Thursday, December 16, 2004
A Starting Point for the Next Telecom Act
The below was my column in the November/December issue of VON Magazine:
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A Starting Point for the Next Telecom Act
How can the IP Communications Industry avoid regulatory disaster?
I’m surprised that The Telecommunications Act of 1996 wasn’t called the “6991 fo Tca Snoitacinummocelet,” because everything else about it was written as if its authors were looking in the rear view mirror. The hairpin turn looming in the windshield, the Internet, was ignored. The Federal Communications Commission was put in the driver’s seat, charged with stepping on the accelerator by writing rules to implement the Act and tromping on the brake to enforce them.
The FCC’s Official Mission is to “ensure that the American people have available–at reasonable costs and without discrimination–rapid, efficient, nation- and world-wide communication services; whether by radio, television, wire, satellite, or cable.” I do not see anything about Janet Jackson’s anatomy, Howard Stern’s subject matter or Rupert Murdoch’s empire in that mission. I don’t see where the broadcast flag (and mandatory mechanisms that device makers must build in to implement it) fits. The FCC suffers from such mission creep that my VON Magazine co-columnist Bob Frankston calls it the Federal Speech Commission.
Layers vs. Chaos
If we adopt a layered view that is consistent with Internet architecture, the FCC Mission’s phrase, “radio, television, wire, satellite, or cable,” refers to four transmission media and one application, television, which can be carried over any of the other four. Looking again, maybe there are two applications, television and radio, which can be carried over wire, satellite, cable and, uh, radio. Can it be that the application called telephony is not in the FCC’s Official Mission? Can it be that other forms of physical connectivity besides radio, wire, satellite and cable, are outside the FCC’s mission? Fiber, for example, is not wire and not cable. Very confusing.
Internally the FCC is matrix management mayhem, a bundle of bumbling bureaus with a caboodle of conflicting charters. For example, suppose your Inter-net telephony bill from your cable TV provider is unfairly high; would you contact the FCC’s Media Bureau, the Enforcement Bureau, the Wireline Competition Bureau or the Consumer (and Government) Affairs Bureau? Myself, I have friends in the FCC I can ask, but Jack Nascar and Jill Securitymom might be justifiably confused.
The logical thing would be to haul that jalopy to the junkyard and start over. Of course it’ll never happen. But even FCC Chairman Michael Powell has moments of sublime reverie where he imagines telecom regulation without the FCC. Recently he fantasized that service providers would voluntarily preserve their customers’ Freedom to Access Content, Freedom to Attach Devices, Freedom to Use Applications and Freedom to Obtain Service Plan Information. Nice, but if your service provider needs to decide between making money and these voluntary “freedoms” it certainly won’t agonize very long.
Layered Regulations for Layered Architecture
Richard Whitt, Senior Director of Global Policy and Planning at MCI, outlines an approach that is more consistent with the Internet “any application over any network” architecture in an MCI essay called “A Horizontal Leap Forward.” He proposes a new section of the Telecom Act for Congress to pass, which would apply to all communications that use the Internet Protocol. This new section would regulate DSL, Cable, Wireless and other physical access platforms according to a minimal set of principles. All physical access providers would be regulated by the same FCC entity. They would have consistent regulatory obligations to provide interconnection, Universal Service, emergency connectivity (e.g., 911), wiretapping for law enforcement purposes, and access for people with disabilities. There would be a “market power” test to determine whether a monopolistic provider must offer wholesale network elements to weaker competitors.
Meanwhile, most applications (such as Voice over IP, instant messaging, email, e-commerce, etc.) would fall outside of the FCC’s purview. They should–there’s no need to regulate applications that aren’t tied to specific networks.
This simpler, more consistent regulatory schema would give providers of Internet connectivity a huge advantage–instead of lawyers they could hire innovators and engineers. The complex mess of older telecom law would become less and less relevant as applications that are tied to special purpose networks wane. Older sections of the law and vertically integrated networks would ride into the sunset together. The FCC would get back to basics.
Whitt’s proposal is not perfect; I disagree with some of the specifics. Nor is it likely to move through Washington, DC’s sausage factory in its ideal form. There is too much at stake for incumbents to sit on the sidelines–beef, pork and other ingredients will surely be added. But the current abomination must go, and Whitt’s layered approach provides a robust, principled, consistent and forward-looking starting point.
-------
A Starting Point for the Next Telecom Act
How can the IP Communications Industry avoid regulatory disaster?
I’m surprised that The Telecommunications Act of 1996 wasn’t called the “6991 fo Tca Snoitacinummocelet,” because everything else about it was written as if its authors were looking in the rear view mirror. The hairpin turn looming in the windshield, the Internet, was ignored. The Federal Communications Commission was put in the driver’s seat, charged with stepping on the accelerator by writing rules to implement the Act and tromping on the brake to enforce them.
The FCC’s Official Mission is to “ensure that the American people have available–at reasonable costs and without discrimination–rapid, efficient, nation- and world-wide communication services; whether by radio, television, wire, satellite, or cable.” I do not see anything about Janet Jackson’s anatomy, Howard Stern’s subject matter or Rupert Murdoch’s empire in that mission. I don’t see where the broadcast flag (and mandatory mechanisms that device makers must build in to implement it) fits. The FCC suffers from such mission creep that my VON Magazine co-columnist Bob Frankston calls it the Federal Speech Commission.
Layers vs. Chaos
If we adopt a layered view that is consistent with Internet architecture, the FCC Mission’s phrase, “radio, television, wire, satellite, or cable,” refers to four transmission media and one application, television, which can be carried over any of the other four. Looking again, maybe there are two applications, television and radio, which can be carried over wire, satellite, cable and, uh, radio. Can it be that the application called telephony is not in the FCC’s Official Mission? Can it be that other forms of physical connectivity besides radio, wire, satellite and cable, are outside the FCC’s mission? Fiber, for example, is not wire and not cable. Very confusing.
Internally the FCC is matrix management mayhem, a bundle of bumbling bureaus with a caboodle of conflicting charters. For example, suppose your Inter-net telephony bill from your cable TV provider is unfairly high; would you contact the FCC’s Media Bureau, the Enforcement Bureau, the Wireline Competition Bureau or the Consumer (and Government) Affairs Bureau? Myself, I have friends in the FCC I can ask, but Jack Nascar and Jill Securitymom might be justifiably confused.
The logical thing would be to haul that jalopy to the junkyard and start over. Of course it’ll never happen. But even FCC Chairman Michael Powell has moments of sublime reverie where he imagines telecom regulation without the FCC. Recently he fantasized that service providers would voluntarily preserve their customers’ Freedom to Access Content, Freedom to Attach Devices, Freedom to Use Applications and Freedom to Obtain Service Plan Information. Nice, but if your service provider needs to decide between making money and these voluntary “freedoms” it certainly won’t agonize very long.
Layered Regulations for Layered Architecture
Richard Whitt, Senior Director of Global Policy and Planning at MCI, outlines an approach that is more consistent with the Internet “any application over any network” architecture in an MCI essay called “A Horizontal Leap Forward.” He proposes a new section of the Telecom Act for Congress to pass, which would apply to all communications that use the Internet Protocol. This new section would regulate DSL, Cable, Wireless and other physical access platforms according to a minimal set of principles. All physical access providers would be regulated by the same FCC entity. They would have consistent regulatory obligations to provide interconnection, Universal Service, emergency connectivity (e.g., 911), wiretapping for law enforcement purposes, and access for people with disabilities. There would be a “market power” test to determine whether a monopolistic provider must offer wholesale network elements to weaker competitors.
Meanwhile, most applications (such as Voice over IP, instant messaging, email, e-commerce, etc.) would fall outside of the FCC’s purview. They should–there’s no need to regulate applications that aren’t tied to specific networks.
This simpler, more consistent regulatory schema would give providers of Internet connectivity a huge advantage–instead of lawyers they could hire innovators and engineers. The complex mess of older telecom law would become less and less relevant as applications that are tied to special purpose networks wane. Older sections of the law and vertically integrated networks would ride into the sunset together. The FCC would get back to basics.
Whitt’s proposal is not perfect; I disagree with some of the specifics. Nor is it likely to move through Washington, DC’s sausage factory in its ideal form. There is too much at stake for incumbents to sit on the sidelines–beef, pork and other ingredients will surely be added. But the current abomination must go, and Whitt’s layered approach provides a robust, principled, consistent and forward-looking starting point.
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