Subject: [NEXTEL-1] Avoiding Regulation by Accident- By Michael K. Powell, Chairman The Federal Communications Commission

From: [email-masked]
Date: Sat, 29 Nov 2003 11:44:16 -0500

Avoiding Regulating by Accident

By Michael K. Powell, Chairman The Federal Communications Commission

Communication policy is about to be --- if it isn't already --- at a crossroads.
I think there is going to be a very, very important set of decisions to be made
as to how we embrace Internet-premised, Internet-based IP type communications
and whether we will tailor a set of regulatory clothing uniquely for it, or
whether we will make it wear Ma bell's hand-me-downs.  

And I think a public debate about it not being just a telephone or just an
incremental change off of the way we have looked at the telephone system for 100
years is a very, very important part of the crossroads. The micro judgments
about what regulatory policies apply then seem to me to be easier, or start to
fall in place, if you at least create national consensus that this thing is
different, it's different from a historical prospective, its different from a
technological perspective and it's deserving of a sort of singularly unique
policy examination, as opposed to what I see at risk right now, which is
regulating it by accident.

What is happening now is it's slowly being regulated by accident. As we stumble
through these new innovations, the market moves faster, the entrepreneurs are
moving faster and the innovations are moving faster then any regulator in this
country is moving to keep up with it. And I know what regulators do. I am one of
them. We are conservative, and we will fall back to what we know when fearing
being run over by something we don't understand. 

And I think the first thing is to truly commit ourselves to understanding the
technology and the market and the nature and the way in which it's unfolding so
that we're not fearful --- we don't approach this with fear, but we approach it
with excitement and optimism that this is inherently a good thing for the world,
a good thing for the country, a major breakthrough in telecommunications and
communications, and a great new opportunity and promise. We shouldn't be afraid
of that.

I personally think we should be embracing it. And so I think that that's an
important part of the debate. And so we're very excited about it. 

I have decided that the Commission is now going to start exerting itself in this
area much more directly. And that is not to say regulating it either, only to
put a marker down that it's time to start having these policy questions in
forums that matter.  I really don't. And I think that we run the risk that if we
don't move quickly to at least show that we're focused on it, then if you don't
have a state jurisdiction do it, you will have a court do it. 

Again I can honestly debate what the answers are, but I do think there is a
danger if you don't have the right institutional player in the right place. And
if you're not going to have an institution that's going to be capable of
dynamism and flexibility as it goes through trying to learn this, I think we're
going to have a problem. 

The role of regulation seems to me to depend on the time, the nature of the
problems, and the nature of the consequences, Because it "depends" is why I
think the worse thing we could do is, again, regulate it like a telephone,
regulate it by an accident for no other reason than that's what we know and
that's what we understand. And I think there are a lot of quarters right now
throughout the federal government and state governments that are poised to do
just that.

Or you have the almost equally ideological absurd libertarian "who cares" --- we
do care because we care about law enforcement capability, we do care because we
care about the disabled, we do care because we care about anticompetitive
behavior. I think the greatest error going on is the misunderstanding that if
you believe in the Internet being free and minimally regulated and unregulated
that means you don't care one wit about these other policy things. 

Build Up from a Blank Slate

I think that's wrong. I think what I care about is I want to build from a blank
slate up as opposed to from the myriad of telecommunications regulations down.
We might agree we want to be in the same place, but it is a nasty, entangled
litigious exercise to start from a phone company world of regulation and work
your way down this way, rather then to try to say, no, this is something new. 

Let's make each regulatory judgment as the consequence of forethought and
judgment and understanding about this specific technology. The statue makes that
cumbersome, because it's sort of like we want a set of new clothes but we've got
to work with the old sewing machines, the old thread that we can find in the
aging 1996 telecom closet. And that's not easy. I would submit 80% of the
questions that face me today are gray. There is no clear answer in the statute,
the statute is in its little buckets, and the buckets don't make sense. 

And why is the FCC in the midst of controversy all of the time? Because it is
always forced to try to negotiate a course through an ambiguous statute premised
on yesterday's technology and apply it to something that's emerging and changing
the new rule. We will keep doing that, but that's going to crumble. The Act is
going to crumble under relevance, even under its own weight, from the pressures
of technology. And one day, whether we like it or not, Congress will have to
come back to this lest it sort of sanction a set of odd and observed
contradictions that I think start to unfold in the law. 

So our goal should be --- the TAC and the Commission  --- to shape an
intelligent debate. Make sure that long before congress starts getting involved,
we help win in the public mind what the understanding of what that issue is, and
we make these things more thoughtful and minimal. I believe in minimal
regulation here only because I believe there is a futility principal. I think
that our institution, and state regulatory institutions, are not built
particularly well for fast changing dynamic technology-driven innovations. 

We're really good with matured industries that have generally stabilized to a
point of fixed points, of regulatory choke points, and things. But I think we're
really on dangerous turf when we're regulating change. You don't get a rule
making out of the FCC in less than a year or 6 months and in Internet time that
can be forever.

And so making sure that we focus on those handful of core regulatory values, and
having the courage to shed the rest, seems to me to be the billion dollar
question, I think there will be core regulatory values to protect but we ought
to go through the judging of where those are, commit to them, focus on them and
be confident and courageous enough to say "and the heck with the rest of this
stuff." 

And if time goes by and it turns out some of that rest of that stuff is needed
we'll bring it back. I'm always amazed at this sort of suggestion that somehow
there's one window for things and you will never be able to fix it again. I
don't know what world that comes from. I have watched 100 years of telecom
regulation constantly change, evolve, and flow back and forth, push and shove. 

So what's the role of regulation? One, I think you should justify what it is
beyond general antitrust principles and I think there are things. But on this
revolution, I think the burden is on the government. I think for this
revolution, when the Internet is already prospered so nicely without a lot of
government handholding, where IP and voice over IP and power line infrastructure
and other things that are interesting begin to prosper without our help, we
should own the burden of presumption of why we're needed here. And when we can
satisfy it, we should act and act clearly and swiftly.

But when we can't, we should stay the daylights away from it lest we interfere
with a healthy robust, innovative market. 

Remarks of  Michael K. Powell, Chairman, Federal Communications Commission On
Voice Over IP at the Meeting of the Technology Advisory Council FCC, Washington,
DC (as delivered) October 20, 2003

http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-241750A1.doc

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