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FSF'S SIXTH ANNUAL TELECOM POLICY CONFERENCE
MARCH 18, 2014 

  
  
On March 18, 2014, the Free State Foundation held its Sixth Annual Telecom Policy Conference at the National Press Club, Washington, DC. Entitled "A New FCC and a New Communications Act: Aligning Communications Policy with Marketplace Realities," the conference panelists discussed issues including Net Neutrality, the meaning of Section 706 of the Communications Act, the proposed Comcast - Time Warner Cable merger, the IP transition, spectrum auctions, video regulation, FCC reform, and a new Communications Act.

 

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

 

The panel discussion was moderated by DEBORAH TAYLOR TATE, Distinguished Adjunct Senior Fellow, Free State Foundation, and former FCC Commissioner. The panel consisted of the following experts:   

  • SHAWN CHANG, Minority Chief Counsel, Communications and Technology Policy, Subcommittee on Communications and Technology, U.S. House of Representatives
  • JUSTIN (GUS) HURWITZ, Assistant Professor of Law, University of Nebraska College of Law, and Member of FSF's Board of Academic Advisors
  • DANIEL LYONS, Associate Professor, Boston College Law School, and Member of FSF's Board of Academic Advisors
  • DAVID REDL, Majority Chief Counsel, Subcommittee on Communications and Technology, U.S. House of Representatives
  • NICOL TURNER-LEE, Vice President and Chief, Minority Media and Telecommunications Council
  • PHILIP VERVEER, Senior Counselor to the Chairman, Federal Communications Commission
  • CHRISTOPHER YOO, John H. Chestnut Professor of Law, Communication, and Computer & Information Science; Director, Center for Technology, Innovation, and Competition, University of Pennsylvania, and Member of FSF's Board of Academic Advisors

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.

 

Professor Christopher Yoo

 

What do you see happening post-Verizon:

 

There are a lot of hidden restrictions and landmines that the FCC has to negotiate around in terms of crafting an order. Common carriage is permissible, so therefore, anything that was permissible in a common carriage regime is essentially permissible under whatever the Section 706 authority is going to be. So if you can do different price classes under traditional common carriage, it would be extremely strange to interpret 706 to permit the FCC to forbid something that was permissible under the common carriage regime. Cellco Partnership says there have to be individualized negotiations and differential pricing. The ancillary authority jurisdiction puts many limits on what the FCC can do, and they're attempting to tiptoe around it. And my guess is they're likely to punt all that down the stream by just adopting basically something that strongly resembles the data roaming rules that were previously upheld in Cellco Partnership and let the major details be worked out later.

 

I was told that Michael Powell advised Chairman Genachowski that he should be either the Broadband Plan chairman or the network neutrality chairman, and he tried to do both. I believe that Chairman Wheeler is facing the choice of being the IP transition chairman or the network neutrality chairman. And my sense is that he is trying to do something responsive regarding network neutrality because of the political needs, but he's trying to do enough to be called responsive and get it off the center of his agenda because his primary responsibilities lay elsewhere in the incentive auctions and the IP transition.

 

What is your reaction to the Commission's finding that broadband was not being deployed on a reasonable and timely basis:

 

We're blessed with actually having some wonderful data actually studying [broadband deployment and penetration] for the first time through the NTIA mapping project and the FCC's semi-annual orders. And simply put, we have a vibrant world in which at the benchmark levels that the FCC has established, somewhere well over 90 percent of consumers have a choice of three broadband providers. The NTIA mapping study says 88 percent of American households have a choice of two fixed line providers, and that's not even counting wireless, which is now achieving 12-megabyte speeds and peaking at 60 in a world where you need 8-megabyte speeds to do HDTV. And so, what we see is a very dynamic world.

 

I'm doing a study right now comparing the U.S. market to other policy-making approaches. For example, in Europe where they've taken a much more restrictive approach, our penetration of 30 megabyte service or 25 megabyte service is about 86 percent; Europe's is 54 percent. And there are other huge, stark differences. I think that we're in a really wonderful world. When you go to Europe, the rhetoric is, "We're falling behind the U.S., what do we do to fix that?" And when we include wireless, there's a dissent by Commissioner Pai that flat out says if you take wireless as a real possibility, the number of unserved households as of a year ago drops to 5.5 million or 1.7 percent. And so you end up, depending on how you look at it, really seeing a tremendous amount of dynamism in the market that's very beneficial to American consumers.

 

What rules regarding spectrum caps or screens should be applied to the upcoming auctions:

 

It's a two-sided auction. You're actually getting a property from one side and flipping it to another. And if you take too much money out in the middle, there won't be enough money to convince the people who have the property to sell to the people who want the property. And there's an enormous tension here based on the real needs we have in this country for tax revenue and general revenue. But if we do that wrong, what's going to end up happening is the auction is going to fail, and what you start to see is a bunch of different things in tension. This occurs when we limit certain bidders' ability to participate in the market. That limitation is going to create downward pressure and even worsen this problem.

 

The most important thing to me is that the spectrum is made available quickly. One of the reasons we are among the world's leaders in LTE is we flipped the 750 megahertz spectrum much, much faster than many other countries. And if spectrum is not used, it's a wasted asset -- we've lost it. Our consumers benefit from getting spectrum in play as quickly as possible. And more than anything else, my observations from around the world are, those who do it slowly end up with worse service. There's nothing magic about it. And so I think we're on a fast track on this part, but I just hope we don't slow down in any way or take any steps that will stop it from being deployed properly.

 

What are your thoughts on licensed versus unlicensed spectrum:

 

There's a whole quality to this debate which I think is singularly unhealthy. People go into the camp that everything should be licensed, and other people go into the camp that everything should be unlicensed. And I think that there's a middle ground where most people would realize that we've had benefits from both, but very few people are putting forth analytical frameworks for understanding how we should make those choices . . . .  I think that we need some fresh thinking here to start to talk about how you make those tradeoffs when there are benefits coming from different approaches like unlicensed so we can understand how much management it needs and what its limits really are to make sure that it doesn't at the same time hurt the benefits of the licensed spectrum which have provided the foundation for much of the success that we've seen in the wireless world today.

 

What are your recommendations for an update or rewrite of the Communications Act:

 

I do think there's an emerging consensus to separate what I think of as traditional economic regulation, which in a much more competitive world becomes much less necessary, and shift the dialogue to fulfilling certain social obligations -- disaster recovery, emergency response, law enforcement, disability access, and universal service -- just to name a few . . . where we're moving past what we're going to replicate in the voice world and port it over directly and to start to think more creatively about how we solve the problems of emergency response and these other things.  And I think that's a very important dialogue that's just now starting to happen, thanks to the Committee, thanks to the Commission, and a lot of other leadership among the companies represented in the last panel.

 

Ambassador Phil Verveer

 

Regarding the most important priority for the FCC:

 

In terms of input, in terms of contributions from all over the agency, the incentive auction is a very, very important activity at the Commission these days.

 

What is your reaction to the Commission's finding that broadband was not being deployed on a reasonable and timely basis:

 

Our European friends confront challenges that we don't. When we talk about Europe, we talk about it as though it's a unified, completely unitary activity, and that's illusory.  We're talking about 28 or 29 countries, each of them with national laws, national regulations, and in some instances, countries that are too small to reach minimum efficient scale with respect to a lot of these activities. So the European parliament and the European Commission are trying to find ways to overcome that, but to claim that the United States is doing better than Europe as a unitary entity is a kind of statement that has an awful lot of material footnotes associated with it.

 

What rules regarding spectrum caps or screens should be applied to the upcoming auctions:

 

We really care a lot about the workably competitive environment in which wireless occurs. We don't want to do something in this auction or in any auction that threatens that. There's one other kind of nearly extraneous point, but I think it's worth making.  The professor makes a very good point about not delaying things, but it is certainly true that, again, if you look at the international environment, an awful lot of countries benefit from the examples that we set and the efforts that we've made. They can go to school on those things. And very, very often, it enables them, even if they're second or third in line, to overleap certain things and actually do better. So the lessons that are available are going to be very important.

 

What are your recommendations for an update or rewrite of the Communications Act:

 

The existing act, I think it's fair to say, is serviceable. It's a good thing that it is serviceable because history tells us it's not terribly easy to amend it let alone replace it.  If we are thinking seriously about doing it in the environment of rapidly changing technology, rapidly evolving business models, and rapidly changing consumer behaviors, we probably need something that is pretty simple and provides an awful lot of discretion for regulators because it will be very difficult to legislate on something that's very specific that will have very long life.

 

Dr. Nicol Turner-Lee

 

What is the most important priority for the FCC:

 

We can't go another auction without improving minority ownership and increasing the opportunities for minorities to be more engaged in the auctions as well as in every part of FCC decision-making. There should be an undergird of how it's going to impact consumers and owners of color.

 

What are your recommendations for an update or rewrite of the Communications Act:

 

At MMTC we have not taken a strong public stand, but we have written a paper where we agree that light touch regulation has actually created the environment and the conditions in which we've seen the Internet flourish. And if we try to put in additional rules we may see some chokeholds on the type of experimentation and innovation that's particularly benefitted people of color . . . not addressing how we enhance consumer engagement, how we actually protect consumer interests, and how we make the Internet so vibrant diverts the attention from the ultimate goal of where we want to see the Internet go, which is to create economic development and a vibrant digital ecosystem which we're seeing now.

 

What is your reaction to the Commission's finding that broadband was not being deployed on a reasonable and timely basis:

 

We are doing better as a country. A couple years ago when the Broadband Plan was actually introduced, MMTC did a study where we found that place did matter in terms of having access to high speed broadband in particular or competition or competitors.  I think the thing that we all have to fear as we go through this conversation is digital redlining and the impact that it will have in terms of the social benefits of broadband if there are still places where people actually do not get access. And I think that's where the promise of the IP network transition and other things that we've talked about so far will allow us to create more ubiquity without leaving people behind.

 

What rules regarding spectrum caps or screens should be applied to the upcoming auctions:

 

What we've actually been most concerned about is what the ecosystem will look like for minority ownership because [the incentive auction process] is moving so fast. If you look at the designated entity rules that were mandated under Section 309(j), we have found since 2006 that even with the successful H block and the other successful auctions, that minority entrepreneurs have gotten less than .005 percent of the revenue. As we've said so far, the competition-based approach is very inclusive of all the stakeholders. Because when you have that type of competition, it also lends itself to the economic development that we want to see in this country . . . . We've gone before the FCC and talked about looking at reforming the designated entity ["DE"] program. And for those of you that don't know, that includes collectively small businesses, rural telcos, minority and women-owned businesses.

 

What are your thoughts on licensed versus unlicensed spectrum:

 

We've argued for a balanced spectrum approach when it comes to licensed and unlicensed . . . We know that there are points where we need access in underserved neighborhoods, but we also know you can't do that without pinging to a licensed band . . . We need to really consider ways to balance an approach so that we can have continuous coverage while at the same time respecting the rules around all of this.

 

What are your recommendations for an update or rewrite of the Communications Act:

 

I think as we go through this update, as opposed to rewrite, we need to ensure that it's a flexible system because the processes and the protocols that we're seeing put in place are changing and they're changing very rapidly . . . As we look at the Comm Act Update, this is a great opportunity to focus on achieving four goals. One is it must find ways to advance minority ownership . . . I think also we have this great opportunity to look at the update to enhance first class digital citizenship . . . we have to find ways where this act enables new innovations in healthcare, education, and civic engagement in ways that we've started the discussion about a couple years back.  We want to see an act that actually accommodates that growth rather than stifles that. I think we still need to protect universal service programs . . . Lifeline Link-up is one that we need to really make sure gets preserved in these discussions.  And I think we need to think of some of the laws that do stifle build-out in underserved communities. There is some clarification that still needs to happen in terms of pole rights et cetera that we need to look at. 

 

David Redl

 

What is the most important priority for the FCC:

 

The incentive auction is definitely Priority 1, 2 and 3 and should be Priority 1, 2 and 3 at the Commission. We've said before we hope that they can take care of the broadcast issues. The wireless industry is used to dealing with the auction process at the FCC. The broadcast industry is not.  So the sooner the FCC can answer the questions and solve the question marks in the equation for the broadcasters, I think the sooner we'll be back on track to get this thing done in a timely manner.

 

What do you see happening post-Verizon:

 

My bosses have been very clear that they currently view net neutrality, and have viewed it since its inception as the Open Internet principles way back when, as a solution in search of a problem. The D.C. Circuit remanded the rules in January, and the Internet continues to march on to bring us the things we want. As it turns out, just because those rules aren't in place doesn't mean the Internet suddenly goes away. Now we've gotten out of the policy and we've all made our citations. From a legal perspective, we've talked about Cellco and Verizon and City of Arlington; what do all these things cobbled together mean? I think the one thing we should all be aware of is it means no one knows what it means. And that level of uncertainty being brought back into the Internet debate I don't think is helpful from a business perspective, and I don't think it's helpful from a social perspective. And as we start to look forward, my bosses would like to see the FCC spend the majority of its time on matters that are solving actual problems or are advancing technology in way that brings real benefits to consumers. And we just don't see net neutrality as doing that.

 

What is your reaction to the Commission's finding that broadband was not being deployed on a reasonable and timely basis:

 

[The failure of the FCC to make a finding that broadband was being deployed on a reasonable and timely basis] is something we were concerned about on the Energy and Commerce Committee as well, having seen that report come out and how the FCC failed to make a finding. It was one of the things that led to H.R. 2844, the FCC Consolidated Reporting Act, which would combine a bunch of those "siloed" industry-specific reports into one market report. It passed the House unanimously. I would be a bad staffer if I did not plug that it would be nice if the Senate would take some action on that unanimously passed bipartisan piece of legislation.

 

What rules regarding spectrum caps or screens should be applied to the upcoming auctions:

 

One of the greatest pro-innovation, pro-job moves the FCC made was having the humility to recognize that spectrum caps weren't working and removing the spectrum caps in the early 2000s. That's when the wireless industry started to really invest.  That's when the wireless industry started to really take off in America, and it's one of the reasons we have such a vibrant marketplace now. I hope that the current FCC will learn the mistakes of FCC's past as they look at this issue and not put any caps on the de facto ones in place.

 

What are your thoughts on licensed versus unlicensed spectrum:

 

We had [the] debate last Congress: What is the role of licensed and what is the role of unlicensed spectrum as we look at new allocations? And how will the Middle Class Tax Relief Act and the spectrum provisions there play out? . . . . When you look at the potential recovered licensed spectrum and the potential for expanding the 5 gigahertz band for unlicensed use, the Middle Class Tax Relief Act actually had more unlicensed options than it had licensed options. And so certainly, my bosses agree that that was a good approach and something we should be putting into the bill bipartisanly. It passed. . . I think we all agree that there is a role for both and that both should be looked at going forward.

 

What are your recommendations for an update or rewrite of the Communications Act:

 

We do go to great lengths to say "update" and not "rewrite" because we're not sure what the product is going to look like, and that's why we're doing a year's worth of hearings and white papers and stakeholder meetings to figure out what pieces of the act we would like to retain and which ones we would like to modify . . . . The world has changed in terms of how we approach communications and technology and we're hoping to spend the next year and the next Congress looking at how we can update the act to be flexible enough to deal with this really fast changing part of our economy but to still give the kind of certainty that consumers and businesses have come to expect.

 

Professor Daniel Lyons

 

What is the most important priority for the FCC:

 

I don't disagree that the incentive auctions are incredibly important.  I'd put a spotlight on one other thing going on behind the scenes at the FCC and that's universal service reform. This is a really important transition time as we move away from just voice-based communication and begin to start thinking about how to close the digital divide. It's a very difficult question.  It's one the FCC has done a lot of work on, and I encourage them to continue doing that going forward.

 

What do you see happening post-Verizon:

 

I don't disagree that there are a huge number of potential landmines that the FCC's going to have to negotiate around in order to be able to get done what it needs to get done.  That having been said, one of the things that I think is most interesting about this is the Chairman's own comments about the importance of competition, and I think that's a big change in rhetoric from the previous administration. And if it spills over into the net neutrality proceeding, as I hope it does, what we may see is less of a focus on ex ante prohibitions and much more on a broad standard that we will learn the meat of on a case-by-case basis. And I think there are a number of models that exist even under the current Communications Act. You can get something like the program access or the program carriage rules that apply to cable where a broad non-discrimination norm is set, and then what that means in individual circumstances becomes clear on a case-by-case basis. So the latest entry was the recent fight between Comcast and the Tennis Channel.  The case-by-case approach is beginning to fill out what the legal norm is under the current framework, and it allows more flexibility for rules to evolve over time.

 

What is your reaction to the Commission's finding that broadband was not being deployed on a reasonable and timely basis:

 

The D.C. Circuit commented on the curious timing of the FCC's reversal on the question of whether broadband is being deployed in a competitive fashion. One thing that hasn't come up yet is satellite, which has made a number of strides in recent years to overcome its latency problem and is becoming a competitive alternative too.  Satellite was how we solved the rural problem with regard to cable provision. It was DIRECTV and Dish that were getting the signal out to people where it was uneconomical to run the wires.

 

What rules regarding spectrum caps or screens should be applied to the upcoming auctions:

 

Generally, you adopt an auction mechanism because you're putting trust in the price mechanism to guide a scarce resource to its highest and best use. And any time that you attach conditions to that which limit the ability of players to participate in the market, you're distorting the ability of price to do that. We saw that with the C block auction.  There have been a number of studies that have shown the open access condition that was placed on Verizon's spectrum meant that the auction price wound up being much less than . . . it otherwise would have gone for. And that's money that came directly out of the Treasury, money the Treasury would have gotten that we spent in order to be able to have that open access condition. . . . . We've heard a lot of rhetoric during the AT&T/T-Mobile merger discussion about the importance of robust competition among four or five national wireless providers. And that's true with regard to end users and consumers. It's also true with regard to competition for spectrum. The more you limit that competition, the less efficient or less optimal the result will be.

 

What are your thoughts on licensed versus unlicensed spectrum:

 

I think the 2002 Spectrum Policy Task Force Report deals with the question of licensed and unlicensed spectrum better than anything else I've run across. And it points out, as the other panelists have mentioned, that there are benefits to both. And it talks about when you want to use one versus the other. The Task Force Report recommended an exclusive use of a more property rights-based model with regard to the beachfront spectrum because it's extremely scarce. It's in high demand. There are a lot of different entities that may want to use it, and transaction costs are probably fairly low in transferring licenses from one to another. For that to work, you need a good secondary market so that it's not just a one-time allocation . . . but instead becomes a robust market that looks a lot like real property. But unlicensed spectrum is much more useful in the upper band in places where either scarcity is lower because there's less of a use for it or where transaction costs might be a little bit higher. For these reasons, it is a lot harder to use a market-based mechanism in the upper band . . . . The Task Force made clear that what doesn't work is the command and control system. It didn't work for Soviet agriculture. It's not working for traditional spectrum.

 

What are your recommendations for an update or rewrite of the Communications Act:

 

Three points on the Communications Act Update: One, I'm really worried about regulatory arbitrage. Things like Google Fiber not offering voice service in Kansas City.  If Google is going to do that, it should be because they've decided it's an uneconomic business proposition, not because they fear the regulation that comes along with it. Two, I think the statute needs to move the FCC away from a public interest-oriented standard and much more toward traditional antitrust standards. To the extent that the FCC is going to continue to be involved in economic regulation in this area, it needs to recognize that this is a very competitive marketplace, and what it should be looking for are areas where there are market failures and where the market failures are causing actual consumer harm. And if those aren't occurring, I'm not sure the FCC ought to dedicate a lot of its capital toward economic regulation. That allows the Commission to dedicate more capital toward things like universal service. If the FCC is correct that build-out is a problem under Section 706, then the answer seems to me to fund build-out. Things like the Connect America Fund and Mobility Fund, I think, are much more useful dedications of the FCC's time than continuing to tinker around with net neutrality rules.

 

Professor Gus Hurwitz

 

What is the most important priority for the FCC:

 

It is not network neutrality, despite the fact that that's where most people in the popular world focus their attention. It's not a serious priority in many ways . . . Trying to balance the competing needs of the serious social services that communications platforms enable with the challenge of the economic provision of those services: Those are two divergent goals and the FCC needs to figure out how to converge them. The incentive auction and universal service, these all go to this basic challenge.

 

What do you see happening post-Verizon:

 

Network neutrality is in many ways an albatross. Chairman Wheeler, I don't think, wants to have it weighing him down. The IP transition is a much more meaty, substantive area to focus on. And I think that the approach to net neutrality we are seeing evolve is a rulemaking to provide some basic rules for the road that will then be filled in on a case-by-case basis. And that's exactly what needs to be done . . . . In the initial Comcast network neutrality challenge, the FCC had previously said Section 706 didn't apply. So the FCC had previously tied its hands. What the rulemaking needs to do is provide some notice of what the legal framework for analysis is going to be, what the legal basis for the FCC taking action will be, and what the contours for the rules of the road will be so that the agency can then avoid fair notice challenges and APA challenges to the network neutrality question. On the broader question of what the ultimate scope of 706 is, under current administrative law, the Chevron doctrine, and City of Arlington, it is incredibly broad, and the FCC will get substantial deference in determining the scope of its jurisdiction. And the biggest bumps ahead could very well be between the FCC and FTC in data security and privacy issues.

 

On the pure 706 question and the question of the 706(b) report, the D.C. Circuit noted the awkward timing or peculiar timing of the FCC's finding.  I'm not sure if under current deference doctrine that really would have swayed the D.C. Circuit's outcome even had the FCC not had that finding. The agency will get very broad deference.  So for those who might be involved with drafting legislation here, really greater specificity for what the requirements for the agency are will be an essential characteristic of any legislation.  If there's an opportunity for deference, the agency very likely will be able to make use of it.

 

What rules regarding spectrum caps or screens should be applied to the upcoming auctions:

 

For spectrum caps and screens, my answer is simple: Antitrust, antitrust, antitrust.  Screens are a traditional approach in antitrust analysis to creating safe harbors. We can say we're not concerned about activity below this threshold. So if a screen is being used to create a safe harbor, that's a sound approach . . . We want to say ordinary antitrust, ordinary competition, ordinary economic principles apply.  So we then will look at how much spectrum individual actors control and ask does this raise competition concerns?  

 

The greatest goal I think that we should have for spectrum ownership is a liquid, vibrant, secondary market where we don't have this one-off, one-shot opportunity to sell your spectrum that gives everyone an opportunity to collude or come together and say, okay, this is our one chance, or we don't want to participate, or we only are going to participate with some informal agreement if we get this amount of money out of the process. We should be thinking about how to transition to a more liquid secondary market for spectrum. 

 

What are your thoughts on licensed versus unlicensed spectrum:

 

One of the really interesting questions left unanswered in the Spectrum Policy Task Force Report is what happens when unlicensed spectrum becomes congested, when there suddenly is a need to have it be managed by a single entity or arguably to privatize it. And that poses a really interesting question moving forward if we are going to rely more heavily on unlicensed spectrum and if we are going to see unlicensed spectrum being more substantially developed . . . .  One of the most important shifts over the last decade or so in this area is software-defined radio and the ability to put products out which are not assigned to fixed bands based upon the silicon design -- the actual chips in the product -- which fundamentally changes the nature of how we use spectrum.

 

What are your recommendations for an update or rewrite of the Communications Act:

 

We need to be thinking long term about rationalizing large portions of the FCC's functions with other agencies. The FCC's antitrust mission is largely duplicative with the FTC, and the FCC shares a lot of functions with NTIA. We've seen over the course of history with the CAB and the ICC that we ultimately dissolved those bodies and rationalized their functions with other agencies. I don't know that we need to dissolve the FCC, but we should be thinking about finding redundancies, and finding ways to rationalize the FCC's functions with other entities. And particularly in the case of shared authority with the FTC regarding competition, Section 706, data security, and privacy issues. As part of its current mission, the FCC currently serves number of very important goals, including the social services and social functions that we've discussed like universal service and similar ilk, and these are all very important. There should be a body that continues to focus on these, and it could be the FCC, but we should disambiguate the antitrust and purely economic questions with the social program oriented questions while not accentuating or to diminishing the importance of either . . .  The sort of processes and problems that we're addressing today -- network neutrality, Aereo, retransmission consent -- many of the debates in this area are basically about consumers being caught in the middle between content producers and distributors.  There is a similar set of problems that we're seeing over and over and over. We're approaching them with different groups, different regulatory powers, and different statutes. We should take a step back and try and think seriously: Is there a holistic approach to addressing these problems?  Are these problems that we need to address from a holistic perspective?

 

Shawn Chang

 

What is the most important priority for the FCC:

 

I agree in terms of the incentive auction being Priorities 1, 2 and 3, but I will disagree on the point that net neutrality is not a priority for the FCC. In fact, I think we are all eagerly anticipating the FCC's interpretation and the use of its Section 706 authority as it applies to the broadband providers.

 

What do you see happening post-Verizon:

 

I find it interesting that what the FCC tried to do back in 2010 under Chairman Genachowski was propose a very broad set of guiding principles or guiding rules that would be applied on a case-by-case basis. I don't see how that was different than the vision that everyone has agreed upon, and, of course, he had the support of the public interest community and major providers. The only entity that challenged the rules based on the FCC's basis of authority, not because of the rules themselves, was Verizon, and look where we are today. And so I think, certainly, that the FCC should move beyond just net neutrality to look at Section 706 as a whole. It is a very broad grant of authority.  The courts are likely going to give the FCC plenty of deference.

 

What is your reaction to the Commission's finding that broadband was not being deployed on a reasonable and timely basis:

 

I think [the scope of 706] is a complicated issue that requires a lot of unpacking. The court looked at 706(a) and found the FCC had authority there as well.  So I don't think it's completely relevant today whether or not there is a finding of efficient deployment.

 

What rules regarding spectrum caps or screens should be applied to the upcoming auctions:

 

I find it really interesting that people complain about the screen not offering the type of certainty they need for approaching the FCC for transaction reviews on it and so forth, but at the same time, wanting the type of flexibility that a spectrum cap otherwise wouldn't be able to provide.

 

On the auctions, I'm one of the people who is cautiously optimistic about the incentive auction. I think the bipartisan basis will construct legislation that builds in a couple other auctions so that we can meet revenue requirements and we can also keep making sure that spectrum is becoming available and we don't have to wait for the outcome of this uncertain, unprecedented auction to take place before we can actually get spectrum to use. And the effort on a bipartisan basis that this committee has constructed in terms of the 1755 to 1780 band, which ensures that the band becomes available for the AWS-3 band auction is a good example of the commitment that we all have to make to ensure that high quality spectrum is put to use.

 

What are your thoughts on licensed versus unlicensed spectrum:

 

We are already facing an unlicensed spectrum crunch, and that's why we are looking at the 5 gigahertz band and the need to open up additional bands so we can provide gigahertz for unlicensed use, and also relieve congestion that we are experiencing already in the 2 gigahertz band . . . that's a bipartisan effort.

 

Based on the basic functions of regulatory agencies -- economic, societal, regulatory -- where would those be placed and would there be an FCC and what would it look like:

 

It seems to me that we're hearing two different things: One panelist talking about the importance of social services and social functions that the FCC should be able to fulfill; the other placing more of an emphasis on an antitrust-based approach to regulation in which the FCC should be able to step in only to the extent that there's actual consumer harm as a result of specific market failure. I think the FCC certainly has those social functions that cannot be executed based on antitrust authority alone, and that's why we do have a public interest standard. And the public interest standard, at least my boss believes, is an important element of any kind of update going forward.

 

 

A PDF of the full transcript of Panel II, "A New FCC and A New Communications Act: Perspectives from Academia, the Hill, and the FCC," is here.

 

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