Posturing for a Telecom Law Rewrite

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One way to look at the recent Free State Foundation analysis of “Video Services Regulation” is its role as a place-holder for the upcoming “discussions” about overhauling the Telecommunications Act.

Many think tanks - along with loads of lobbyists - are already bruiting about ideas to present to the 113th Congress, which seems destined to - at least - look into an update to the 1996 Telecom Act, adopted just as the consumer Internet began and, hence, woefully outdated as soon as it went into effect.

At last week’s Senate Commerce Committee hearings on the 20th anniversary of the Cable Act of 1992, a precursor to the omnibus ‘96 Act, Committee Chairman Jay Rockefeller (D-WV) again showed his predilection for a revamp.

Citing the proliferation of satellite, telco TV and Internet services, Rockefeller asked, “Why hasn’t competition succeeded in bringing rates down and more programming choices?”

“I know many in the industry will argue that the Cable Act achieved its goals,” he added. “I highly doubt many consumers would agree.”

Despite such passion from a key participant - presuming the Democrats retain Senate control in the November elections - fundamentally, everyone I’ve encountered contends that “We don’t need new legislation.” Invariably in the next breath they agree that the “‘96 law is obsolete.”

The challenge is that the current law is not as bad as the problems of creating a new law. The new legislation debate would reflect the changed circumstances of the converged telecom and media industries; it would have to deal with the current environment of spectrum wars, data caps and copyright contention. Not to mention social factors (such as the digital divide) and economic realities.

Nonetheless, enough entities want a Congressional review of the Telecom Act that some movement is likely to begin in 2013 - perhaps with an eye toward actual action by the current Act’s 20th anniversary in 2016, or more likely after that year’s elections into 2017.

Among the top options is an overhaul or elimination of the Federal Communications Commission. Aside from purely political reasons for dissolving or disemboweling the agency, foes point out that the growth of the FCC’s agenda is reflected in its increasing budget: $180 million in 1996 compared to $340 million for 2013.

The anti-FCC forces point to other federal agencies that have outlived their usefulness, such as the Civil Aeronautics Board (1938 - 1978) and the Interstate Commerce Commission (1887 -1995) - have seen their sunsets.

Even folks who do not seek to eliminate the FCC envision a scaling back of its functions, with some issues assigned to the National Telecommunications and Information Administration or other agencies. They cite the unconscionable backlog of FCC inaction, such as its seven-year delay on emergency broadcast rules.

Of course, there’s no guarantee that another bureaucracy will work any faster.

Contrarily, promoters of a new telcom law point to the need for better ways to put the currently regulated industries onto the proverbial “level playing field” with new digital companies. Without uttering names, they glance toward Silicon Valley’s powerhouses such as Apple and Google, which many see as encroaching on regulated telecom/media businesses without the burden of federal rules. We can expect a vicious backlash from the growing tech-sector lobby to any proposed restraints, which will help extend the law-making process.

The realists among the gathering forces recognize that telecom reform is not a high priority. Cynics acknowledge that the threat of a good battle between rich telecom and tech companies will trigger substantial campaign contributions - and our elected Capitol Hill solons like the look of that kind of support.

Everyone recognizes that telecom reform is not an election-year issue. Hence, 2013 will be a reasonable time to begin the discussions. Recent hearings, such as Rockefeller’s Senate hearings and the House Communications Subcommittee examinations of video and data services are merely early fact-finding forays, although they set the stage for substantive investigation next year.

A consensus is that any Congressional telecom review will be “complicated” (a polite way to describe it) and will require enormous research. Popular topics - such as cable “data caps” and ownership consolidation - will be put under a microscope, especially if they are positioned as widening the social digital divide.

All of this makes the Free State Foundation’s paper on video services  so tantalizing, especially its focus on the FCC’s meddling with First Amendment rights through its must-carry and program carriage regulations.

“A free market future for video will require that First Amendment protections be respected for all technology platforms,” says FSF research fellow Seth Cooper, after noting that, “Technological and competitive developments over the last twenty years have transformed the video market.”

Those are the kinds of arguments that we’ll hear frequently when the Great Telecom Reform debate actually begins. And we will probably hear it for years and years if and when Congress actually deliberates any such reforms.

Gary Arlen is president of Arlen Communications LLC in Bethesda, Md., and a long-time interactive TV enthusiast. Reach him at GArlen@ArlenCom.com

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