Thursday, May 27, 2010

Summary of "The FCC’s Authority Over Broadband Access"

[Update: the video and transcripts for Panel 1 and Panel 2 are now posted]

Today I attended the "The FCC’s Authority Over Broadband Access" event in DC. These DC policy events tend to have more talking points than I'm willing to tolerate, but today's event was both balanced and substantial.

[A disclaimer, this post is fairly hastily written and assumes some deeper background knowledge of some of the terms. I recommend Harold Feld's recent blog post if you find unfamiliar language or concepts in here. Susan Crawford also has good stream-of-discussion notes of the first panel.]

Session 1: The History and Context of the Debate

The first panel was mostly a history of how we got here, hitting many of the points I explored in my post on Freedom to Tinker yesterday, "Regulating and Not Regulating the Internet". The panelists were certainly well qualified. John Nakahata is a former FCC Chief of Staff who lived through many of the relevant policy decisions in the late 1990s. Jessica Rosenworcel is the current Senior Counsel for the Senate Commerce Committee (which has authority over the FCC). John Windhausen is one of her predecessors, former Senior Counsel for the committee, who lived through the 1996 Telecommunications Act.

Nakahata reminded the audience that in the mid-1990s, the administration had proposed a new Title VII to the Communications Act that would have explicitly set policy for broadband. However, this approach never progressed and instead the 1996 Act simply codified a version of the Computer Inquiries "basic"/"enhanced" services distinction in the form of "information"/"telecommunications" services... without explicit reference to the internet. This is a layered model, in opposition to the silo-like approach of the Act's overall structure. He also observed that the 1998 "Stevens Report" (to which Brand X refers extensively) noted that if placing broadband under Title II was too onerous, the FCC could forbear from much of it (essentially what Chairman Genachowski is proposing today -- Nakahata seemed to think this was ironic, but it seems more like evidence of good research and historical consistency on the part of the Charman's office). He also noted that since that time there have been changes in the market -- including the elimination of mandatory unbundling or line-sharing -- that alter the broader policy calculus (presumably toward greater regulatory intervention). Finally, he observed that although there may be limited precedent for defining a separate telecommunications portion of an integrated service, pursing this approach on a large scale would be a revolutionary rather than evolutionary development.

John Windhausen confirmed Nakahta's telling of the 1996 Act's "information"/"telecommunication" service legacy in the Computer Inquiries. He laid out two basic principles which he thought had guided regulation of communications going all the way back to common law: 1) Common Carriage and a non-disciminatory duty to serve of public transport providers and 2) The principle of not regulating the communications that are transported. We are having today a variation of the age-old discussion of where to draw the line between the two. He also noted that some of the ambiguity of the 1996 Act was intentional. Congress sought to defer to an expert agency on the details. He emphasized that his reading of Brand X was that it quite clearly concluded that the categorization of broadband services was up to the determination of the FCC under the Chevron doctrine. He also indicated that the Commission had already demonstrated the possibility of classifying a portion of internet service as a telecommunications service when it issued the wireline broadband order and noted that ISPs could still voluntarily offer the service as a common carrier.

Jessica Rosenworcel didn't speak to the issues in as much depth as her fellow panelists, but such reticence to make public pronouncements is to be expected from an actively employed congressional counsel. That being said, she identified some high-level themes. First, technology changes quickly, making it difficult for regulators let alone legislators to keep up. Second, she observed that in the past ten years there appears to have been an effort to (understandably and logically) treat like services alike, regardless of the different technologies used to provide those services. However, this approach is perennially made difficult because of the "siloed" structure of the Act.

Session 2: The Third Way - What Happens Next?

The second panel was a bit more rough-and-tumble as it addressed the current debate over broadband reclassification. First up was Jim Speta, a Northwestern law professor who has long argued for a more antitrust-like approach to communications law. Second was Susan Crawford, a Cardozo law professor who recently did a stint advising the Obama Administration on technology issues. Third was Yochai Benkler, the primary investigator on the Berkman Center's Next Generation Connectivity Report for the FCC (which I contributed to). Finally, there was Jon Nuechterlein, an attorney for the broadband companies (representing only his personal views), who observed that he was the only practicing lawyer on the panel. Nuechterlein is one of the more fun people to critique, because he is so very smart and often so very wrong. You can see my stream of consciousness thoughts about Jon's position in my tweets.

As the panel began, I predicted: Speta: "antitrust!", Crawford: "infrastructure!", Benkler: "innovation!", Nuechterlein: "determinacy!". I meant that Jim would continue to push his antitrust-oriented view of Communications Act reform, Susan would remind us that broadband is general-purpose infrastructure and not just another market, that Yochai would argue that oversight of the broadband market is essential to all sorts of innovation, and that Jon would emphasize that any attempts to reclassify broadband would result in drawn-out court battles that would cast a pall of indeterminacy over the market, chill investment, and slow growth. I was not disappointed.

However, the panel focused far more on the intricacies of whether reclassification would hold up in court, what arguments would hold the day, and whether there were respectable policy justifications for these arguments. I love that stuff, so I can't complain. Speta started by observing that he thought it likely that reclassification would survive, given the Chevron-based deference articulated in Brand X. However, he was not sure that this was a good policy outcome. In particular, he said that he does not agree with the portion of the Schlick memo that claims that forbearance is difficult to reverse. Thus, he's worried about subsequent regulatory overreach. His prescription is a new governance structure based entirely on analysis of whether one firm has unreasonably foreclosed business of another. Susan agreed that reclassification should prevail, and made her typically well-articulated case for precedentially and empirically grounded government oversight of public communications carriers. She also observed that the reclassification position being advanced is that only the access portion of internet services be classified as a Title II service. Yochai began by observing the across-the-board agreement on the legal viability of reclassification, and provided some comparison points from around the world where defer-to-the-market approaches failed (such as New Zealand).

Then came Nuecterlein. His comments might serve as a clue on what might be included in a petition for reconsideration on the FCC's ultimate reclassification order. I was expecting something new and challenging, but frankly I was disappointed. He of course didn't think that reclassification would survive legal challenge (given that he'd be on the side arguing against it). His argument followed the predictable pattern: There is no "telecommunications" component of internet access, and in any case the service offered to end users is integrated with an information service component which is mutually exclusive with any telecommunications component (thus transforming the service into merely an information service). His policy argument was that if reclassification succeeded, many higher-layer services (such as web applications) would be poisoned with overbearing regulation because they inevitably would be classed as telecommunications services as well (I critiqued his first stab at this argument over here). What's more, according to Jon, other portions of the internet might not be classified as telecommunications services and thus bad things could be done there with impunity. I suppose this final point is somewhat new, but the others are rather standard fare and don't really account for the counterpoints already in circulation. The success of his legal arguments will likely hinge on a series of finely focused distinctions in the web of service definitions found in the 1996 Act. He referred briefly to Harold Feld's recent fantasy FCC predictions, but thus far I am far more persuaded by Harold's position than Jon's (especially in the deference-rich environment of Chevron). You can get a sense for my opinion on a few of his specific points in my tweets.

In any case, I'll do a follow-up post on Freedom to Tinker outlining my fantasy FCC reclassification predictions. Sorry about the inevitable typos and harried prose above, but I've got some real baseball to attend to -- I'm about to get off the train to Citi Field to watch the Phillies beat the Mets.


Joly MacFie said...

Nitpicking I know, but Susan Crawford is now a UMich professor.

Steve Schultze said...

She actually just returned to Cardozo.

Joly MacFie said...

Ah, but! She doesn't actually rejoin Cardozo til July 1..