Net Neutrality, Telecom Convergence Under Telecom Act Among Toughest Issues for FCC, Experts Say
The FCC faces challenges regulating in the changing telecom landscape, said telecom policy experts Friday at a Practising Law Institute event in Washington. The transition of the communications marketplace since the Telecommunications Act of 1996 will be a challenge for the current FCC under Chairman Tom Wheeler, said consultant Earl Comstock, former Comptel president. The law isn’t as out-of-date as some professionals in the telecom industry claim, he said in a debate with Lawrence Spiwak, Phoenix Center president: “It was designed to set up the framework for exactly what we're seeing today.” The intersection of technology and regulation is a challenge for the commission, Comstock said. The rapid change in technology is true for applications but not for the underlying infrastructure, he said. Wireless and wireline are complementary, not competitive, he said: “If you want a strong wireless network, you've got to have a good wireline network.” This commission must deal with the fact that cable and phone networks are converged, he said.
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The problem with the mandate is Congress wants competition along with other benefits, like universal service and E-rate, Spiwak said. “Chairman Wheeler is going to have to be extremely innovative, particularly from a legal perspective, to come up with a way to move us forward.” There also is a problem with Section 10 of the Communications Act, he said of the provision that gives the commission forbearance authority. Section 10 is supposed to apply to legacy telecom services, he said. There’s a market power standard that rendered it moot, he said. “You have a real problem when we're talking about getting rid of these legacy regulations that Section 10 can’t be used,” he said. “As long as that order is on the books, you will not have forbearance and I think that is a major problem that we're facing.” It might require congressional action, he said: “Or Chairman Wheeler could reverse it if he felt like it” and come up with a better standard, he said.
The pending court decision in Verizon v. FCC will have a role in how the commission will approach net neutrality, Comstock said. The U.S. Court of Appeals for the D.C. Circuit may try to craft its own interpretation of Section 706 in the case, he said, referring to the part of the statute that the FCC asserts gives it authority to regulate the Internet. “There’s no enforcement authority, there’s no appeal to the courts, there’s no authority for the FCC to write regs” under Section 76, he said. “There’s all kinds of interesting problems,” he said.
The net neutrality debate was a tempest in a teapot at first, Spiwak said. Many issues with net neutrality are more “political and emotional,” he said. Comstock agreed “it’s a political minefield largely because it isn’t well-defined.” However, “this is not totally new. … We can apply law that’s been followed over centuries of human behavior,” he said.
The FCC must deal with the statutory provisions for auctioning spectrum and be very careful in determining whether to exclude some bidders from the auction, Comstock said. The commission has a good option with the spectrum screen, he said. “If the commission wants to keep multiple players in the market … how many people do you really need to have a competitive market?” It must figure out how many facilities-based competitors to keep in the market and set the screen according to that, he said.
The notion that more spectrum equals more competitors is a myth, said Spiwak. “We're facing spectrum exhaust.” The auction is unique in that Congress expects a lot of dollars to pay for broadcasters, FirstNet, the repacking and other efforts, he said. “Logic dictates that if you exclude the two largest CMRS [commercial mobile radio service] providers … you're not going to get the money that you're expecting, which is what Congress is looking at.”