As the FCC launches a number of inquiries into the wireless marketplace, some opponents to such scrutiny have raised the argument that the FCC has no legal basis for regulating wireless handsets, much less interfere with exclusive distribution agreements. This strategy does inject fear, uncertainty and doubt possibly leading to the argument that regulatory uncertainty constitutes the sole basis for any finding of insufficient infrastructure investment. But is there a legal basis to the no jurisdiction argument?
As to the question about general jurisdiction, the FCC surely has a legal basis on grounds that wireless handsets are radiotransceivers. These devices transmit and receive using radio spectrum. The FCC has jurisdiction even over low powered devices that open garages, fly model planes, nuke food, and monitor baby sounds. No manufacturer of such spectrum using equipment can sell any device without certification by the FCC.
The harder question addresses whether the FCC can abrogate contracts between regulated carriers and unregulated ventures, such as Apple, regarding a regulated handset. I don’t have a definitive answer, but I can refer to a recent instance where the FCC did claim lawful authority to abrogate any and all types of exclusive service contracts between real estate owners of multiple dwelling units and a multichannel video program distributor. See Exclusive Service Contracts for Provision of Video Services in Multiple Dwelling Units and Other Real Estate Developments, MB Docket No. 07-51, Report and Order and Further Notice of Proposed Rulemaking, 22 F.C.C. Rcd. 20235 (2007).
Arguably, if the FCC determines that the public interest justifies mandatory non-exclusivity, then the FCC can order the elimination of contracts that established exclusivity. I am sure sponsored researchers, wireless carriers, and handset manufacturers will try to find ways to distinguish video program service from wireless devices. But bear in mind that the FCC also rejects exclusivity for cable operator provided set top boxes, a device, and not a service.
Tuesday, September 1, 2009
Sunday, August 30, 2009
Making a Mark in Telecom Policy: The 3PI Rule
With over thirty years experience in trying to influence U.S. federal telecommunications policy making, I can offer insights about the process that have passed the test of time. The 3PI Rule applies equally regardless of presidential administration and political party notwithstanding the wishful thinking of some about a “brand new day.” While I am using trite phrases, I might as well add this one about the rules: “the more things change, the more they remain the same.”
I have found first hand that individuals and groups, embracing and applying the following rules, achieve a comparatively greater impact.
1) Be Provocative!
In the policy making process—and in particular, framing the debate in Congress, the FCC, and in the trade and general circulation press—being provocative matters. Your quotes have a better zing, regardless whether they make sense and have empirical support. You may develop a reputation as a loose cannon, loonie, or true believer, but important decision makers will know about you and your message, partly because of your media quotes.
People like Scott Cleland, Richard Bennett, and Scott Wallsten understand this. They have to develop a thick skin to handle often personal and nasty criticism. Fairly or not, their provocations trigger such reactions. Scott Cleland is a major “go to” guy for insights and juicy quotes on the perils of network neutrality and other current issues. See his blog: http://precursorblog.com/. He recently vilified Google and a prominent economics professor, on leave for a job with the company: “antitrust’s modern day Pinocchio claimed that competition is just ‘one click away,’ now Google is claiming that the notion that scale is important to search competition is ‘bogus.’ Google’s Chief Economist, Hal Varian is pushing a preposterous, self-serving argument . . ..” See http://precursorblog.com/content/google-antitrusts-pinocchio
Richard Bennett offers helpful engineering insights about the Internet, but also meets the provocation test, for example, by claiming that public interest advocacy groups such as Free Press (http://www.freepress.net/) and Public Knowledge (http://www.publicknowledge.org/)
are “working the refs” when claiming that the FCC’s broadband workshops lack fair representation; see http://broadbandpolitics.com/?p=5714. Of course these groups work the refs just as companies like Verizon and AT&T who spend millions annually to do so. With comparatively more funds available, these companies have a much better shot at even influencing the selection of the refs.
Scott Wallsten offers helpful and insightful analysis which I may not always endorse. He too knows the value of provocation when coming up with titles for his work, e.g., Everything You Hear about Broadband in the U.S. is Wrong; see http://www.pff.org/issues-pubs/pops/pop14.13wallstenOECDbroadband.pdf. Scott attempts to show flaws in statistics showing comparatively mediocre broadband penetration in the U.S. However, he uses FCC-compiled data to make his point, despite the fact that many people, including me,
have challenged the FCC’s work product as quite flawed, e.g., using zip codes and a 200 kilobit per second threshold to define broadband; see http://www.vjolt.net/vol14/issue2/v14i2_100%20-%20Frieden.pdf.
2) Be Prolific
It pays to produce work early and often. I marvel at the productivity of people like Greg Sidak, http://www.law.georgetown.edu/faculty/facinfo/tab_faculty.cfm?Status=Faculty&ID=2128;
and Chris Yoo, http://www.law.upenn.edu/cf/faculty/csyoo/. I try to match their work ethic, but my primary job as undergraduate instructor gets in the way. I have needy students requiring lots of care and feeding, and the same applies to the administrative work in a College of Communications. Lacking any research assistant help, I “hand craft” everything.
3) Find a Prestigious Affiliation
This rule follows from rule 2: an affiliation with a law school, or major think tank offers both credibility and greater likelihood for staff support. I know the former matters, because my Penn State affiliation sometimes gets replaced with the University of Pennsylvania. Also it helps when a reporter thinks I am a law professor as occurs in today’s Parade magazine: http://www.parade.com/news/intelligence-report/archive/090830-more-choice-for-cellphone-users.html.
When the FCC sought to secure outside analysis for broadband development, two of the first appointments when to researchers at Harvard and Columbia: see http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-291986A1.pdf; http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-292598A1.pdf.
4) Incumbents Matter Most
Recognize that regardless of who runs the executive branch and which party has a majority in the legislature, incumbents have money, clout, and staying power. During the course of one’s career few incumbents fail, and only a few market entrants eventually acquire incumbency status. In the former category, Western Union did manage to lose its text market dominance and now generates most revenues from money transfers. In the latter category, the Internet has made incumbents of Google, Amazon, and e-Bay. But year in and year out, incumbents such as Verizon, AT&T, Comcast and Time Warner have the resources to sponsor research, appeal unfavorable regulatory decisions, and work the refs better than everyone else.
I have found first hand that individuals and groups, embracing and applying the following rules, achieve a comparatively greater impact.
1) Be Provocative!
In the policy making process—and in particular, framing the debate in Congress, the FCC, and in the trade and general circulation press—being provocative matters. Your quotes have a better zing, regardless whether they make sense and have empirical support. You may develop a reputation as a loose cannon, loonie, or true believer, but important decision makers will know about you and your message, partly because of your media quotes.
People like Scott Cleland, Richard Bennett, and Scott Wallsten understand this. They have to develop a thick skin to handle often personal and nasty criticism. Fairly or not, their provocations trigger such reactions. Scott Cleland is a major “go to” guy for insights and juicy quotes on the perils of network neutrality and other current issues. See his blog: http://precursorblog.com/. He recently vilified Google and a prominent economics professor, on leave for a job with the company: “antitrust’s modern day Pinocchio claimed that competition is just ‘one click away,’ now Google is claiming that the notion that scale is important to search competition is ‘bogus.’ Google’s Chief Economist, Hal Varian is pushing a preposterous, self-serving argument . . ..” See http://precursorblog.com/content/google-antitrusts-pinocchio
Richard Bennett offers helpful engineering insights about the Internet, but also meets the provocation test, for example, by claiming that public interest advocacy groups such as Free Press (http://www.freepress.net/) and Public Knowledge (http://www.publicknowledge.org/)
are “working the refs” when claiming that the FCC’s broadband workshops lack fair representation; see http://broadbandpolitics.com/?p=5714. Of course these groups work the refs just as companies like Verizon and AT&T who spend millions annually to do so. With comparatively more funds available, these companies have a much better shot at even influencing the selection of the refs.
Scott Wallsten offers helpful and insightful analysis which I may not always endorse. He too knows the value of provocation when coming up with titles for his work, e.g., Everything You Hear about Broadband in the U.S. is Wrong; see http://www.pff.org/issues-pubs/pops/pop14.13wallstenOECDbroadband.pdf. Scott attempts to show flaws in statistics showing comparatively mediocre broadband penetration in the U.S. However, he uses FCC-compiled data to make his point, despite the fact that many people, including me,
have challenged the FCC’s work product as quite flawed, e.g., using zip codes and a 200 kilobit per second threshold to define broadband; see http://www.vjolt.net/vol14/issue2/v14i2_100%20-%20Frieden.pdf.
2) Be Prolific
It pays to produce work early and often. I marvel at the productivity of people like Greg Sidak, http://www.law.georgetown.edu/faculty/facinfo/tab_faculty.cfm?Status=Faculty&ID=2128;
and Chris Yoo, http://www.law.upenn.edu/cf/faculty/csyoo/. I try to match their work ethic, but my primary job as undergraduate instructor gets in the way. I have needy students requiring lots of care and feeding, and the same applies to the administrative work in a College of Communications. Lacking any research assistant help, I “hand craft” everything.
3) Find a Prestigious Affiliation
This rule follows from rule 2: an affiliation with a law school, or major think tank offers both credibility and greater likelihood for staff support. I know the former matters, because my Penn State affiliation sometimes gets replaced with the University of Pennsylvania. Also it helps when a reporter thinks I am a law professor as occurs in today’s Parade magazine: http://www.parade.com/news/intelligence-report/archive/090830-more-choice-for-cellphone-users.html.
When the FCC sought to secure outside analysis for broadband development, two of the first appointments when to researchers at Harvard and Columbia: see http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-291986A1.pdf; http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-292598A1.pdf.
4) Incumbents Matter Most
Recognize that regardless of who runs the executive branch and which party has a majority in the legislature, incumbents have money, clout, and staying power. During the course of one’s career few incumbents fail, and only a few market entrants eventually acquire incumbency status. In the former category, Western Union did manage to lose its text market dominance and now generates most revenues from money transfers. In the latter category, the Internet has made incumbents of Google, Amazon, and e-Bay. But year in and year out, incumbents such as Verizon, AT&T, Comcast and Time Warner have the resources to sponsor research, appeal unfavorable regulatory decisions, and work the refs better than everyone else.
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