FCC

AT&T-T-Mobile Merger Delayed

by Ryan Young on August 29, 2011 · 12 comments

in Regulation, Tech & Telecom

A few months ago, the FCC said it would hand down a decision on whether to allow AT&T and T-Mobile to merge within 180 days. August 26 was day 83. The FCC decided to reset the clock to zero. So now it will be as long as another six months before the FCC announces its verdict.

There’s a comment to made here about regulatory uncertainty. There’s another one to make about the value of the FCC keeping its word. But instead I’ll concentrate on Sen. Al Franken’s recent remarks. “I am very suspicious of consolidation of power,” he told MinnPost.com.

“Big is bad” is an old argument. Age has not given it wisdom, however. Suppose a super-size phone company like a merged AT&T-T-Mobile is so big, clunky, and inefficient that it has to charge higher prices. What a golden opportunity for smaller, leaner competitors like Verizon and Sprint to swoop in and gain market share.

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FCC Repeals 83 Regulations

by Ryan Young on August 23, 2011

in Regulation, Tech & Telecom

In July, President Obama issued an executive order requiring independent agencies to comb through their books and axe obsolete or harmful rules. A similar order for cabinet-level agencies in January saved an estimated $1.5 billion in regulatory costs, or a little less than 0.1 percent of total annual federal regulatory costs.

The order gives agencies 100 days to act. The FCC struck a little early by announcing yesterday it was getting rid of 83 rules. The White House is expected to release the final package for all independent agencies today. Total estimated savings are $10 billion over five years. Combined with the earlier executive order, federal regulatory costs could go from $1.752 trillion per year to about $1.749 trillion per year.

One of the rules the FCC is chucking is the Fairness Doctrine, which empowers the FCC to regulate the ideology of political programming. It hasn’t been enforced since 1987 because it violates the First Amendment (“Congress shall make no law… abridging the freedom of speech”). But until now, nobody thought to actually remove it from the Code of Federal Regulations. It’s been sitting there the whole time!

Other hygienic measures the FCC is taking include “the deletion of obsolete  “broadcast flag,” cable programming service tier  rate, and broadcast applications and proceedings rules,” according to an FCC press release.

The repeals will become official upon publication in the Federal Register.

Regulation Roundup

by Ryan Young on June 3, 2011

in Regulation

Some of the stranger goings-on in the world of regulation:

Bill Shock Shouldn’t Be A Federal Issue

by Ryan Radia on October 15, 2010

in Tech & Telecom

The FCC proposed new rules today aimed at combating wireless “bill shock,” a term that describes mobile subscribers getting hit with overage charges they didn’t anticipate. The proposed rules would require wireless providers to create a system for alerting customers when they are about to incur extra usage charges for voice, text, data, or roaming.

I can certainly see why some consumers may be frustrated with wireless pricing practices. But this frustration hardly constitutes evidence that the mobile marketplace is actually failing. Yes, mobile carriers sometimes make mistakes, and they probably need to do more to ensure their customers understand how overage charges work.

Competitive forces, however, are far better equipped than federal regulators to punish providers that engage in genuinely harmful practices. And if the federal government must “do something” about bill shock, educating mobile subscribers about where to locate and track their usage information is a far better approach than prescriptive, burdensome federal regulation.

Hypocritically, even as the FCC tries to reign in bill shock, its own policies are harming consumers far more than any wireless industry practices. The FCC has again and again put off spectrum auctions that would enable mobile providers to offer better services at lower prices. As a result, consumers are suffering to the tune of billions of dollars each year. Economists Thomas Hazlett and Roberto Munoz published a study last year in which they concluded that U.S. wireless prices would decline by 8 percent if the FCC were to allocate an additional 60mhz of spectrum to mobile telephony.

If the FCC truly cares about wireless subscribers, rather than simply grandstanding against competitive (if imperfect) mobile carriers, the Commission’s top priority should be to aggressively free up the airwaves.

But analysts at the Competitive Enterprise Institute urged the FCC not to interfere with market disputes and to instead turn its focus to the real obstacle to the wireless marketplace – the FCC’s own anti-consumer approach to spectrum allocation.

“Educating mobile subscribers about where to locate their up-to-date usage information – which all major wireless providers make available – is a far better solution to ‘bill shock’ than prescriptive federal regulation,” argued Ryan Radia, CEI Associate Director of Technology Studies.

Radia pointed out that some consumers’ frustration with current wireless pricing practices is hardly evidence that the mobile marketplace is failing. “To be sure, mobile carriers make occasional mistakes, and they need to work harder to ensure their customers stay well-informed,” Radia said. “But competitive forces are far better equipped than federal regulators to punish providers that engage in genuinely harmful practices or fail to satisfy consumers’ evolving preferences.”

In its efforts to address wireless bill disputes, the FCC purports to represent consumers’ interests; yet, Radia argued, the agency is harming consumers by delaying action to free up radio spectrum — the lifeblood of wireless communications.

“Consumers are suffering to the tune of billions of dollars each year on account of the FCC’s failure to free up radio spectrum for mobile communications,” Radia said. “Economists Thomas Hazlett and Roberto Munoz recently published a study finding that U.S. wireless prices would decline by 8% if the FCC were to allocate an additional 60mhz of spectrum to mobile telephony.”

“If the FCC genuinely cares about wireless subscribers, it should focus on aggressively freeing up the airwaves instead of comparatively trivial issues like bill shock.”

Video: The Open Internet and Lessons from the Ma Bell Era

by Ryan Radia on August 20, 2010

in Tech & Telecom

Earlier this week, The Daily Show’s Jon Stewart summed up the debate over net neutrality by stating, “On one side [are] those who want the marketplace to remain a wide open market of ideas, and on the other side [is] a larger group who have no idea what net neutrality means.”

Stewart may have been joking, but he was right about one thing – many folks are confused about what net neutrality actually is and what it would mean for Internet users.

That’s why I decided to enter the America’s Got Net video contest, sponsored by the Open Internet Coalition, a pro-net neutrality trade association. In a short video entitled, “The Open Internet and Lessons from the Ma Bell Era,” I explain how mandating net neutrality would endanger the networks of tomorrow and insulate entrenched firms from competition. Enjoy!

Give & Take: Fifth Amendment Complicates Net Neutrality

by Carolyn Homer on July 30, 2010 · 25 comments

in Legal, Regulation, Tech & Telecom

Opponents of net neutrality, including the Competitive Enterprise Institute, have pointed to numerous grounds upon which the detrimental scheme could be challenged. These include its deterrent effect on investment, its unsatisfactory grounding in FCC statutory authority, and that it violates the First Amendment.

Via the Free State Foundation’s outstanding Perspectives series, a forthcoming paper from Boston College Law Professor Daniel Lyons offers an even stronger basis for challenge: The Fifth Amendment. Under Prof. Lyons’s theory, net neutrality would run afoul of eminent domain. It would constitute a regulatory taking, requiring just compensation.

Under Supreme Court precedent, any governmental regulation that results in “permanent, physical occupation” of private property constitutes a per se taking. This is true even where the government itself is not doing the occupying. If the government grants access to other parties to freely traipse across private property, it’s still a taking. In effect, the government has forced one party to give a permanent easement to another party, destroying the first’s “right to exclude.”

This applies in the net neutrality context. Instead of allowing broadband providers to dictate terms of service and variable pricing models based on demand, the providers would be forced to allow content creators unlimited access to their networks. In essence, “content providers would receive the equivalent of a virtual easement to traverse broadband providers’ networks.” If it’s a compensable taking for the government to require cable lines to be installed, it’s also a taking for the government to require that those cable lines carry certain content.

And lest opponents start arguing “But it’s only electricity! That’s not what Court meant by physical.”, Prof. Lyons has a rebuttal:

As a factual matter, the transmission of content over broadband networks is not some metaphysical act. It takes place in a real physical space: the fiber-optic and copper wires, and associated electronics, that comprise the broadband network. Transmission of Internet content primarily involves the movement of electrons (which are physical particles) that occupy rivalrous limited space on telecommunications wires en route from the Internet to the end-user consumer. While the electrons are invisible to the naked eye and travel very quickly within a sheathed wire, the physical act of transmission is nothing more than a microscopic version of vehicles traveling along a highway—or pedestrians traversing an easement. In other words, the mandatory transmissions do physically occupy the service providers’ property.

Lyons goes on to describe how the FCC lacks the constitutional authority to authorize such a taking. A Title II reclassification could thus be void from Day 1. Only Congress can take this action, if action is taken at all. But if Congress acts, they should understand that the regulation will come with a multimillion dollar price tag in legal fees and compensation payouts from the Treasury. That’s not smart policy — jeopardizing taxpayer dollars for a scheme that was ill-conceived from the very beginning.

The Open Internet and Lessons from the Ma Bell Era

by Richard Morrison on July 30, 2010

in Video, Zeitgeist

[youtube:http://www.youtube.com/watch?v=ZS_udd5K91o 285 234]

LibertyWeek 92: FCC Power Grab

by Richard Morrison on May 10, 2010

in CEI Projects, Features, Podcast, Zeitgeist

Richard Morrison and Marc Scribner team up with William Yeatman, Ryan Radia and Iain Murray, to bring you Episode 92 of the LibertyWeek podcast. We take on the prospects for cap-and-trade climate legislation, the FCC’s broadband power grab, tales from a hung parliament and an exciting new job opportunity in Venezuela.

LibertyWeek 79: Where Are the Jobs?

by Richard Morrison on February 1, 2010

in CEI Projects, Podcast

Richard Morrison, Marc Scribner and Josh Barro join forces to being you Episode 79 of the LibertyWeek podcast. We take on barriers to job creation, anti-capitalist murmurs in Davos, the iPad’s unapproved technology, laws against motorized texting and why it’s all or nothing in the healthcare debate.

Regulation of the Day 87: The Volume of TV Commercials

by Ryan Young on December 18, 2009 · 1 comment

in Deregulate to Stimulate, Nanny State, Personal Liberty, Regulation, Regulation of the Day, Tech & Telecom

The House passed the Commercial Advertisement Loudness Mitigation Act on Wednesday. If it becomes law, the FCC would control the volume level of television commercials. Some of them are noticeably louder than regular programming. This is, to put it tactfully, irritating.

Rep. Rick Boucher told the Associated Press that “It’s an annoying experience, and something really should be done about it.”

He was talking about the commercials, though his remarks better fit the regulations he voted for.

Still, he’s right that something needs to be done. Loud commercials are a nuisance. They are also avoidable. For example, I avoid them by watching as little television as possible. Maybe read a book or spend time with loved ones instead. There are other ways, too. Here are a few:

-Use the mute button on your remote.

-If you have DVR and you’re watching a show you recorded, you can fast forward through the commercials.

-Change the channel.

-Let broadcasters know how you feel. Tell them not to run loud commercials. You can contact ABC here; CBS here; Fox here; and NBC here. They’d rather you watch their channel than not, after all. And the best way to prevent a viewer exodus is not alienating them.

Besides, they’d probably rather hear from you than the FCC.

(Hat tip to Fred Smith)

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