CICCONI

I think [the single most important priority for the Commission] is the IP transition, and it's not just because the FCC is challenged with navigating the technological change successfully.  I think it really tees up a much larger question for the agency, which is this:  The IP transition really challenges the agency to modernize its entire approach to regulation. I think we're all pretty aware of how dramatically the communications industry has changed just in the past decade let alone the last several.  And the FCC really hasn't, and I think we're very encouraged that Chairman Wheeler and the Commission have decided to tackle this, pretty immediately after he assumed the job, in fact.... I think the biggest challenge they have is really bringing the FCC into the 21st Century and updating its entire approach to match the realities of the marketplace.

What is a little disturbing to us is there seems to be a tendency now -- and we commented on this actually on Friday.  There seems to be a tendency to not, in fact, view the [spectrum] screen as a safe harbor, but to even raise questions if you're under the screen.  And I think that's really a notion that I think calls into question the entire reason for having the screen. I think if there's no certainty that any company has in terms of their spectrum holdings, then it's going to jam up the ability at least in the secondary market to operate effectively.  If you're under the screen, yet you're still not somehow safe, then I think it really raises a question as to whether the Commission isn't just kind of making it up as it goes along there.

There are huge swaths of spectrum, particularly held by Sprint, which holds more spectrum than anyone else in the industry by a long-shot, that aren't counted in the spectrum screen.  And the problem with this is first, within the spectrum screen itself, you take now a tool that should be clear and objective and allow companies to make investment decisions with clarity, and you've thrown in an element of uncertainty.

I think the most encouraging thing is that Tom's brought the Commission, I think, a very refreshing attitude and approach.  He's brought a really stellar team in there with him, I mean, people that we all know and respect that have worked in this industry for a long time, who really understand the issues.  So you've got a really high quality team that he's brought in there.  They reach out, they listen, and they act.  Within a week of getting into the job, the Chairman took up the IP transition petition that we had filed over a year earlier and had just been sitting there un-acted upon and vowed to act on it and did at the first subsequent meeting they had.

How do you ensure a level playing field when you do regulate under 706?  And I think the FCC has confronted this or is confronting it to some extent right now in the text messaging area, for example.  There are 911 requirements. . . So the FCC, I think, is trying to figure this out and how to address it.  I think the key is that if you're providing one of these services, which increasingly will be delivered over IP, they're going to be very difficult to distinguish one from another based on who provides it.  If you're going to have a regulation in that area, it's going to have to apply equally to make any sense. . . Because at the end of the day if a regulation is justified in a particular area, it would have to be applied to all. So I think that's the challenge the FCC's really going to have, but I also think it's probably a good reason for them to be very cautious.  Because the whole point of it is when you've got all these competing services, in theory, the market ought to be able to address many aspects of these things without the need for rules.

Municipalities are creations of the state law, and I think it's a proposition of dubious constitutionality to think that the FCC somehow would have the authority to preempt a state law prescribing what a municipality, which it created, can and cannot do. 

I think if the FCC went down the [incentive auction] path that T-Mobile is arguing for, not only would it be unfair and I think would call into question whether they were following Congressional intent, but I think they'd be setting the auction up to fail.  I think that somehow Christie's and Sotheby's and everybody is missing the point of auctions if you're supposed to go into [an auction] with inhibitions and restrictions on certain participants.

[Regarding a New Communications Act]: I think too often in past years, the FCC has felt its mission is to regulate, and that's not true.  Its mission is to anticipate and address problems, and regulation is the tool they use to do that.  I think they've gotten away from that. I think in any new law that the Congress ought to be very specific about what problems it wants the FCC to address and ought to, I think, circumscribe them getting this broader authority to act in the public interest.

STEVE LARGENT

Everything I say is spectrum from CTIA's perspective, and spectrum is our highest priority that we have.  And it will continue to be.  We began the debate about spectrum that's coming to auction now back in 2008, and it's actually the fastest that spectrum has ever come to market in terms of moving this debate along ... people who stand to gain the most are our consumers that are now over 310 million in this country.  

My view is that instead of focusing on scarcity, we need to focus on abundance.  We need to have more spectrum that's available for the industry and not be worried about how much spectrum you have, but just keep rolling out more spectrum through auctions and other ways.

I applaud [Chairman Wheeler's] effort to continue the push to get spectrum auction.  And the only other -- the caution I would say is that my hope is that Tom -- particularly Tom coming from the position that I am in now just 10 years ago -- would exercise regulatory humility at the FCC.  And that's yet to be seen that that will happen.

[N]inety percent of consumers in this country have access to three or more wireless carriers for wireless broadband.  Ninety-eight percent of all consumers in the United States have access to at least two wireless providers for wireless broadband. So the fact is that healthy competition is taking place, and consumers have a lot of choices when it comes to broadband.

[T]he whole net neutrality debate that it really came up about six, maybe seven years ago is that I was in Congress for eight years.  I've been at CTIA for over ten years, and I have never seen a debate in Congress or anywhere else, the FCC or just in the public in general, that's been carried forward that long over what -- Rebecca, you said four cases of, that were alleged, network neutrality violations. I've never seen that.  I mean, nobody's life is at stake.  But this has just been an issue that will not go away, and yet I'm not seeing any harm.  And so there's a lot of issues that we need to work on at the FCC and within the wireless industry and within Congress..., but I just don't see network neutrality rising up to that level of urgent need....We have a number of things that we need to have a healthy debate about.  Network neutrality is not one of them, in my opinion.

[T]he solution to all of this is let's allocate the 500 megahertz of spectrum that the President called for so that everybody gets some spectrum and we're not having to have these fights over the little bit of spectrum that's coming out. . . it shouldn't take somewhere between nine and 12 years to get spectrum to auction.  

[Regarding a new Communications Act]: Service, focus on service, not platform.  Focus on enforcement, not regulation.  Focus on predictability and have a bias for markets, not regulation.  And in those areas that with respect to the disabled or things like E-911 or other emergency services, they should be competitively neutral.

CRAIG SILLIMAN

I agree strongly with the idea of, for example, regulatory humility, but a lot of these are areas where the innovation and the investment in the industry and the technological progress are going to bring tremendous consumer benefits.  And really, what we're looking for is policymakers to stand back and let that innovation investment take place.

Spectrum is a unique area where we need policymakers to take affirmative actions.  Spectrum is the lifeblood for the innovation that's taking place in this industry, and this is an area where the spectrum needs to get into the marketplace or it's going to choke off that investment in that innovation. And by the way, this is not just a role for the FCC... [T]here's a strong role for Congress here, too.  This is an area where there is no central coordinated, coherent strategy for managing spectrum in this country.  It's controlled by lots and lots of different agencies, lots and lots of different entities.  That makes it very difficult to get the spectrum, identify it, clear it, move it out.  So there are roles for the FCC, roles for the Commerce Department, and roles for Congress in getting spectrum into the hands of industry where it can be best used.

[T]he fact that [updating the spectrum screen] is so clearly results-oriented becomes a question of institutional integrity.  If this tool that is so potentially objective and clear is being used in a clearly results-oriented way, it then undermines credibility for the Commission on a whole lot of other issues that don't lend themselves to clarity in terms of what the real objective is. And so I think Chairman Wheeler should make this a priority because it sends the right signal, not just of how you're managing the spectrum assets in this country, but it sends a signal that says when we say this is what the policy is, this really is how we implement it.

[O]ur overview at this point is, as we said, [net neutrality] is not our top priority.  Our top priority is things like spectrum.  There are other areas we want to focus on.  This has become a distraction.  And frankly, I think we've reached a point where we really need to look to Congress.  Regardless of what you think the FCC's role should be in regulating the Internet, whether you think it should be a very minimal role or whether you think it should be a very expansive role, you should be somewhat troubled that, where we are in the system today, is people sort of saying, well, if I read this into this court's decision... and what Congress's intent may have been here and 706(a) versus (b) and through that, we will divine what Congress's original intent was.  That's a very kludgy way to get to the solution. And I think where we are is saying, it's time to stand back and have policymakers look at this holistically, look at what the right regulatory regime is to protect consumers on the Internet, and further appeals of this particular decision are simply a distraction from greater priorities.

[I]t cannot be coincidental that you look at the investment flows, and there tends to be a correlation between the level of regulation and the areas in which investment is going.  So clearly, wireless has benefited tremendously from a lighter touch regulatory environment than have some of the wireline environments.

And if you begin looking at technology, looking at markets, I don't believe that investment -- that the regulatory environment has no impact.  In fact, I know from sitting in a company day in, day out, seeing business case decisions that are made, the level of regulation absolutely is a factor that is taken into account.

The second thing is I think we tend to be deterministic on these, and we say the technology we have today is the technology that there would have been.  And we can't imagine an alternative future.  And we don't also think about the levels of innovation.

So I sometimes point to the postal industry, and had you a number of years ago said we should have postal neutrality, that would have sounded very rational and very logical because neutrality has to be a good thing.  And 20 years later, we wouldn't have had next day mail, and we wouldn't have had bulk mail.  And you would have just dropped things off at the post office, and everything would have been treated equally.  And you wouldn't have known that there was any possibility that I could have actually paid a little more to have next day mail, and so you wouldn't have known what you would have foregone.

[Regarding a new Communications Act]: [M]arkets, technologies, have changed radically since the laws were first written in 1934, or even in 1996, so start with a clean slate.  Rely as much as possible on competition, not on economic regulation.  Build your platform around consumers, not around technologies.  Technologies will change.  Protection of the consumer should be your first principle. And avoid technology silos and focus on consumer protection and competition.

A PDF of the full transcript of Panel I, "A New FCC and a New Communications Act: Aligning Communications Policy with Marketplace Realities," is here.