American Enterprise Institute

[Commentary] Needless to say, regularly rewriting the rules that govern one of the largest industries in the economy isn’t a good way to run an industry. Unfortunately, it’s not within the current commission’s power to adopt rules that will likely constrain a future commission. But by returning to a more neutral baseline approach to internet regulation, Chairman Pai is creating an opportunity for Congress or the courts to step in and put an end to the destructive, yet largely meaningless, generational fight over “net neutrality.”...

The most important thing that Chairman Pai’s proposal does is to tidy up the net neutrality mess and deliver it to Congress. His proposal reverses the most extreme aspects of the 2015 rules — Title II reclassification in particular — and leaves the direction of substantive rules open. He has reestablished what has long been considered the neutral baseline of agency authority. Now it’s Congress’s turn.

[Gus Hurwitz is an assistant professor at the University of Nebraska College of Law]

[Commentary] The network neutrality activists won a bigger victory than they ever expected when the Federal Communications Commission dropped the hammer of Title II telephone regulation onto the internet. It may therefore be useful to recount a little history as an inoculation against the coming fever. Here are some of the empty stories that led to Title II, which will likely be repeated in various forms in the coming months.

To change the nation’s bipartisan internet policy, the activists had to manufacture a story of US broadband failure. In service of the failed-broadband argument, the FCC in 2009 commissioned a report from Harvard’s Berkman Center on the state of US broadband. After withering critiques by eminent economists, Berkman excised some of the most egregious mistakes and issued an updated version, but the report was so compromised that the FCC quit citing the research. The false Netflix narrative: Perhaps no event over the past 15 years advanced the effort to regulate the internet as much as the supposed throttling of Netflix in the winter of 2013–14.

Net neutrality was never about anything so technical as “treating all bits equally” or anything so economic as protecting “innovation at the edge.” It was about gaining bureaucratic and political control of the digital economy – and thus, increasingly, because of the centrality of information networks, the physical economy, too. A rollback of this short-lived, unnecessary policy will thus ensure the internet’s continued upward trajectory.

[Swanson is president of Entropy Economics LLC]

[Commentary] The takeaway is that the public utility model sometimes works well to discipline natural monopolies in stodgy, unchanging fields such as water, where regulation is needed to displace dysfunctional market forces. In dynamic, competitive industries such as telecommunications, public utility regulation is not only misplaced but also affirmatively harmful to consumers. It is rigid and inflexible, precluding industry players from responding to new technological developments in ways that help consumers.

Perhaps more problematically, the public utility model allows politics to replace economics as the primary driver of decision-making, market development, and capital allocation. And this too often permits the process to be captured by incumbents that then insulate themselves from competition — something the electricity industry and old telecommunications hands, know all too well.

[Daniel Lyons is an associate professor at Boston College Law School]

[Commentary] No one likes unsolicited commercial phone calls. It doesn’t matter much whether they are automated calls with prerecorded messages or merely calls from unrecognized numbers or whether they come during dinner or in the middle of the work day. If you are like most people nowadays, you screen all calls, never answering the phone except for numbers you recognize or when you are expecting a call.

The Federal Communications Commission (FCC) has been actively working to rein in this scourge, revising its implementation of the Telephone Consumer Protection Act (TCPA) in 2015 and working to address problems relating to robocalls with an ongoing rulemaking. These efforts are largely laudable – but they are also too limited. In particular, they place too much emphasis on those making these calls and too little on how the architecture of the phone network makes these calls possible. As a result, they simultaneously are only incomplete solutions to stopping the problem of “bad calls” and also unduly burden “good calls,” subjecting companies with legitimate need to call consumers that want to play by the rules in making those calls to substantial liability for simple and honest mistakes. A better approach would be to update the telephone network from its current 1980s protocols to give consumers greater control over who can call them.

[Gus Hurwitz is an assistant professor at the University of Nebraska College of Law]

[Commentary] Shortly after being designated as chairman of the Federal Communications Commission, Ajit Pai announced his moon shot: closing the digital divide. In a refreshing and pragmatic break from central planning of the broadband economy, the FCC launched the Broadband Deployment Advisory Committee (BDAC), a diverse group of experts tasked with making recommendations on how to accelerate the deployment of high-speed internet access by reducing and removing regulatory barriers to infrastructure investment.

To be sure, the US is the global leader in broadband infrastructure investment, accounting for one-quarter of the world’s total, but the process to deploy infrastructure could be improved. The BDAC demonstrates the open innovation model to broadband deployment policy, recognizing that the solutions to closing the digital divide reside not necessarily in the FCC, but in the knowledge of a multitude of actors on the ground.

[Layton is a PhD Fellow at the Center for Communication, Media, and Information Technologies (CMI) at Aalborg University in Copenhagen, Denmark. She also served on President Trump's FCC Landing Team.]

[Commentary] Federal Communications Commission Chairman Ajit Pai recently announced that he is forming the Office of Economics and Data (OED) at the FCC. This is a good first step. But what we need is a change that makes it nearly impossible for the agency to return to the situation of the past few years, where letters from senators and videos from the White House were the primary sources of economic analysis. This will require a deeper structural change.

To accomplish this, the commission will need to abolish its industry silos — the wireline, wireless and media bureaus — so that turf wars cannot crowd out economic work. It would also be valuable to establish a research fund so that young economists and engineers are excited to begin their careers at the agency and hopefully spend significant time there, perhaps their entire careers. Chairman Pai’s initiative and the deeper changes I identified are not permanent cures for the problems that plague the agency — bad leadership can destroy even the best organizations — but perhaps we can get the FCC back to being a world leader in rigorous thought. Pai has given the agency a start.

[Mark Jamison is the director and Gunter Professor of the Public Utility Research Center at the University of Florida]

[Commentary] Federal Communications Commission Chairman Ajit Pai recently announced that he is forming the Office of Economics and Data (OED) at the FCC. This is a good first step. But what we need is a change that makes it nearly impossible for the agency to return to the situation of the past few years, where letters from senators and videos from the White House were the primary sources of economic analysis. This will require a deeper structural change.

To accomplish this, the commission will need to abolish its industry silos — the wireline, wireless and media bureaus — so that turf wars cannot crowd out economic work. It would also be valuable to establish a research fund so that young economists and engineers are excited to begin their careers at the agency and hopefully spend significant time there, perhaps their entire careers. Chairman Pai’s initiative and the deeper changes I identified are not permanent cures for the problems that plague the agency — bad leadership can destroy even the best organizations — but perhaps we can get the FCC back to being a world leader in rigorous thought. Pai has given the agency a start.

[Mark Jamison is the director and Gunter Professor of the Public Utility Research Center at the University of Florida]

[Commentary] Now that the White House, Congress, and the Federal Communications Commission (FCC) are getting serious about rural broadband deployment — in contrast with the past eight years — it is time to develop strategies that actually make positive impacts.

Policies for rural broadband have seemed random the past eight years: billions of stimulus dollars were thrown at unneeded and failed projects, the FCC expanded failing systems like Lifeline, the Obama White House and the FCC moved to limit the profitability of rural broadband, and the FCC chose an arbitrary definition for broadband. These failed policies wasted billions of dollars and did little to help rural communities gain broadband connectivity. It is time to let markets lead the way.

Localities often have zoning, permitting, and other regulations that make broadband deployment costly, and procedures vary from location to location. This multiplies the complexity of planning and permitting and adds costs. There is a need to streamline permitting processes, promote nondiscriminatory access to conduits and poles, facilitate infrastructure sharing, and eliminate unnecessary post-construction cleanup requirements.

Restrictions on how broadband providers can generate revenue constrain broadband expansion by limiting profitability. The FCC’s net neutrality restrictions are an example. Broadband service providers in targeted rural areas could also be allowed to charge content providers for access to customers, perhaps making it profitable to provide broadband access without a subsidy.

[Jamison is the director and Gunter Professor of the Public Utility Research Center at the University of Florida. He was also part of President Trump’s FCC Transition Team]

[Commentary] Kudos to the House Commerce Committee’s for its recent hearing on Broadband: Deploying America’s 21st Century Infrastructure. The session demonstrated different views on how and to what degree the government should be involved in broadband deployment, but it also exposed policymakers’ assumptions on broadband and showed what information is missing from the discussion:
Flawed Assumption 1: Government subsidies for broadband will create economic growth.
Flawed Assumption 2: Private providers are failing in their investments.
Flawed Assumption 3: Government should adopt a broadband speed target.
False Assumption 4: The quality of mobile coverage is a function of the network.
False Assumption 5: There is no business case for investment.

[Roslyn Layton is on the FCC transition team and is a PhD Fellow at the Center for Communication, Media, and Information Technologies (CMI) at Aalborg University in Copenhagen, Denmark.]

[Commentary] To consumers, an Internet service provider using customer geolocation data (for example) to send them relevant advertising or Google using geolocation data to send them relevant advertising is a distinction without a difference. To require that consumers opt-out of a default privacy protection regime for ISPs and opt in to a privacy regime for using Google or Facebook potentially confuses the privacy issue. Why doesn’t the FCC just apply the same privacy law to Google and Facebook? Because it can’t.

Concerns about privacy are legitimate and change over time. It is reasonable to vigilantly and continuously assess the costs and benefits of any given privacy policy and adjust when necessary. But a disjointed policy that treats similarly situated economic players differently is not the answer.

[Babette Boliek is an associate professor of law at Pepperdine University School of Law ]