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May 02, 2006
Stevens-Inouye Proves a Big Disappointment
Some Libertarian and free market analysts are trying hard to see something positive in the working draft of the “Communications, Consumer's Choice, and Broadband Deployment Act of 2006,” released Monday by the Senate Committee on Commerce, Science and Transportation,
I can’t blame them. There’s been a lot of work done toward moving telecom policy reform forward through Congress, and of all the bills proposed so far, this may actually get to a floor vote. Sure, no one gets everything they want, but I cop to complete disappointment with what’s emerged. Let’s not accept “any reform” as “good reform”
The draft bill, co-sponsored by Sens. Ted Stevens (R-AK) and Daniel Inouye (D-HI), does make a certain amount of progress toward network neutrality and leveling the playing field between cable and telephone companies when it comes to video services.
There’s some interesting back-and-forth at the Progress & Freedom Foundation (PFF) blog, where Adam Thierer expresses the same unease that I have, although Randy May commends the bill’s approach to network neutrality.
True, the bill’s “Study First, Mandate Later” approach is better than Barton-Rush, the bill’s loose counterpart in the House. But this small provision is dwarfed by the overall thrust of this massive 135-page bill which, when all is said and done, attempts to extend the current costly, unproductive and largely unworkable regulatory regime into broadband.
A lot more can be done with a lot less.
As it is drafted, the Stevens-Inouye bill falls far short of the true reform that’s needed to unleash the power of the broadband economy. Instead of freeing the industry from the burdensome regulations that have hindered broadband penetration growth, it piles on more. It would open the door to greater economic, market and content regulation in the entire broadband value chain. It would impose a massive new regulatory structure on services that have, to date, thrived without them. It is, in short, a huge step backward.
These are just a handful of my objections:
While giving lip service to some of the (well-discussed) options the FCC has for improving the Universal Service Fund scheme, the bill fails to address the inherent problems the funding, administration and transparency of the USF. In fact, the bill expands the fund’s size, complexity and mandate. For example, under the bill, revenues cable modem and Voice over Internet Protocol (VoIP) services would now be part of the contribution formula, a provision that will only add to the cost of to these services to consumers.
At the same time, broadband subsidies would be steered largely to rural wireline phone companies, which would have five years before they would have to invest in a dime’s worth of broadband infrastructure
Instead of clarifying and streamlining video franchising provisions to allow for speedier entry of competitors into the market, the bill offers a mish-mash of rules that invites bureaucratic conflict between federal and local jurisdictions.
The bill opens the door to content regulation. The so-called “sports freedom” provision will no doubt be popular because it prevents one local video competitor from carrying exclusive coverage of a sporting event. But this sets a precedent for the future regulation of Internet-based content and co-marketing agreements—which are a natural part of the competitive mix. Besides, it’s not like the NFL is going to cut off the Super Bowl to an entire swath of viewers, the unfounded fear behind this provision. The league, like any other sport competing for fan attention, wants as many viewers as it can get.
Finally, the bill can’t resist pork barrel politics, establishing programs to fund studies on how to improve interoperable communications between public safety agencies. The average tech school grad can answer that in four words – Use the Internet Protocol.
You can find the text of the bill here.
Multichannel News provides a summary here.
Posted by steve.titch at May 2, 2006 02:18 PM
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