Congress Must Modernize Communications Regulations to Protect Competition and Consumers | Commentary

Posted December 2, 2014 at 6:13pm

A year ago today, the House Energy & Commerce Committee leaders Fred Upton, R-Mich., and Greg Walden, R-Ore., launched the #CommActUpdate, an ambitious effort to overhaul the federal laws that govern America’s communications. Three hundred and sixty-five days later, on the heels of a Republican takeover of Congress and a public endorsement of the effort by soon-to-been Chairman of the Senate Commerce Committee, John Thune, R-S.D., this necessary effort seems destined for significant progress in 2015. Given the outdated 1934 laws are in today’s digital economy, this should be welcome news for all stakeholders in the communications landscape, including Internet companies, consumers and legislators looking to promote modern, constructive public policy. And with a long history of bipartisan success in this area, unlike other contentious policy areas in Congress, the #CommActUpdate is not only feasible, but realistic.

Now Congress must do its part to ensure that progress made in 2014 continues in 2015, so that when pen meets paper, modernized communications laws will see their way to the president’s desk.

The Communications Act of 1934, last updated in 1996, numbers some 500 pages and underpins communications regulation alongside an untold number of documents comprising case law and state and local rules. It was signed into law by President Franklin D. Roosevelt at a time when no one knew of a mobile phone or the Internet. The radio was the cool technology of the time; television was only introduced 6 years earlier. Today, however, communications has merged with content and connectivity. We accept that convergence is the new paradigm, but regulation has not kept up to date.

A history of the key acts from 1934, 1984, 1992 and 1996 can be understood as a series of compromises. While compromise is how things get done in Washington; it is also a way that special interests can influence, distort, and subvert operating conditions to serve narrow ends. This complex set of rules developed over the last century is next to impossible for consumers to understand.

The key problem with the current legal framework is that it is not technology neutral. By creating regulatory silos for the telephone network (Title II), radio (Title III) and cable TV (Title VI), it allows one technology to be favored — or regulated — at the expense of others. We can see how this regulatory structure is gamed with the current debate about applying Title II to the Internet. In this instance, certain Internet companies lobby to ensure their own special conditions (maintaining the primacy of the World Wide Web as the key application of the Internet) while delaying the development of the next generation technologies, such as mobile apps. Prohibiting broadband Internet providers from creating the technologies and business models that could support the next wave of innovation is a way to foreclose challengers to the reigning powers Google, Facebook and Netflix.

It’s a dangerous pattern to allow. What’s to stop any company or political action group from using the framework to regulate its rival? Maybe Skype should be regulated as a common carrier; Roku, a cable company; and Pandora, Spotify, and Slacker as traditional radio stations. Indeed, why not create a yet another silo in the Act for any new technology that comes along?

Classifications have fulfilled their useful life, but they are now obsolete, and should be retired.

The point of positive regulatory and competition policy is to promote competition, not competitors. In other words, not for the regulator to pick winners but to let consumer decide. As such, all technologies should be able to compete equally in the marketplace without special treatment from long-dead regulatory silos.

An important dimension of competition is consumer protection.

Consumers deserve the same set of standards across all services, no matter what technology they employ. If WhatsApp and Skype are communications applications, they should support 911 emergency communications, like telephone and mobile phone services must do. Similarly, if there are rules about portability and solicitations with phone numbers, these protections should also apply to email addresses and user IDs for web services. If high speed broadband Internet service is so vital, then universal service fees should be charged not just to voice services, but to Netflix, as it comprises a third of America’s internet traffic.

There is not a level playing field today, but there could be if the Communications Act is modernized. We need a modern, future-proof framework that applies to all technologies equally and ensures common protections for consumers across all platforms and services.

The point is not to add more regulation across the board but to set equal conditions so all firms can compete fairly. A modern regulatory framework sought by Congress should be no more than one page. Congress has an historic opportunity to recreate the bipartisan magic seen in 1996 and ensure the next wave of innovation and investment. Considering the importance of communication networks to America’s economy and society, the Communications Act is the one set of laws we should get right.

Roslyn Layton is a doctoral fellow in the Center for Communication, Media and Information Studies at Aalborg University in Copenhagen, Denmark. She is also a vice president of Strand Consult, an independent consultancy for mobile operators, and a visiting fellow at the American Enterprise Institute.