When President Clinton used an electronic pen to sign the Telecommunications Act of 1996, the country assumed that he was unleashing tremendous telecom competition that would help consumers across America. The dream was that local phone service would be up for grabs, no longer controlled by a single incumbent, that the Bell companies would be allowed to provide competitive long distance services, and that the cable companies would be allowed into the phone business — and that as a result of all this jostling we'd all be better off. The New York Timesreported that the act was "expected to unleash a wave of mergers and acquisitions but eventually knock down traditional monopolies in local telephone service and cable television."
[#contributor: /contributors/5932739a2a990b06268aab71]|||Susan Crawford is the (Visiting) Stanton Professor of the First Amendment at Harvard's Kennedy School and a Visiting Professor at Harvard Law School. She was a board member of The Internet Corporation for Assigned Names and Numbers (ICANN) from 2005-2008, and served as Special Assistant to the President for Science, Technology, and Innovation Policy in 2009.|||
The Times got the first part right but not the second. Today, as phone, video, and broadcast services have become merely bits passing over a wire, Congress's intentions embodied in the 1996 Act have been completely subverted. Through a wave of mergers and years of litigation (helped along by some gymnastic labeling fiestas by the FCC), new companies have found it almost impossible to compete.
We have Ma Cell instead of Ma Bell, with just two companies — AT&T and Verizon — utterly dominant, their vast spectrum holdings, control over handset manufacturing, and provision of backhaul adding up to moats around their businesses that Sprint and T-Mobile can't cross. We have a handful of cable incumbents — chiefly Comcast and Time Warner — controlling high-speed wired access to everything at whatever prices they want to charge.
Given this context, and its direct impact on consumers' pocketbooks and innovation in America, you'd think that Congress would want to have an empowered regulator able to do something to protect the country from the rational, profit-seeking depredations of our new generation of monopolists.
Instead, the House Republicans are going in exactly the opposite direction. They're lining up big-company support to pushlegislation early next week on the floor of the House that would gut the FCC. The bill, H.R. 3309, is called the "FCC Process Reform Act of 2011."
As Rep. Henry Waxman, the Ranking Member of the House Energy and Commerce Committeemakes clear, the bill will disable the FCC, not reform it.
It does this by creating a special set of vague and novel procedural hurdles for the FCC to which no other agency is subject and that will require another decade of litigation to clarify. It does this by significantly reducing the FCC's ability to take the public interest into account when considering mergers. And it provides innumerable additional routes for mischievous litigation, making every single one of the FCC's regulatory analyses in support of a new rule — and not just the rule itself — subject to judicial review. Don't like the FCC's suggestion that public interest values are worth taking into account? Sue, and paralyze the Commission.
To be sure, it’s a job-creation bill. The Congressional Budget Office estimates that twenty additional government employees will be needed to handle the new rulemaking and reporting requirements of the legislation, at a cost of $26 million between 2013 and 2017. And the bill will trigger lots of lobbyist hours as everyone scrambles to figure out what the heck it means.
Although the bill’s proponents say they aim to make things work more quickly at the FCC, the legislation will have the opposite effect: it will make it very difficult for the FCC to deal with any of the real-time telecom problems the country faces. What the Republicans seem to want, at bottom, is to grant the giant companies that sell us basic communications capacity — an essential utility for the 21st century — the ability to throw sand in the works at every opportunity.
This story is much like the banking regulatory narrative: The huge companies that control banking in this country avoided any real constraint on their businesses, with public harm the result. Democrats and Republicans can all agree that free markets are a good idea, but when it comes to the necessary framework for those markets — a functioning commodity banking system or reliable, universal, standardized, low-cost communications capacity — the Republicans go haywire and demand that everything be deregulated.
Surely we have learned our lesson in the banking context. Surely we shouldn't slip farther behind as a country to serve the interests of a few large companies.
In 1901, Republican Theodore Roosevelt took on another utility industry that had consolidated and was gouging Americans. "The railway,” he said, “is a public servant. Its rates should be just to and open to all shippers alike. The government should see to it that within its jurisdiction this is so and should provide a speedy, inexpensive, and effective remedy to that end."
Leadership within the FCC and oversight by Congress will provide those remedies. Strangling the FCC's ability to regulate will drive us backwards.
Photo: Vice President Al Gore looks on as President Clinton uses an electronic pen to sign the Telecommunications Reform Act, Thursday Feb. 8, 1996 at the Library of Congress in Washington. With high-tech fanfare and a touch of humor, the president signed the bill to revolutionize the way Americans get telephone and computer services. (AP Photo/Doug Mills)
Opinion Editor: John C. Abell @johncabell
