Retrograde inversion

Going backwards upside down. That’s what we’re doing with telecommunications policy in the U.S.

The Comcast affair should prompt a re-examination of many decisions the FCC, Congress, and the courts have made over the last few years. When the FCC reports on its reactions to Comcast’s activities, the right response will be “You’re asking the wrong question.”

“What is reasonable network management” isn’t the question we should be asking. Instead, we should be asking ourselves “Why do the dominant network operators always win?” We don’t need retrospective fault-allocation – instead, we need a prospective legislative/structural plan for digging ourselves out of the hole we’re in.

The relevant precedent for the Comcast fracas is not Madison River. Instead, it’s the history of Ma Bell. (Yes, I know Comcast is a cable company. I’ll connect the dots.) AT&T’s enormous market power, vertical integration, skill at using regulation to avoid competition, and opacity (no one could figure out what was actually cross-subsidizing what) led the Department of Justice to investigate and ultimately recommend divestiture of its local phone companies from the rest of its business. In approving that consent decree, Judge Greene made very clear that these local phone companies should continue to be nondiscriminatory, and should not be allowed to be in the business of controlling information — news services — made available across their lines using computers.

The Judge Greene principle (common carriage, no involvement in information provision) has been entirely subverted over the last few years. Assisted by a deregulatory FCC, a quiet Congress, and deferential courts, we’re now moving backwards.

When it comes to highspeed internet access, we’re back in the land of dominant providers (multiple, but dominant), uniform vertical integration, and opacity.

Rather than having proprietary “information services” be the exception to a general rule of common carriage, all forms of access to the internet are now “information services.” The FCC has morphed and stretched (and sometimes ignored – see CALEA) the definition of “information services” to cover all the forms of communication we now care about. Meanwhile, Congress has given almost no guidance and the courts have shied away from interfering (see BrandX). This is neither wise nor efficient.

So even if the Commission says something sharp to Comcast about what practices amount to reasonable network management, that will not be a victory. It will just be a beginning. We need a thoroughly revamped approach to communications law: a revised statute that treats internet access as the general communications network it was supposed to be (as the framers of communications law thought telephone networks should be); a revised approach to judicial review, embedded in that statute, that revitalizes the role of the courts in telecommunications law; and far better information about what network operators are actually doing.

The next Administration could make bipartisan progress on telecommunications policy, given how much interest there is in this subject around the country.  I know, it isn’t the Iraq war, but a better approach to this subject could conceivably help this country’s economic growth.

And at least we won’t be going backwards upside down.

Comments

  1. Susan,

    I think the issue is that we do not have a policy. Until a policy is formed we cannot really say our policy is failing. “Failing to plan, is planning to fail.” We should really take this to heart.

  2. Your solution is more regulation via the courts and Congress? Isn’t this what entrenched AT&T for all these years?

  3. Dear Wyatt and M,

    You’re both right. We don’t have a policy, and we need one – and, M, effective regulation and judicial involvement gave us both the Computer Inquiries and the AT&T divestiture, both of which worked quite well. The 1996 Act didn’t. I’ll send you my upcoming article when it’s ready for external review.

    Susan

  4. Brett Glass says:

    Susan: Why do the dominant carriers always win? Perhaps it’s because the policy solutions advocated by some people — yes, including yourself — play directly into their hands. So do the claims, by yourself and others, that we already have a dupoly and must therefore regulate in a way that assumes we do. See my prepared remarks to the FCC at http://www.brettglass.com/FCC/remarks.html, which explain why.