Hance Haney is Director and Senior Fellow of the Technology & Democracy Project at the Discovery Institute. Haney spent ten years as an aide to former Senator Bob Packwood (R-OR), and advised him in his capacity as chairman of the Senate Communications Subcommittee. He subsequently held various positions with the United States Telecom Association and Qwest Communications. He earned a BA in history from Willamette University and a JD from Lewis and Clark Law School in Portland, Oregon.
Kevin J. Martin, politically-savvy and a highly effective chairman of the Federal Communications Commission, has a strong free-market orientation. So why would the New York Timesreport that the FCC may be on the verge of enacting new regulation which would:
Force the largest cable networks to be offered to the rivals of the big cable companies on an individual, rather than packaged, basis;
Make it easier for independent programmers, which are often small operations, to lease access to cable channels; and
Set a cap on the size of the nation’s largest cable companies so that no company could control more than 30 percent of the market?
Martin believes “[i]t is important that we continue to do all we can to make sure that consumers have more opportunities in terms of their programming and that people who have access to the platform assure there are diverse voices,” according to the New York Times article. In other words, regulators (i.e., philosopher kings) should intervene to improve on the free market.
There are already plenty of opportunities for independent programmers to lease access to spare cable channels. The independent programmers aren’t excluded from cable networks. Making it “easier” for independent programmers to lease access to cable channels, according to one report, is code for a government-mandated rate reduction of 75 percent.
With all due respect for the views of my colleagues (here and here) and commenters, former Sen. Bob Kerrey had this, and other, mature insights in an op-ed which appeared yesterday in The Hill regarding whether to include immunity for telecom carriers in the Foreign Intelligence Surveillance Act (FISA) reauthorization:
Consider the atmosphere: the president had gone before Congress and said “one vial, one canister, one crate, slipped into this country, could bring a day of horror like none we have ever known.” So if these companies refused to cooperate, by implication, that dark day could be on their conscience. And now they cannot even defend themselves in court, because the details of the investigations remain classified.
Opposition to immunity isn’t aimed so much at punishing the telecom providers, but at obtaining information about what really happened and about reaffirming the significant legal duties that telecom providers have for safeguarding the privacy of their law-abiding customers.
I want to comment on Adam Thierer’s recent paper, “Unplugging Plug-and-Play Regulation,” which makes several excellent points. Adam briefly summarized his thesis (i.e., there is no need for government “assist” in private standard-setting) here a couple days ago and generated a couple comments.
The cable industry and consumer electronics manufacturers are touting competing standards initiatives. The pros and cons of each approach, from a technology perspective, are somewhat bewildering to a non-engineer like myself. But there appears to be one clear difference that matters a lot. Adam points out that under the initiative sponsored by the consumer electronics industry,
the FCC would be empowered to play a more active role in establishing interoperability standards for cable platforms in the future. [It’s] a detailed regulatory blueprint that specifies the technical requirements, testing procedures, and licensing policies for next-generation digital cable devices and applications.
Why would ongoing assistance be required from the FCC, which mainly consists of lawyers?
This week the Federal Communications Commission failed to muster 3 votes to deregulate the broadband access services of Qwest Communications, as it has already done for Verizon in early 2006. The nature of the relief we’re talking about is analogous to the commission’s reclassification of DSL as an “information” service rather than a “telecommunications” service in 2005. In both cases, the effect is to free broadband providers from onerous common carrier regulation, allow them to tailor their offerings to customer needs and not be forced to offer their services to competitors at regulated, cost-based rates for resale.
To be fair, the relief Verizon got didn’t garner 3 of 5 votes. Verizon’s petition was filed pursuant to Sec. 10 of the Communications Act, which provides that a forbearance petition (a petition which asks the FCC to forbear from applying a regulation) will be granted automatically unless the commission denies it for good reason within one year plus a 90-day extension. That didn’t happen, so Verizon’s petition was granted automatically. This procedure may not sound like an ideal way to conduct public business, but Congress enacted Sec. 10 because of a long history of FCC foot-dragging. The commission is a political animal, and many former staffers are employed by the companies the FCC regulates.
Essentially, thanks to this law, the government has potentially carved out from Fourth-Amendment protection an entire class of communication – electronic communications going to a person outside the United States, or coming to a person inside the United States. There is — and here again contrary to the public missives by the Administration and its supporters — no requirement whatsoever, implied or express, that even one of the parties to such category of communications subject to warrantless surveillance would first have to have any known or even suspect connection with any terrorist or other targeted group or activity.
Barr also repeated the warning of Judge Royce Lamberth, that “you can fight the war [on terrorism] and lose everything if you have no civil liberties left when you get through fighting the war…”
But no one — George Bush included — is advocating that …
Over at Huffington Post, Timothy Karr claims that “One attendee — a member of the Darwin-challenged Discovery Institute — sought to argue that the Internet be completely free of regulation” during the question and answers following Google Chairman and CEO Eric Schmidt’s address to the Progress & Freedom Foundation’s Aspen Summit. That would be me. Actually, I make no such argument. There is a place for antitrust enforcement (provided it aims to protect competition, not competitors) and consumer protection. I draw the line at economic regulation, or competition policy, which tries to ensure that everyone who can afford to hire a lobbyist profits and no one who can afford to hire a lobbyist fails in the marketplace.
Google wants the Federal Communications Commisison to make net neutrality a licensing requirement in the Upper 700 MHz spectrum band – “(1) open applications, (2) open devices, (3) open services, and (4) open access.” According to media reports, FCC Chairman Kevin Martin is circulating draft rules which would impose such a requirement (see: this, this and this).
What’s Martin’s agenda? I suspect he thinks he’s come up with a brilliant strategic maneuver – give Google the chance to acquire a nationwide broadband wireless footprint on the cheap and maybe the company will give up funding the advocates of net neutrality regulation. AOL ended its support for open access the minute it merged with Time Warner, didn’t it?
But as we learned from the 1996 Telecommunications Act, procompetition policy is tricky and unpredictable. That debacle proved Thomas Sowell’s observation that a self-equilibrating system like the market economy means a reduced role for intellectuals and politicians. Unfortunately, as Sowell added in an interview with Jason Riley, “even today many still haven’t accepted that their superior wisdom might be superfluous, if not damaging.” Nowhere is this more true than in communications policy.
The Federal Trade Commission is “unaware of any significant market failure or demonstrated consumer harm from conduct by broadband providers,” according to a Staff Report on Broadband Connectivity Competition Policy, which advises:
Policy makers should be wary of enacting regulation solely to prevent prospective harm to consumer welfare, particularly given the indeterminate effects on such welfare of potential conduct by broadband providers and the law enforcement structures that already exist.
The report indicates FTC staff believes it is “impossible to determine in the abstract” whether allowing content and applications providers (or even end users) to pay broadband providers for prioritized data transmission will be beneficial or harmful to consumer welfare. Similarly, staff feels broadband providers have “conflicting incentives” relating to blockage and discrimination against data from non-affiliated providers and that, in the abstract, “it is impossible to know which of these incentives would prove stronger for each broadband provider.”
A centerpiece of the Leahy-Hatch/Berman-Smith Patent Reform Act of 2007 (S. 1145 and H.R. 1908) is the establishment of an injudicious post-grant opposition procedure (also known as a “second window”). According to Chairman Howard L. Berman (D-CA) of the House Subcommittee on Courts, the Internet, and Intellectual Property, a new layer of review is needed because:
In an effort to address the questionable quality of patents issued by the USPTO, the bill establishes a check on the quality of a patent immediately after it is granted or in circumstances where a party can establish significant economic harm resulting from assertion of the patent. [emphasis added.]
There are several key problems with the proposed new procedure for post-grant review contained in sec. 6 of the Patent Reform Act of 2007.
According to Senate Judiciary Chairman Patrick Leahy (D-VT), constructive patent reform would “reduce the unnecessary burdens of litigation” in the patent system and “enhance the quality of patents” granted by the Patent and Trademark Office. Better patent quality ought to be the focus of discussion, because only bad patents lead to unnecessary litigation. Most people would agree courts ought to vigorously enforce good patents. The Leahy-Hatch/Berman-Smith Patent Reform Act of 2007 (S. 1145 and H.R. 1908) fails to reflect this basic point. The bills misguidedly treat the goals of improving patent quality and reducing litigation as mutually exclusive goals to some extent. The result will be to reduce protection for all patents, not just the bad ones.
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology. Learn more about TLF →
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.