10 Questions for Obama’s Nominee to Chair FCC
Today, the Senate Commerce Committee will hold a hearing (at 2:30 EDT) on President Obama’s nomination of venture capitalist Tom Wheeler as FCC Chairman (hashtag: #FCC). As we progress into an increasingly digital economy, the FCC will play a central role in determining the size and scope of government in our lives. Here are the top ten questions Senators should ask Wheeler:
Question: If the D.C. Circuit strikes down net neutrality regulations, would you reclassify broadband as a common carrier telecommunications service under Title II?
The right answer: No. Title II was written to govern monopoly telephone service; it wasn’t meant for competitive industries such as broadband. There’s plenty we can do to make broadband more competitive, but Title II is the wrong regulatory framework. The FCC should await legislative guidance from Congress.
Question: Can the DOJ and FTC police network management practices under existing antitrust and consumer protection laws?
The right answer: Yes, the DOJ and FTC already have authority to address harmful or anti-competitive broadband practices. There is no need for additional regulations.
Question: 75% of Americans have already fled the copper telephone network for wireless or IP-based services like VoIP from their cable provider. But the FCC has blocked the full-scale trials needed to understand how an all-IP world would work. Can regulators keep up with technological change? How would you ensure the FCC doesn’t hinder technological progress?
The right answer: Regulators just can’t keep up. Generally speaking, that means getting out of the way—and especially, not blocking experimentation. Government’s job is to protect consumers from clear harms like fraud and abuse of true market power, not to try to engineer the technologies of tomorrow.
Question: As Chairman of the FCC’s Technological Advisory Committee, you recommended that, by 2018, the increasingly antiquated telephone network backbone be replaced with an all-IP network for voice, video and broadband service. AT&T has proposed to do just this by 2020. But when AT&T proposed a trial of the transition, the FCC dawdled for six months on the petition—then punted the request by asking more questions. Do you still support your recommendation?
The right answer: Yes, I do. The FCC must move quickly to approve large-scale all-IP trials to speed the transition to modern networks.
Question: Rep. Walden’s FCC Process Reform bill passed the House last Congress. It would have imposed strict deadlines for FCC action and limited the Commission’s ability to regulate through merger conditions. Commissioner Pai has been quite vocal about the need for the FCC to close dockets that have remained open and untouched for years–like the Title II docket. What do you think of these reforms?
The right answer: I support both ideas. Both would improve the efficiency of the FCC, reduce regulatory uncertainty, and encourage investment and innovation. Regulators shouldn’t set the pace of progress.
Question: Should the FCC design rules for the upcoming spectrum incentive auctions that could limit participation by some carriers so that other carriers can buy spectrum more cheaply?
The right answer: Congress instructed the FCC to buy back inefficiently used spectrum from broadcasters and auction it off to its highest valued use. Limiting participation would undermine auctions as a market mechanism. Once we start tinkering with auctions, we end up with bureaucrats, rather than markets, picking winners and losers.
Question: How should the FCC decide how much of the spectrum broadcasters decide to sell should be allocated for unlicensed uses like better Wi-Fi and how much for licensed services like 4G?
The right answer: We need both. But the FCC shouldn’t make that decision any more than they should decide how to allocate spectrum among competing licensed services. That’s why we have auctions: so the FCC doesn’t have to decide from the top down. Auctions can work here, too—with a twist. Simple auctions would undervalue unlicensed uses, but the FCC has proposed special ““clock auctions” to gauge demand for unlicensed services. That’s a smart way to use markets. It should have stayed in the Spectrum Act.
Question: In 2011, the FCC opened an inquiry on improving how local governments allow access to rights-of-way for broadband networks and process applications to build wireless towers. The Commission has yet to propose rules. What would you do?
The right answer: Google Fiber has demonstrated that private companies can build competitive wireline networks if local governments stop trying to maximize revenues from leasing rights of way–and start looking at broadband as key to local economic development. Expediting construction of towers and small cells is critical to improving wireless service, especially in cities. This is particularly important for minority communities that rely on wireless service as their primary means of Internet access.
Question: On July 10, the FCC will hold a workshop on what to do about exorbitant prison payphone rates, which can be as high as $5 for the first minute and $15 for a 15 minute call. Some have proposed capping rates. What would you do?
The right answer: There’s been a lot of talk lately in telecom circles about “captive audiences.” But prisoners and their families are the real captive audience. They shouldn’t be taxed to balance state budgets. Like everyone else, they need competition.. I’d bar states from granting monopoly contracts to payphone operators, and from getting kickbacks. Prisons should pick operator that provides good service and effective security at the lowest price, not the one that pays them the most for the privilege of gouging prisoners and their families.
Question: Do we need a new Communications Act?
The right answer: Absolutely. The silos in the 1996 Act don’t make sense anymore. Today’s laws were written before anyone really understood that the Internet would change everything. We need to fundamentally rethink what the FCC looks like. If Congress decides that we no longer need the FCC of the 1930s, or even 1996, I wouldn’t mind being the Chairman who figured out how to streamline this agency and transfer useful functions to other agencies. I’m a businessman, not a regulator. Businesses aren’t immortal. Agencies shouldn’t be either.