Federal Communications Commission Archives - Shopfloor

Internet Regulation is a Policy Decision that Congress Should Make

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Manufacturers appreciate efforts at the Federal Communications Commission (FCC) to bring closure to the debate over regulating the Internet. Providing certainty in this area will encourage the deployment of new broadband services and the jobs that go with them. But  comments today by FCC Commissioner Julius Genachowski and his plan for the Commission to adopt a Net Neutrality Order at its December 21st Open Meeting just create more uncertainty. We share the views of Commissioner Meredith Attwell Baker that the decision of “whether the Internet should be regulated is a decision best left to the directly elected representatives of the American people.”

Ensuring the deployment of new broadband lines and high-speed wireless data services is critical to manufacturers across the nation – these are the companies that can create the jobs we need to strengthen our economy. In the end, Congress needs to step in and adopt a comprehensive broadband policy, and it should be aimed at the deployment of services, open access and smart resource allocation, including policies that:

  • Remove barriers to entry that prevent broadband providers from offering high-speed information services to homes and businesses;
  • Balance the need for regulations against the potential to dampen private industry’s incentive to invest in broadband technology;
  • Encourage federal and state regulators to monitor the rollout of broadband services;
  • Support a federal framework to ensure fair, technology-neutral competition for all providers; and
  • Allow for the continued public/private collaboration to improve the security of the network through incentive-based legislative and regulatory tools.

In the words of Commissioner Baker, “We all believe in an open Internet.  It is open today, it is fast moving, and it serves as a vibrant growth engine for our economy and job creation.  Let’s not rush to undermine it.”

Dorothy Coleman is vice president of tax and domestic economic policy for the National Association of Manufacturers.

The Broadband Rubicon

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When Julius Caesar crossed the Rubicon in 49 AD with his legions in tow, defying the Senates’ prohibitions on generals entering Italy proper with their troops, he uttered the famous words “the die is cast” (alea iacta est, to be specific).  Caesar being Caesar, he probably did so through gritted teeth, his sword to his breast, with his flinty stare focused firmly on the Capitoline Hill.

Two thousand years later a different die was cast, by another Julius with his eye on another Capitol Hill crossing his own Rubicon, and defying the will of another Senate.  At today’s Open FCC Meeting, Chairman Julius Genachowski led the Commission in voting in favor of moving forward with opening a proceeding that will inevitably redefine how the FCC regulates broadband services by imposing common carrier rules to the Internet.

Of course, what’s at stake with the roll of today’s die is a bit different from Caesar’s toss: with Old Julius, it was only the fate of Roman Empire.  Today’s stakes are far bigger – the fate of the nation’s information structure.  Why is this bigger you ask?  Let’s put it this way: the manufacturers who build the networks, the manufacturers who own the networks, the manufacturers who rely on new networks being built, could all see up to $62 billion in broadband investment dry up, costing over half-a million jobs.

According to a study released by New York Law School, the report estimates that if New Julius’s “Third Way” broadband plan is instituted, broadband providers and related industries may cut their investments by 10 percent to 30 percent from 2010 to 2015 in response to additional regulation. At 30 percent, the economy might sustain an $80 billion hit, according to Charles Davidson, director of the law school’s Advanced Communications Law & Policy Institute, which released the report on June 16.

What about the pesky Senate?  New Julius is facing his own dilemma as 282 Members of Congress, including 77 Democrats demanded the FCC leave its troops at the banks of the…er…drop its plan to reclassify broadband and allow Congress to do what it was elected to do. But, hey, Congress knew about the National Broadband Plan, and that was blessed by the President. Who we hear was elected by lots of people, too.

Unless Congress decides to defund the FCC, there will be a pretty quick process in which rounds of comments, reply comments, notices of proposed rules, and more comments are flitted through in less than six months.  In fact, the first round of comments are due July 15, reply comments due August 12. And again, unless Congress defunds the FCC, it’s highly probable that New Julius will get his way, only to find that the litigious Visigoths of industry will be banging down the doors of the Commission.

How is this going to end?  Hopefully better for New Julius than it did for Old Julius.  We’d be happy if he just crossed back over the Potomac and dropped his cockamamie plan over the Memorial Bridge.

FCC Set To Bootstrap Its Own Internet Regulatory Power

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Internet denizens across America will be watching today as the FCC takes the first big step in granting itself the authority to regulate the Internet.  An act, we’d like to add, that is something many manufacturers will be viewing with the same interest as, say, watching someone eat their own foot.  By that, I mean mostly in horror, aghast that such an overt exercise of power would be done at all, figuratively and literally cannibalizing our nation’s best means of moving forward.

This all comes in the wake of the DC Circuit’s Comcast decision that held the FCC didn’t have the authority to chastise Comcast for violating rules that were never actually…um…rules. FCC Chairman Julius Genachowski has been wracking the collective brains of his attorneys to figure out how he can get that authority.  Without having to go to Congress, that is, because they might disagree.  Well, that’s not true; they do disagree.  As a matter of fact, more than 77 Democratic Members of Congress – including Commerce Chairman Emeritus John Dingell who authored the Telecom Act of 1996 – have publicly disagreed with Chmn. Genachowski and asked him not to move forward with this scheme.

It seems as if Congress has this quaint idea that a light regulatory touch on the Internet might have something to do with its phenomenal success and growth, and that regulating it will just stifle innovation and economic growth. 

The FCC extravaganza today is the first salvo in the war: The Commission will publicly ponder the issue and then vote on whether or not they’ll issue a Notice of Inquiry to begin the process of locking down the Internet.  Of course, it’ll pass on party lines by a vote of 3-2 which, for an esoteric issue, will post a higher score than most World Cup matches this week.

Here’s the info for today’s meeting.

Phew, It’s About Time We Were Regulated!

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In the oddest twist of fate, manufacturers, telecoms and consumers are all breathing a sigh of relief upon hearing that both the House and Senate Commerce Committees are contemplating a rewrite of telecommunications law to acknowledge the existence of the Internet. Ah, sweet, sweet regulation!

As you’ll remember, the FCC received a judicial noogie* from the DC Circuit when it ruled the FCC didn’t have the authority to chastise Comcast for steering Internet bandwidth away from poor, defenseless children who were stealing movies and music on BitTorrent, and instead diverting it to evil doers implicated in healthcare, education, global commerce and other nefarious, high-bandwidth practices. Nevertheless, FCC Julius Genachowski decided that he’d give himself the authority to regulate the Internet by rejiggering Title II of the Telecom Act by reclassifying it as a telecommunications service, as opposed to a data service.

Well, following hot on the heels of letters from 74 House Democrats and 37 Senate Republicans, House Energy and Commerce Chairman Henry Waxman and Senate Commerce Chair John Rockefeller announced that they’ll develop proposals to update the Communications Act, starting in June.

Gentlemen, you get the humble thanks of a grateful manufacturing sector. The FCC’s proposed boot-strapping of regulatory authority would’ve only served to chill broadband deployment and investment in the telecom sector, with manufacturers and consumers getting the short end of the stick. Of course, there’ll be concern over whether or not net neutrality provisions will be foisted upon network managers, but at least through a legitimate legislative process, everyone will have the opportunity to be heard. And Mr. Chairmen, you have our deepest appreciation.

* It’s a legal term of art. Really, it’s in Black’s Law Dictionary.

To Combat Childhood Obesity, Let’s Load Up on Government

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Today the White House’s Childhood Obesity Task Force released its action plan “to solve the problem of childhood obesity within a generation.” First Lady Michelle Obama held a media event to announce the report, and adviser Melody Barnes blogged it in a post, “Take a Look at Our Action Plan to Solve the Problem of Childhood Obesity.”

The report is posted at www.letsmove.gov, with this description:

In February, First Lady Michelle Obama launched the Let’s Move! campaign to solve the childhood obesity epidemic within a generation. As part of this effort, President Barack Obama established the Task Force on Childhood Obesity to develop and implement an interagency plan that details a coordinated strategy, identifies key benchmarks, and outlines an action plan to end the problem of childhood obesity within a generation. The action plan defines the goal of ending childhood obesity in a generation as returning to a childhood obesity rate of just 5 percent by 2030, which was the rate before childhood obesity first began to rise in the late 1970s. In total, the report presents a series of 70 specific recommendations, many of which can be implemented right away.

The recommendations do flow logically, from the voluntary to coercive. For example, in the section “Empowering Parents and Caregivers”:

Recommendation 2.5: The food and beverage industry should extend its self-regulatory program to cover all forms of marketing to children, and food retailers should avoid in-store marketing that promotes unhealthy products to children.
Recommendation 2.6: All media and entertainment companies should limit the licensing of their popular characters to food and beverage products that are healthy and consistent with science-based nutrition standards
Recommendation 2.7: The food and beverage industry and the media and entertainment industry should jointly adopt meaningful, uniform nutrition standards for marketing food and beverages to children, as well as a uniform standard for what constitutes marketing to children.
Recommendation 2.8: Industry should provide technology to help consumers distinguish between advertisements for healthy and unhealthy foods and to limit their children’s exposure to unhealthy food advertisements.
Recommendation 2.9: If voluntary efforts to limit the marketing of less healthy foods and beverages to children do not yield substantial results, the FCC could consider revisiting and modernizing rules on commercial time during children’s programming.

“Revisiting and modernizing…” Why settle for one euphemism for expanding government control of the marketplace when you can use two?

FCC: It’s my Third-Way or the Highway.

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So now that the courts have said that the FCC doesn’t have the authority to regulate the Internet under the Comcast decision, Chairmen Waxman and Rockefeller sent FCC Chairman Julius Genachowski a nice note saying they’re too busy to determine what needs to be done, so Julius should go on ahead without them and give himself the authority to start serving up the net neutrality. Despite telling The Washington Post that they wouldn’t dream of starting in as it would ruin their appetite…

The sources said Genachowski thinks “reclassifying” broadband to allow for more regulation would be overly burdensome on carriers and would deter investment.

…FCC Chairman Genachowski told his chefs to start whipping up a banquet and ring the dinner gong on Thursday. That’s when we all found out (and the WaPo to their great chagrin) that net neutrality was not only back on the menu, but it was the main course.

The ethics of using disinformation aside (although I guess we are technically at war…), the FCC’s new Rube Goldberg plan posing as a “Third Way” to regulate without the express consent of Congress seems like a somewhat obvious power grab to effectuate a pretty specific political end, sound network management and engineering principles be damned.

Who knew this would leave us all longing for the days (and weeks, and months, and years) when the 1996 Telecom Act was worked out, where Congress actually decided what the FCC’s authority was? And not to get too nostalgic, but that was when Congress intentionally excluded broadband Internet access from Title II –- choosing not to travel down the Third-Way highway.

FCC: The Internet is Like a Big Phone and We’re in Charge

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I was all excited when I read Monday’s Washington Post article reporting that FCC Chairman Julius Genachowski intended to keep broadband services deregulated in light of the DC Circuit’s ruling in Comcast v. FCC, which held the Commission exceeded its authority in slapping Comcast on the wrists for monkeying with people’s ability to download pirated movies and other illegal content. That meant I didn’t have to worry about the FCC hanging the big ol’ albatross of shoe-horned regulation around the Internet’s neck. Instead, I was actually going to use the extra time to focus on –- ironically enough — cracking down on people’s ability to download pirated movies and other illegal content.

I guess hunting down pirates is going to have to be left to the Russian Navy for the time being, as Chairman Genachowski let it be known Wednesday that the FCC will attempt to reclassify the Internet as a telecom service, essentially Gerry-rigging the 19th century telephone paradigm to fit the Internet.

Why the turnaround? Maybe the Commission was feeling lonely, since the financial services sector is getting all the attention. Perhaps the FCC thought that Congress wouldn’t understand how important it is to start regulating a perfectly healthy market, absurd as that might seem. Or maybe there was just too much unbridled investment going on in the telecom sector. No matter what they’re thinking at the FCC, one thing is certain: Manufacturers are going to suffer as new regulation will slow down deployment of the big fat broadband pipes they need to rebuild their businesses and create jobs in this economic “recovery.”

News coverage …

FCC, FTC, Comments and Net Neutrality

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Good roundup piece in PCMag.com on industry and activists’ positions on net neutrality, tied to Monday’s deadline for comments on the Federal Communications Commission’s net neutrality proceedings, “Battle Lines Drawn as Net Neutrality Comments Roll In.”

AT&T’s spokesman on the issue provides the necessary context and a good argument for regulatory restraint.

Jim Cicconi, senior executive vice president for external and legislative affairs at AT&T, accused supporters of manufacturing a threat and failing to identify any real problem that would make net neutrality rules necessary.

“Over and over again, we hear [supporters] cite the single instance where the FCC felt compelled to take action, namely the Comcast-BitTorrent case,” Cicconi said. “But one example does not a compelling case make. Indeed, thanks to the DC Circuit, the Comcast case ironically now stands for the opposite proposition—namely, that government must have compelling reasons if it’s going to substitute its judgment for that of the free market, and when it acts it must do so only with clear legislative authority.”

PCMag.com’s reporter Chloe Albanesius participated in the reporters’ conference call with the NAM, U.S. Chamber and TechAmerica, the trade group.

The FCC needs to reflect and “should refrain from moving forward absent clear congressional authority,” according to NAM’s Marc-Anthony Signorino. The FCC should focus on “fostering innovation and job growth,” he said.

In related news, the Senate Small Business Committee today holds a hearing, ““Connecting Main Street to the World: Federal Efforts to Expand Small Business Internet Access.” FCC Chairman Julius Genachowski testifies.

Restraint Needed in FCC Regulation over Internet

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From The Hill, “Big business groups warn FCC to back off of efforts to push net neutrality plans“:

“The Commission should refrain from moving forward without congressional authority,” said Marc-Anthony Signorino, director of technology policy for the National Association of Manufacturers.

He said the FCC should quickly implement its plan to have a technical advisory board composed of engineers who can “examine the core issues without getting into politics.”

“Had that been in place, the whole Comcast-BitTorrent thing would never have happened,” he said.

The NAM, U.S. Chamber of Commerce and TechAmerica held a conference call with reporters in anticipation of filings with the FCC on the open Internet proceedings.

Elsewhere, Coleman Bazelon of The Brattle Group has completed an economic analysis of the effects of FCC imposition of net neutrality mandates on the broadband industry, “The Employment and Economic Impacts of Network Neutrality Regulation: An Empirical Analysis.” Bazelon identifies economic harm that would result from new regs.

If the network neutrality regulations being considered by the FCC were implemented:
• Revenue growth in the broadband sector could slow by about one-sixth over the next
• Broadband sector jobs lost could be expected to total 14,217 in 2011, growing to 342,065
jobs by 2020;
• Economy-wide, 65,404 jobs could be put in jeopardy in 2011, with the total economywide
impact growing to 1,452,943 jobs affected by 2020 due to reduced revenue growth
in the broadband sector.

Mobile broadband, the fastest growing segment of the market, would suffer the largest impact, the analysis found.

Bazelon’s research was sponsored by Mobile Future (www.mobilefuture.org).

UPDATE (5:10 p.m.): About The Hill’s headline: The NAM is a big group that represents business, but it is not a big-business group. We have thousands of small and medium-sized companies as members, too. And contrary to some people’s perceptions, net neutrality isn’t just a concern for the big telecom companies. As Broadcasting and Cable reports, citing Marc-Anthony:

Why is the National Association of Manufacturers weighing in? He said it is aw “huge issue” for a number of his members, including companies that manage networks, that make fiber, that dig the trenches, and that make the tools that dig the trenches that hold the fiber.

He also said the businesses are consumers of broadband and want the fast speeds and access that could be discouraged by too heavy a regulatory hand. Essentially, the groups argue the deployment is better driven by the marketplace of investment and innovation, with the regulatory rules of the road explicitly laid out by Congress.

Chaos, Creativity, Innovation and the Urge to Regulate

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Robert M. McDowell, a member of the Federal Communications Commission, writes in The Washington Post today on net neutrality, “Hands off the Internet.”

Last fall, over dissenting votes from Commissioner Meredith Attwell Baker and me, the FCC proposed rules to regulate high-speed Internet. Before embarking on any regulatory journey, it is critical for the government to ask and answer: What exactly is broken that only the government can fix?

Curiously, the commission proposed rules even though studies by the FCC and the Federal Trade Commission found no evidence of market failure. And when the Justice and Commerce departments filed comments with the FCC in January, neither provided evidence of concentrations and abuses of market power in the broadband arena. To the contrary, the Justice Department sounded optimistic about the competitiveness of the broadband market. It even warned against imposing new regulations “to avoid stifling the infrastructure investments needed to expand broadband access.”

Nonetheless, the FCC may still consider imposing early-20th-century vintage “common carrier” regulations on 21st-century broadband technologies. One result of the new rules could be to make it harder for the operators of broadband “pipes” to build “smart” networks, which offer connectivity and other services or products.

More curiously, the commission proposed the equivalent of new rules even though the commission had no statutory authority to regulate the Internet, or apply “principles” to guide development of the Internet, i.e., regulate the Internet. That’s another reason the U.S. Court of Appeals for the D.C. Circuit’s ruling striking down the FCC’s scheme is beneficial: It’s a reminder to executive branch agencies that are created to perform administrative and regulatory functions. They DO NOT make policy. That’s the responsibility of Congress, the elected legislative branch of government.

The Post’s business columnist, Steven Perlstein, attacks the D.C. Circuit for upholding this separation of powers because it restrains the reach of federal regulators. “Regulatory failure? Blame the D.C. Circuit,” is  a good column if you believe in liberating the regulatory state to do what it was created to do: Serve Steven Perlstein’s view of the world.