FCC Commissioner Robert McDowell penned an outstanding piece in today’s Wall Street Journal (subscription) on the commission’s vote tomorrow on neutrality regulation.   The final paragraph is worth a Pulitzer:

On this winter solstice, we will witness jaw-dropping interventionist chutzpah as the FCC bypasses branches of our government in the dogged pursuit of needless and harmful regulation. The darkest day of the year may end up marking the beginning of a long winter’s night for Internet freedom.

Strangely, McDowell’s dire warning is similar to that of Senate Majority Comedian Al Franken, who warned today in the Huffington Post that if the proposed rules are adopted, “the Internet as we know it would cease to exist.”    Of course, his reasoning is a bit different, as he calls for more, rather than less regulation. 

Despite complaints from Franken and others on the Left that the FCC proposal doesn’t interfere enough with the Internet, the betting at the moment is that the FCC will adopt neutrality rules of some type or another tomorrow.   The the real battle begins, on two fronts.  In Congress, GOP members are anxious to use their new House majority (as well as their increased Senate heft)  to take a whack at regulation generally, and neutrality regulation specifically.   Secondly, in the courts, which decimated the FCC’s prior attempt to impose neutrality rules, and will no doubt will look skeptically at these new ones.

Should be an interesting 2011.  (BTW, my own piece on the issue, released on Friday, can be found here.)

Americans are increasingly cutting the cord on their phones.   By the most recent estimates, 40 percent Americans  rely primarily on their wireless phone for voice calls, and most of those don’t have a wireline phone at all.

 But don’t count me in that number.   Its not that I wouldn’t like to cut the cord.  It’s that I can’t.   I live in a cellular hole, one of those thousands of places where wireless connections are weak or non-existent.   The reason isn’t geography – I live in a well-developed part of the Washington metro area, not an igloo in Alaska.   Nor is the problem the Federal Communications Commission, though its efforts to regulate wireless may do damage in the future.

 No, the problem is much closer to home – my local zoning authorities.   Wireless carriers, as it turns out, had not forgotten my corner of the world, and have been trying to build a cellular transmission site to erase the dead zone for some time, but have been been stymied by an infinitely elastic approval process.

 The current plan for my neighborhood, jointly proposed by Verizon and T-mobile, is a sensible one, involving the construction of a tower at a nearby middle school.   The tower would be no higher than the steeple of a nearby church, and would be built at the football field designed to look like just another grandstand light pole.  To figuratively top it off, the carriers would pay the middle school some $30,000 up front and thousands each year afterward, for hosting the cell site.

 It all seems like a win-win for all involved, and the plan looked set to be OK’d by early summer.  But then, the NIMBY (not-in-my-backyard) crowd came along, raising a variety of complaints.   “It will be ugly, and decrease property values,” they said.  But the structure would be little different than the poles that are already there.   And in any case, would a prospective buyer be more deterred by the possibility of seeing a cell tower nearby, or by the lack of wireless service?

 The second concern is over the health effects of radiation from the tower.  But study after study has revealed no health hazards from cell towers.   Conversely, the lack of home wireless service does reduce safety – as anyone who had tried to use a cordless wireline phone when their power is out knows well.

 Based on these complaints, however, the plan was put on hold by a local county supervisor, who asked the zoning board to study alternatives.  A hearing on the whole matter is set for next week.

 The tower may yet be approved (as have others in the area), and I may soon be happily, and wirelessly, communicating from my home.  But the experience illustrates the obstacles that local governments can put in the way of new communications technologies.  While so much attention is focused on debates at the FCC and in Congress over technology policy, many of the key decisions about our communications future are in the hands of local officials.  Local discretion is not absolute – and is limited by FCC rules – but is nonetheless substantial.  

 So the next time you have a complaint about your phone service, you might want to call your county zoning board, not the FCC.   That is if your phone works at all.

As Steve Titch discusses below, Google and Verizon, two of the leading antagonists in the long-running drama over FCC net neutrality regulation, may be about to call a truce.   According to numerous media reports, the two firms have or soon will agree to a compromise framework for regulation, which would provide for a limited degree of regulation by the FCC.

The exact provisions of the compromise are unclear.   Reportedly, however, the plan would ban Internet access providers such as Verizon from blocking content outright, while allowing them to offer prioritized service for a fee.   The provisions would not apply to wireless Internet access, which would be kept mostly free of regulation.

While Google and Verizon have long been adversaries on this issue, it’s been no secret that the two have been working together to craft out common ground.   The two in fact, filed joint comments in the FCC’s rulemaking on the issue earlier this year, and the CEOs of the two firms even jointly authored a Wall Street Journal op-ed on broadband policy.

The incentives for both are clear.   With federal courts earlier this year rebuffing the FCC’s attempts to impose regulation, it was no doubt clear to Google that nothing could happen without a compromise.   Moreover, the “big is bad” tenor of the debate no doubt gave Google – one of the largest firms in our galaxy – reason to rethink.   For Verizon, a deal would provide some policy certainty, much-needed given the vast investments in broadband it is making.  And since the firm has always disavowed any desire to block wireline content, the new rules would come at little apparent cost.

For many die-hard neutrality regulation purists, the reported deal was seen as a Category 5 catastrophe.   “Google Decides It Can Be Evil,” read one post on the Daily Kos.   “The End of the Internet as We Know It,” wrote the always-understated Josh Silver of Free Press.

But the despair on the Left doesn’t necessarily mean this is a big victory for the free market.  Far from it.   For starters, the deal would give the FCC clear authority – which it does not now have – to oversee Internet service.   Even if this were limited to outright blocking of content and not other form of network management, there is reason for concern.   In 2008, remember, the FCC found Comcast liable for “blocking” BitTorrent traffic, even though that blocking was incidental and temporary.

Secondly, it is unclear how an exemption for wireless service would be crafted.  But such mode-specific rules tend not to cope well in the ever-changing wireless world. It may seem easy today to differentiate the two, but what happens in the future?  Most “wireless” traffic even today travel by wire as least some part of the way.  What happens if the two are intermixed further?  Does it matter if the services are marketed together?  Or if the distinction is made invisible to the user?  

Whatever, if anything is eventually agreed to by Google and Verizon, it is unlikely that the long-running Net Neutrality show will end anytime soon.   Over the past few weeks, FCC chairman Julius Genachowski has been facilitating talks among a broader group of interested parties on net neutrality.   There’s no reason to believe that an agreement between Google and Verizon would be accepted by that broader group, at least not without considerable changes.  AT&T, for instance, has already made it clear that it is not a party to any deal.   In addition, it’s nearly certain that any plan would have to be approved by Congress, which in the past has been a virtual black hole for telecommunications reform proposals.

The lawyers and lobbyists who have built their careers out of working this issue can rest easy.   For good or bad, the net neutrality debate is not ending anytime soon.

Could net neutrality rules be unconstitutional?  Maybe so, says Daniel Lyons of Boston College Law School.  In a piece released last week by the Free State Foundation (based on a more extensive research paper for Boston College last March) he argues that rules of the sort being considered by the FCC may constitute a taking of property under the Fifth Amendment. 

The idea that a regulation could be considered a “taking” is certainly nothing new.   For decades, courts have recognized the concept of “regulatory takings,” rules so restrictive that they constitute a seizure of property under the Fifth Amendment.  But Lyons doesn’t just argue that “net neutrality” is a regulatory seizure in some abstract sense. He argues that neutrality rules would constitute a very real  seizure of tangible, albeit invisible, property.

Specifically, he says the rules would allow content providers to “physically invade [ISP networks] “with their electronic signals and to permanently occupy space on those networks, all without having to pay the network owner for access.”   This, he concludes is tantamount to a forced easement to content providers.   As he puts it:

“[T]he 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… 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.”

The argument has generated quite a bit of debate, including a harsh rebuttal by Mike Masick over at Techdirt.   Calling it “ridiculously tortured,” he dismissed Lyon’s argument, relegating it to his “oh please,” department.

There is no physical invasion, Masick maintains.  Instead, he argues, ISPs voluntarily connect to the Internet, which allows their customers to request content which travels through the ISPs network.  “That’s how the open internet works. If the ISPs don’t like it, they shouldn’t have offered an internet service” he concludes.

But this reasoning is just a little bit circular.   Who decided that’s how the open Internet works?  Masick seems to assume that open Internet rules as a given, when that is in fact the issue.   And the fact that content is requested by users, rather than arriving from content providers unbidden, doesn’t necessarily change the situation.   Government regulations granting subscribers the right to decide what content travels over an ISP’s network is conceptually little different,  in Fifth Amendment terms, than giving access rights to content providers directly.

At any rate, none of these technical details seem to matter, since Masick also makes a sweeping – and rather startling – claim that ISP networks are not privately owned anyway.

“The key problem is defining the internet as a private broadband network,” he says, “when in nearly every case, the broadband infrastructure involved includes tremendous use of government granted rights of ways and other government subsidies.  If the telcos actually had built their network entirely on their own and negotiated privately with land owners for rights of way, they might have a point on this one. But they didn’t and they don’t’.

Putting aside the fact that not all ISPs received subsidies (or are “telcos”), the logical consequences of this line of reasoning are staggering.  If you got a subsidy or some other government benefits, the government now owns your network.  This will certainly come as a surprise to ISPs, and ISP shareholders, who thought they actually owned their networks.    But why stop there?  What of the millions of American’s with mortgages financed by Fannie Mae?   Or cars that they drive on government-owned roads? 

This is exactly the sort of thing the Fifth Amendment was intended to prevent.  Property is not something to be shifted, transferred or parsed based on the whim of policymakers (or bloggers).   You can’t just assume away property rights, just because they conflict with your notions of how things should be – or should have been – done.

In the end, I don’t know whether Lyon’s arguments will stand up to judicial scrutiny.   Courts have been reluctant to find regulatory takings without a clear taking of tangible property being involved.   And,  whatever the merits of the argument,  its hard to see a judge wading into electrical engineering arguments about the path of electrons.   But the argument is a serious one that should not be dismissed out of hand.

“When I use a word, it means just what I choose it to mean — neither more nor less,”  Humpty-Dumpty said.     The famous egg could have worked for the Federal Communications Commission, which today took the first step toward re-defining broadband service as telecommunications.

 The decision comes only two months after a federal court — rather definitively – ruled that the agency had no authority to apply net neutrality rules to Internet service providers.  But it only took a few weeks for Chairman Genachowski to come up with a plan B:  re-classifying broadband service as telecommunications service.   At today’s meeting, the Commission — on a 3-2 vote — adopted a notice of inquiry on doing  just that.   Never mind that the initial that broadband is not telecom was the result of a years-long inquiry by the Commission.   If the FCC says a computer is really a telephone, then it is.  Lewis Carroll would be proud. 

But Chairman Genachowski is not the Red Queen, and despite the decision today is still far from his stated goal of addopting what he calls open access regulations (formerly known as net neutrality rules).   Opposition to the plan has been surprisingly fierce — not just from the firms to be regulated, but from Congress, including many Democrats. All told, as counted by Commissioner Robert McDowell in a strong dissent —  some 291 members have expressed concerns about the proposal.    Not only do these members see possible economic harm from these rules, but also see the FCC as intruding on their law-making turf.   Economic theories may come and go on Capitol Hill, but nothing can rile up a congressman more than elbowing in on their jurisdiction.   Especially if that elbowing comes from an agency considered (however incorrectly in a constitutional sense) a creature of Congress.

 That’s only the start of the troubles.  Even if the inquiry is  is finalized, it will still face scrutiny by the courts, which are apt to look at such linguistic gerrymandering by the FCC skeptically.  

For these reasons, the FCC may be in for a great fall.

It may take years, however, for all this to work itself out.   And in the meantime, Internet providers and users will face uncertainty over the future of their services and their investments.   That’s the real cost of today’s move.  And how to get out of this deepening rabbit hole is far from clear.

No one disputes that a key goal of the FCC is to help foster diversity in, and minority access to, channels of communication. In practice, this all too often has been interpreted to mean ownership limits, set-asides, preferences and other mandates imposed by the Commission. Usually lost in the heated debates is the fact that ill-considered regulation itself can impede minority access and diversity.

In comments filed last week, a group of sixteen minority and civil rights organizations — ranging from the Lawyers’ Committee for Civil Rights Under Law to the National Conference of Black Mayors — argue that net neutrality regulation may do just that. “[T]his proceeding implicates one of the most important civil rights issues of our time,” the comments –written by David Honig of the Minority Media and Telecommunications Council — assert.

Minorities lag behind in broadband adoption, the comments point out, and thus have the most to gain by its growth and the most to lose if that growth is hindered. Among the more specific possible harms cited: higher prices, slowed deployment, and slower job growth, all of which would be especially harmful to minorities. Net neutrality regulation, Honig writes, could become yet another in a long line of facially neutral government policies that hurt the most disadvantaged in society rather than help them.

“The lesson from these experiences is clear,” he says:

…even apparently universal and neutral federal programs can widen existing disparities. As we now continue the transition into a digital age, the Commission should ensure that its efforts to promote a free and open Internet for all do not end up leaving minorities and other groups lacking equal access to broadband behind.

Definitely worth reading.

A funny thing happened to the FCC Friday on its way to regulating the Internet:  a federal appeals court panel questioned the agency’s authority to regulate the web.    There’s no final decision yet, but an adverse ruling could stop the agency’s Internet regulation plans in their tracks.    And for good reason.

In proposing new neutrality rules last October, the FCC one rather inconvenient obstacle:   there isn’t anything in the Communications Act, or any other statute, actually giving them power to regulate such things.   Internet service, by the FCC’s own reckoning, is not a telecommunications service, nor is it cable TV, or broadcasting, or anything else the law give the FCC authority to regulate.

The Commission, as it had in last year’s Comcast decision, dismissed such details, citing “ancillary jurisdiction.”  This court-defined doctrine, itself to be found nowhere in the text of the Communications Act, holds that the Commission can in matters that fall within its general statutory grant of jurisdiction and are “necessary to ensure the achievement of the Commission’s statutory responsibilities.”

It is in itself a remarkable legal theory, allowing a regulatory agency to act in areas where there is no grant of authority, simply because it is related to an area in which authority has been granted.   In a very real sense, it is a “horseshoes and hand grenades” doctrine, in which close is good enough to count. Even within the framework of ancillary jurisdiction, however, the case for jurisdiction in this case is startlingly tenuous and dangerously broad.  (For an excellent analysis of the problems, see James Speta’s new study here.)

On Friday, the FCC got to air out its arguments in court, during oral arguments in the appeal of the Comcast ruling.  By all accounts, it didn’t go well.  “You have yet to identify a specific statute,” said Judge Raymond Randolph at one point.  As the FCC’s lawyers metaphorically searched their pockets for something to cite, Judge David Sentelle added:  “You can’t get an unbridled, roving commission to go about doing good.”

Of course, comments at oral arguments don’t always signal how a case will be decided.  Still, things aren’t looking good for the FCC.   And an adverse decision would not just negate the Comcast decision, but also derail Commission’s plans to finalize the new, more extensive regulations they formally proposed last October.  As former FCC general counsel Sam Feder put it:  “A lot of regulation — both present and future — could go down with this case.”

The next step would be for everyone to trundle on over to Capitol Hill to continue the foodfight over net neutrality.  That’s bad news for regulation proponents, who had been hoping for a quick win.  But its good news for the rule of law, and the idea that the power to regulate isn’t at all similar to horsehoes.  Or hand grenades.

Stay tuned.

With the advent of new technology, newspapers are being threatened.  Many are expected to go out of business, and the rest will have to change substantially.  Many observers fear that journalism will become too driven by speed, and that judgment and deliberation will be lost.  Others said that news reporting would be devalued and only those providing analysis and opinion would survivie.  Worst of all, worries that the new technology will lead to a monopoly over information.

A description of the dire situation faced by newspapers today as they face the Internet?  No.  These are the concerns expressed in the 1840s as the telegraph transformed the news business.   This week’s Economist tells the story of how Samuel Morse’s invention was thought to signal the death knell for newspapers, and to thoughtful journalism.

As it turned out, the news business was tranformed.   But not in the ways many feared.   With faster communications, the quality of news, and of the information Americans received, improved.  Newspapers had to adapt, but survived and even prospered.  And no one ever created a monopoly over information.

 Good reading.

Bidding has begun on Comcast’s acquisition of a majority stake in NBC Universal.  No, not the bidding between GE and Comcast over the terms of the sale.   That was the comparatively easy part.  The real bidding is over at the FCC, as various interests work to get concessions and pledges from Comcast as a condition of FCC approval of the deal.   The jostling may put post-Thanksgiving Black Friday sales to shame.   Everything from more kid’s shows to broadband open access mandates are potentially on the table.

And that’s if the sale is approved by the FCC at all.   Groups such as Free Press called for its rejection as soon as it was announced.   Commissioner Michael Copps underscored the alpine nature of the approval process, stating bluntly that the deal “faces a very steep climb with me.”

Amidst the din, however, one question has been drowned out:  Why is the FCC involved in this at all?

It’s not an idle question.   The FCC does not, and never has, had general authority to approve or deny mergers in the media world.   In fact, major major deals — such as News Corporation’s purchase of the Wall Street Journal — didn’t involve the FCC at all (to Mr. Copps’ dismay.)

The FCC’s hook into such deals is in fact quite narrow:  the transfer of spectrum licenses.    And such transfers are a surprisingly small aspect of the deal.   None of the  key assets being purchased, Universal Studios, MSNBC or the other cable channels, or even the NBC network itself, is FCC-licensed (though some units may hold stray licenses for ancillary purposes).

In fact, the only significant licenses among NBC’ Universal’s assets may  be the broadcast licenses owned by NBC’s 10 owned-and-operated local stations.  And these are hardly the crown jewels of the transaction.    While Comcast may value the content provided by Universal or CNBC, why would it want broadcast stations?   After investing billions in a digital cable network, what earthly use does it have for towers and antennas?   It would be like American Airlines buying a stagecoach line to supplement its transportation network. 

Yet, based on this thin reed, the FCC has gained approval authority over the entire NBC Universal transaction.   It is of course, not the only agency that must approve — the the Federal Trade Commission or Department of Justice must also review it (which of the two is still to be decided).   These agencies are not pushovers, and their OK should be sufficient to answer any concerns about harm to competition from the deal.  

It would be bad enough if the FCC merely duplicated the FTC or DOJ reviews.   The additional delays alone could kill many deals — famously, it took the Commission 505 days to approve the merger of Sirius and XM Radio.   But the harm goes beyond that.   Unlike the antitrust authorities, who base their review upon established law, the FCC uses a free-roaming and undefined “public interest” test.   As a result, the FCC’s reviews are largely unconstrained, and approval or rejection can be based upon virtually any factor that three of five commissioners find to be plausible.   The result is a highly unpredictable, and political, process in which anybody can propose their own wish list of conditions and rationales.

It makes one wonder why Comcast didn’t just say “no thank you” to the local broadcast albatrosses.   But the bigger problem is with the law that gives the FCC such unneccessary and unconstrained power in the first place.   Its unlikely for the moment, however, that Congress will be inclined to take away that power, or that the FCC will not use it.   So it looks like the bidding will continue.

Stay tuned.

November was certainly a bad month, public relations-wise, for the Administration’s stimulus program, what with claims that the program had created huge new numbers of jobs debunked.  (Who would have guessed that numbers given for Arizona’s 15th congressional district or Minnesota’s 57th district were wrong?)  But, as pointed out last week by my collegue Meinan Goto, there may be further trouble ahead.    In a report recently released by the GAO, the government watchdog agency warns of possible waste, fraud and abuse in $4.7 billion broadband stimulus grants to be made by NTIA and the Rural Utilities Service.  

The risks stem from a variety of sources, including the speed with which the grants are to be made, and the two agencies near-total lack of any experience with grants of this magnitude.   The GAO  also points out that, in true cart before horse fashion, NTIA and RUS will have to complete its first, and perhaps both, funding rounds before  a  map showing where broadband is needed is completed, and before the FCC completes its congressionally-mandated plan on to make broadband available.

GAO, of course, isn’t the first to point out this cart-and-horse situation, but that doesn’t make it any less serious.  While less headline-grabbing than invented congressional districts, the report is nevertheless worth reading by anyone who thinks $4.7 billion is still real money.

Should the federal government regulate what blogger’s blog? Yes, said the Federal Trade Commission yesterday — at least when it comes to product endorsements.

At issue were the FTC’s guidelines concerning the use of endorsements in advertising. These guidelines, among other things, require paid endorsers of products to disclose their relationships with advertisers. The goal is a good one, to prevent deception and fraud. In practice, the lines are hard to draw — what exactly is an endorsement? What constitutes payment? It gets even harder in today’s world of user-generated media, in which much advertising is by consumers themselves on blogs and elsewhere, sharing recommendations and opinions on just about everything.

In revisions announced Monday, the FTC explicitly extended the rules to blogs for the first time. Perhaps more importantly, it did so even for casual bloggers with only the slightest compensation from the seller. Here’s an example from the guidelines:

“A college student who has earned a reputation as a video game expert maintains a personal weblog or “blog” where he posts entries about his gaming experiences. Readers of his blog frequently seek his opinions about video game hardware and software. As it has done in the past, the manufacturer of a newly released video game system sends the student a free copy of the system and asks him to write about it on his blog. He tests the new gaming system and writes a favorable review. Because his review is disseminated via a form of consumergenerated media in which his relationship to the advertiser is not inherently obvious, readers are unlikely to know that he has received the video game system free of charge in exchange for his review of the product, and given the value of the video game system, this fact likely would materially affect the credibility they attach to his endorsement. Accordingly, the blogger should clearly and conspicuously disclose that he received the gaming system free of charge.”

In effect, the blogging college student is pigeon-holed as a paid endorser, even though he hasn’t been paid to say anything in particular, and only receives what looks like rather common promotional material.

He likely doesn’t even see himself as an endorser of any kind, he just writes his opinions, which others find useful. No one is hurt. Yet, unless he discloses that he got the video — gasp — for free, he may find himself facing fines from Washington.

Its a classic example well-intentioned rule taken too far. And not only are consumers hurt — as product recommendations from other consumers are made scarcer, but free speech itself is chilled as individuals become less willing to put virtual pen to virtual paper out of fear that they may violate some obscure federal rule.

It is a decision I cannot endorse.

[10/7 update:  An astute reader noted that the blogger in the illustration above received a “video system,” not a “video,” a much more valuable item.   Nevertheless, I remain troubled by the guidelines application.]

Is the Internet in clear and present danger?   Yes, say proponents of neutrality regulation of the Internet.  In his speech last month calling for FCC neutrality regulations, Chairman Julius Genachowski stopped short of quoting Oliver Wendell Holmes, but did all he could to paint a dire picture of the Internet’s future: “This is not about protecting the Internet against imaginary dangers,” he said.  If we wait too long to preserve a free and open Internet, it will be too late.”

The warning evoked a certain sense of deja vu, and for good reason.  As Link Hoewing over at Verizon pointed out the other day, proponents of neutrality regulation “have been yelling ‘fire’ in the movie theater ever since 1999,” when they decried the trend toward cable firms providing exclusive ISP service on broadband networks, saying that the move would result in “more price increases and fewer choices for consumers and content providers alike.”

The end has been nigh many times since.  In 2003, when a court upheld the FCC’s decision not to regulate broadband as a telecommunications service, Commissioner Michael Copps said “the Internet may be dying,”  glumly predicting that if the Commission continued its free-market policies, “we will look back, shake our heads and wonder whatever happened to that open, dynamic and liberating Internet that once we knew.” 

Not to be outdone, in 2006, as the debate over tiered pricing raged, Jeff Chester of the Center for Digital Democracy also warned of the “end of the Internet,” stating that “without proactive intervention, the values and issues that we care about–civil rights, economic justice, the environment and fair elections–will be further threatened by this push for corporate control”.

The predictions of the Internet’s death, however, were not just exaggerated, they were wrong.   Monumentally wrong.  As Hoewing points out,  the entry-level price for broadband service was $50 per month in 2001, dropped to $33 in 2004, and to $25 in 2007.  And more people are using it — seven of ten households were still using dial-up in 2004, today only 1 in 10 do.  And typical broadband speeds have more than doubled in that time.

Genachowski may have had these facts in mind when, in last month’s speech, he said: “This is about preserving and maintaining something profoundly successful and ensuring that it’s not distorted or undermined”.

Well put.  And that’s exactly why we must not impose new and unneeded regulation on the Internet.

FCC chair Julius Genachowski has certainly been busy.  This week, of course, he’s been occupied with regulating the Internet.   But last week, he was busy fending off charges on talk radio and elsewhere that the FCC has its very own “speech” or “diversity” czar.

At issue was the appointment in August of ex-journalist and Center for American Progress fellow Mark Lloyd to be the agency’s “chief diversity officer.”  That appointment instantly caused controversy, with Lloyd has becoming a cause celebre  on conservative talk radio and in the blogoshere, where he was been portrayed as yet another in a long line of powerful and unaccountable Obama policy czars and – in light of his support of government regulation of TV and radio content – a threat to free speech.   Nationally syndicated talk show host Glenn Beck led the charge, at one point twittering his listeners: “Watch Dogs: FIND OUT EVERYTHING YOU CAN” about Lloyd and several other “czars.”

But the critics had their facts wrong.   Lloyd was never chosen to be a “czar” of anything. That regal title – and its connotations of unlimited influence — were entirely invented by overactive imaginations in the media. Lloyd’s actual position in the FCC bureaucracy is much more prosaic — “associate general counsel.” He serves in that position along with three other associate general counsel, and three deputy general counsels. Anyone who’s worked at the FCC knows that  is an unlikely locus of power.

His role as “chief diversity officer” is a little less clear. It’s a new position for the FCC, but in the private sector it is an increasingly common one, essentially coordinating internal workplace initiatives.  One might question the usefulness or value of such as position, but it hardly makes the holder a czar.

But what of his policy views?  Here, there’s more to chew on, with Lloyd writing and speaking extensively in favor of media controls.   Perhaps most notably, in 2007, he co-authored a piece on the “Structural Imbalance of Political Talk Radio,” arguing that talk radio is disproportionately conservative in tone, and suggesting steps government could take to “address the imbalance.” Among them: stricter requirements that radio stations address the “needs and interests” of their communities,” and show they are operating in the “public interest.” And if they don’t? They would pay fines, which would be used to fund public broadcasting.  In practice, this would likely amount to a tax on politically disfavored speech.

The paper stopped short of endorsing a return to the FCC’s old Fairness Doctrine, but not because Fairness Doctrine violated the principles of free speech, but because it was not “effective.” But the steps recommended in the study are explicitly intended to reach the same end by other means. And that end – changing the content of  media through government action – is offensive to First Amendment values.

Lloyd’s critics argue that these views are extraordinary, putting him hopelessly out of the mainstream of debate.  But again they are wrong.  But the real problem is not that Lloyd’s views are extraordinary. It is that they are far too ordinary in some political circles. The 2007 talk radio report, for instance, was not a random screed – in fact it had seven authors and was jointly published by the Center for American Progress and the advocacy group Free Press. The fact is that there is significant political support to control the content of speech, especially conservative speech.

Chairman Genachowski, asked about Lloyd’s appointment, asserted that Lloyd would have no role in broadcast licensing issues.   He also maintained that he did not support speech controls, stating his opposition to the Fairness Doctrine by the front door or the back. “I believe deeply in the First Amendment, he added, “and oppose any effort to censor or impose speech on the basis of political viewpoint or opinion.”

That’s good news. But it would be more reassuring if he specifically rejected the ideas in the Lloyd paper. And if other policymakers – some of which are on record as supporting the Fairness Doctrine itself – did so too.

No, there is no “speech czar” at the FCC. But that doesn’t mean there is no threat to speech.  There is a very real threat.  As the adage says, just because you are paranoid doesn’t mean they aren’t out to get you.

Haven’t they been punished enough?  Inmates in our nation’s prisons may find themselves without over-the-air television next February, unless Congress acts to fill a gap in the subsidy program for TV converter boxes.  That’s right: according to a story run last week by Associated Press, “the upcoming switch to digital television is presenting a challenge to prison officials who want to make sure prison TVs are up and running. When broadcasters make the switch in February, televisions that aren’t hooked up to cable, satellite or a converter box will be reduced to static”.

The reason?   Under the converter box subsidy program established by Congress, prisons are not eligible for the $40 subsidy for the converter boxes needed to let old televisions pick up broadcast signals after next February.  That means — unless prison officials somehow find $40 elsewhere — or unless their penal institution has a cable or satellite subscription — incarcerated murderers and thieves will be forced to watch static.

Honest to god.  I’m not making this up.  This was an actual news story.  The AP story went on to explain that “[w]hile TV might seem like an undeserved luxury for inmates, both prison officials and prisoners said the tube provides a sense of normalcy.”

Oh, now I understand.  “Normalcy.”  I didn’t understand that prison is supposed to provide a sense of normalcy.

Excuse me while I sit in stunned silence for a moment.

One interesting side note.   I found the AP story on the website of WYFF in Greenville, SC, which — perhaps not surprisingly — is an over-the-air TV station.  Go figure.

Communications Daily (subscription) reported today on the avalanche of lawsuits being filed challenging the FCC’s Comcast “net neutrality” order.   Four were filed this week in four different U.S. appeals circuits — the lucky court that will actually decide the case will be decided by lottery.

The story quotes Ben Scott of Free Press, the energizer rabbit of pro-regulation media groups, decrying Comcast’s appeal.  “The Internet is too important to let Comcast tie it up in legal limbo,’ he says.  “Congress should act now to pass Net Neutrality laws that clear up any uncertainty once and for all.”

Huh?  On what planet, exactly, is Free Press based?  Put aside for the moment the question of whether Comcast is responsible for the legal chaos that has ensued from the FCC’s decision to regulate the way it manages Internet traffic.   Strangely enough, when Free Press petitioned the Commission to get involved, I didn’t hear them decrying the “legal limbo” it would cause.

But even more jaw-dropping is the idea that Congress could “clear up any uncertainty” by adopting its own Internet regulations.   The mind boggles.   The last major congressional foray into communications policy was the Telecommunications Act of 1996, which spawned over half a decade of litigation.  There are still children of telecom lawyers going to college off the fees generated by that one.

And that legislation was a relative piece of chocolate cake compared to the torte of net neutrality.   Proponents of mandated neutrality — which Commissioner Robert McDowell has likened to a regulatory Rorschach test — can’t even agree on what it is.  Lord know how long it would take the courts to sort it out — if ever they are able to.

Free Press is right, of course, to worry about the endless litigation which will — and already is — being caused by FCC Internet regulation.   Rather than even more rules from Congress, however,  the solution is for the FCC to reverse course on the regulation it unwisely imposed last month.

Some good news for bloggers.  This was posted today on the Heritage Foundation “Foundry” blog by Dave Mason, former chairman of the FEC (Mason is now working with us at Heritage as a Visiting Senior Fellow):

“Bloggers and web site operators may support, oppose, link to, and work cooperatively with federal political candidates. This freedom was reaffirmed when the newly re-constituted Federal Election Commission released its first two enforcement cases August 12.

The Commission’s refusal to regulate blogging and internet sites is not new, but it is notable is that the pro-blogger decision was made within a week or two of the new Commission taking office. Of the scores of items on its docket, the new Commission chose to address this one first: quite likely because they wanted to send a signal to that bloggers are free to engage in politics

Specifically, the Commission said that Gordon Fischer, a former state political party chairman, did not violate election law when he maintained a web site and blog (Iowa True Blue) promoting Barack Obama and criticizing Hillary Clinton. (Our friends at CCP note that the complaint was filed by a Clinton supporter: observing that all too many FEC complaints are filed for political harassment

–Money that Fischer spent creating and maintaining the site was not regulated by the FEC.

–Even if Fischer coordinated (discussed the blog and postings) with the Obama campaign, the site remained free from Federal election regulation.

–A link to a campaign web site or video does not subject the site linking to the campaign to regulation.

–blogs and web sites may “republish” campaign material without violating election laws.

Bottom line: by making this case one of the first two it released, the Federal Election Commission reaffirms that bloggers and web site operators may support and oppose political candidates, republish or link to campaign material, and work as closely as they wish with campaigns in doing so.

The one activity that remains subject to FEC regulation is paying for an ad on someone else’s web site supporting or opposing a Federal candidate.”

An interesting poll out today by pollster Scott Rasmussen:  Asked whether the government should require all radio and television stations to offer equal amounts of liberal and conservative political commentary,  47 percent — nearly half — said “yes.”  (39 percent were opposed).  Perhaps even more surprising, support has increased since last year, when Americans split evenly (41-41) on this issue.

Perhaps this shouldn’t be a  surprise.  Americans, after all, have long been lukewarm about the First Amendment, with opinion polls famously (though perhaps apocryphally) have long shown  would itself be opposed by most Americans.   Moreover, a casual answer to a pollster is a long way from active support of a particular law.

Still, the results of this poll should be troubling for defenders of free speech in general, and opponents of the fairness doctrine in particular.   Although an explicit re-institution of the long-dead doctrine is still not likely, this poll underscores the general danger of other content controls that may achieve the same ends under a different name.

Oh, and those of you who get their news from blogs shouldn’t feel too cocky about the dangers faced by the old-fashioned broadcasters.  The same Rasmussen poll showed that 31 percent of the public supports Fairness Doctrine controls on blogs, too.

This morning’s Drudge Report features the stories everyone is talking about today, with reports on U.S. swimmer Michael Phelps winning another couple of gold medals, the latest on the Russia-Georgia war, and — of course — FCC commissioner Robert McDowell on threat of the Fairness Doctrine and net neutrality regulation.

Well, maybe the first two stories are getting a bit more attention, but McDowell’s remarks —  made at The Heritage Foundation yesterday after a blogger’s briefing  — is getting a surprising amount of coverage in the blogsphere and trade press.

The remarks were originally reported in a story on the Business and Media Institute website, in response to a question about prospects for a Fairness Doctrine revival.   McDowell responded that it the issue hadn’t been raised at the FCC, but went on to state that there is a danger of similar rules put into place under a different name.   A spot-on analysis, as we’ve argued many times before. (see video here.)

He then went on to say that the Fairness Doctrine “will be intertwined with the net neutrality debate” (net neutrality was the primary focus of his remarks at the Heritage briefing).  Referring to concerns of regulation supporters — including what he called “a few isolated conservatives” that large corporations will censor their content, he said the “bigger concern should be if you have government dictating content policy.”

Most of the coverage of McDowell’s remarks interpreted McDowell as saying that the Fairness Doctrine itself might be extended to blogs (i.e, the Drudge headline: “Return of ‘Fairness Doctrine’ Could Control Web Content…”).  Such a direct extension of the old broadcast-only fairness rules is unlikely though.   Instead, McDowell I think was raising the danger that net neutrality regulation could be the source of such web content controls.

That same danger was raised last year by Adam Thierer, who argued in a Progress and Freedom Foundation paper that net neutrality regulation was in fact “a fairness doctrine for the Internet.” As Adam explained: “It’s a brilliant tactic by the Left. Why exert all your energy attempting to reimpose “fairness” mandates on broadcasters alone when you can capture them, and much more, by regulating the entire Internet? After all, in a world of media convergence and abundance, bright lines dividing distinct media sectors or their products have vanished. Everything from TV shows to text messages run on multiple networks, making the old, broadcast-oriented Fairness Doctrine a less effective means of reestablishing a liberal media monopoly. So the liberals got smart and came up with the perfect solution: use net neutrality as a backdoor way to impose the Fairness Doctrine on the entire media marketplace.”

Adam’s piece is worth reading.   And Commissioner McDowell — while not receiving gold medal at the rate they are being collected by Michael Phelps — certainly deserves kudos for raising the alarm bells on this aspect of net neutrality.

It’s over.   The FCC, which voted to approve the merger between satellite radio firms XM and Sirius two weeks ago, finally released its formal report on the case on Tuesday, ending the drama 505 days after the firms submitted their application to the Commission.

The episode was not the FCC’s finest hour.  The agencies once-vaunted “shot clock” — by which the FCC pledged to decide on mergers within 180 was left in shreds, with the counter going around almost three times before the circus finally ended.   Even at that, XM and Sirius managed to claw their way to approval only by making an (ever-longer) series of “voluntary” commitments:  including offering “a la carte” programming, capping prices for 36 months, making 8% of its capacity available to others to non-commercial and other entities, and extending service to Puerto Rico.   Even more was being considered when the music stopped, including a proposal to require all satellite radio receivers to have built-in HD broadcast tuners as well. (Apparently, there was concern that broadcasters would be frozen out of the audio market, in which they hold a market share of about 96 percent).

This regulatory free-for-all contrasts with the approach taken by the Department of Justice, which — after a fact-specific inquiry, approved the merger –  without conditions – five months ago.

This difference is more than a one-off burp, some momentarily loss of focus, over at the FCC.  The difference is a long-standing  one.  The statutory changes, and institutional culture, of the two agencies is vastly different.  The DOJ, is charged with enforcing competition laws, using a fairly well-accepted set of guidelines and economic principles.  And, for all its faults, its considerations  tend to be economic and factual in nature.   The FCC, by contrast, is a political animal, besieged – and often co-opted – by competing industries and interests.   And its statute allows it to go beyond questions of competition and consumer choice to open-ended and undefined inquiries as to what is in the “public interest.”

The problem is not a new one.   Former Commissioner Harold Furchtgott-Roth has long railed against what he has called the FCC’s “policy exploits masquerading as merger reviews.”

Rather than another round of reform of the FCC’s merger processes, the answer is to scrap the FCC’s merger review authority entirely.   The effects of mergers on consumers and competition are sufficiently, and best, weighed by the competition authorities.  Broader public interest factors — if those can ever be defined — are better addressed in a broader policy context, not in the hothouse atmosphere of a merger review.

Don’t expect the FCC to be stripped of its role anytime soon, however.   The sad reality is that, while most everyone who has seen an FCC merger review up close knows the problems, after it’s over no one has an interest in fixing it.   The newly-christened Xm Sirius certainly has no dog in that fight.  CEO Mel Karmazin no doubt hopes he will never go through an FCC merger review again.  Moreover, for most firms, FCC merger authority may be just as likely to be a useful weapon against competitors as a threat to their own plans.

So despite the XM Sirius debacle, expect the circuses to go on.  And on.   And on.

The FCC last Friday may have jumped with both feet into the business of regulating the Internet, but someone forgot to tell the folks that run the Commission’s website.   “The FCC Does Not Regulate the Internet or Internet Service Providers (ISP)” the “consumer publications” page of FCC.gov is still proudly telling visitors, referring them over to their state consumer protection office or to the Federal Trade Commission as the proper agencies for such things.

In the past, I’ve been critical of the shambolic way in which the FCC’s website is run.  But in this case, the problem isn’t with the web folks – they have the policy exactly right.  It’s the FCC, not FCC.gov, that’s bungled the job.

Someone at the Commission will eventually tell the website folks to fix the error.  But who will get the Commissioners to fix theirs?

Some surprising news from the folks at Broadcasting and Cable magazine: Barack Obama is now against restoring the Fairness Doctrine.  In an email Wednesday to B&C, press secretary Michael Ortiz wrote: “Sen. Obama does not support re-imposing the Fairness Doctrine on broadcasters.”  With John McCain already firmly in the anti-fairness regulation camp, that means that both major presidential candidates are now on record against reinstituting the former FCC policy.

So is it time for fans of the First Amendment to break open the bubbly?   Well, not quite.  While welcome, the Obama statement was hardly a vigorous denunciation of the doctrine, or its chilling effect on speech.   In fact, it doesn’t seem the senator actually opposes the rule, as opposed to not supporting its return.  (Notably, he hasn’t yet signed onto the “Broadcaster Freedom Act,” which would ban its re-imposition). According to Ortiz, the reason for the senator’s non-support is that he “considers this debate to be a distraction from the conversation we should be having about opening up the airwaves and modern communications to as many diverse viewpoints as possible.”

Not because it is a violation of free speech principles, or because it is insidious government censorship, not even because it is counter-productive, but because it’s a “distraction.”

A distraction from what, you ask?  Other forms of media regulation of course, including, according to Ortiz: “media-ownership caps, network neutrality, public broadcasting, as well as increasing minority ownership of broadcasting and print outlets.”

As has been argued many times before (including here, here, here, here, here, and here) it looks like the battle against government interference in media won’t end with the Fairness Doctrine, but will continue – and in fact is already under way — under different names.

Human Events’ John Gizzi is reporting today that House Speaker Nancy Pelosi “signalled her strong support” for revival of ‘The Fairness Doctrine,'” yesterday at a breakfast meeting hosted by the Christian Science Monitor.  The report sparked a flurry of activity by supporters of Rep. Mike Pence’s stalled Broadcaster Freedom Act, which would permanently ban re-institution of the regulation.  

The reaction to Pelosi’s comment is rather surprising, given that its hardly news that the Democratic leader would support the doctrine.   Last year, in fact, it was reported that she would “aggressively” pursue reinstituting the doctrine.   That never happened, and in fact the House ended up voting for a one-year appropriations rider banning the FCC from reviving it.   

News or not, the renewed attention for the Pence effort is welcome.   Still, supporters of free speech shouldn’t fool themselves into thinking that this is the whole of the battle, or even the main theater of conflict.  In truth, while many still give lip service to the Fairness Doctrine, the real battle over media regulation is moving forward — with closed lips — elsewhere.   Free Press and the Center for American Progress laid out the strategy last year in a report on how to balance the “conservative bias” on talk radio.   Their recommendations ranged from media ownership restrictions to vague “public interest” requirements enforced by the FCC.  Tellingly, the report dismissed the Fairness Doctrine itself as ineffective.

The battle over stealth fairness regulation may already underway at the FCC, which has already launched a proceeding to consider imposing rules on broadcasters to ensure local content and diversity on radio and TV, giving regulators renewed powers to control what is said and heard.     And, as Cord Blomquist has pointed out: “Localism will compel speech of which FCC Commissioners … approve. In a world of limited broadcast hours, compelling one sort of speech means sacrificing speech of another, effectively censoring speech.”

We’ve heard that song before.

Mike Masick over on Techdirt yesterday decried the “amount of misinformation flying around” on the retention marketing issue.  Unfortunately, however, his attempt to clear things up actually added to the airborne debris. 

Specifically, Mike claims that I erred the other day in writing that the question at hand was whether Verizon can contact customers who have agreed to switch telephone service providers, and ask them not to switch.  That, he says, is incorrect.  Saying that “no one” is saying that telcos can’t try to convince customers not to switch, he claims the issue is instead whether Verizon can delay  making the change while it trys to take them out of it: 

What the FCC has said is that Verizon cannot abuse its position to block the switch while it tries to convince customers not to switch. That’s what Verizon is doing. When it gets the request from the cable companies to switch, it basically goes into procrastinate mode, even though it’s required to process the switch. It codes the switch request as a “conflict” which gives it extra time to resolve the “conflict” before obeying the switch request.

Masick is simply wrong.  The FCC’s order, released Monday, explains clearly that a conflict code is entered only after Verizon is successful at convincing a customer not to change carriers.  There’s no claim that, or even a reference to, Verizon improperly delaying any pending switch requests (although the cable industry is certainly pushing for telcos to be required to make switches more quickly).

What the FCC did say was that the information contained in the switch request (i.e., that the customer wants to change), is “proprietary,” and that — to quote Commissioner McDowell: “marketing efforts [based on that information] cannot take place during the window of time when a customer’s phone number is being switched”.

Bottom line:  I stand by my original post.

Targeted by Chairman Kevin Martin’s apparent war on cable, the cable industry has had a tough time at the FCC of late. Being a cable lobbyist at the FCC today is like being a Communist in the State Department in the 1950s. One can just imagine the question: “Are you now, or have you ever been, a user of coaxial technology?”

That said, the cable folks don’t always lose. Just this Friday, they won one – handing a defeat to Martin. The problem is that its one they really should have lost.

The question at hand (addressed ably by Berin Szoka on Friday, and by Adam Thierer earlier) is whether telephone companies should be able to contact customers who have requested that their phone numbers be switched over to a competitor, and try to convince them not to switch. Several cable firms filed a complaint against Verizon over the practice early this year. The practice is anti-competitive, they said, pointing out that Verizon was able to ply customers with “price incentives and gift cards” to convince them not to switch.

In April, the FCC staff said it would side with the telcos on this one. But on Friday the commission voted 4-1 – with Chairman Martin the only ‘no’ vote – to ban the practice.

That is unfortunate. Far from being a threat to competition, being able to fight to keep your customers – and even to ply them with a few incentives – is at the heart of it. The practice is common in other highly competitive industries – just try letting a magazine subscription expire. In fact, as Verizon’s Tom Tauke argues, cable firms have long engaged in similar activity to keep customers from moving to telco video service. Why should it now be wrong for telcos to do the same thing for telephone services?

I don’t say this often, but Chairman Martin was right on this one. Not because cable should lose, but because consumers would win.

Americans have a love-hate relationship with their cellphones.   Consumers have adopted wireless telephony with a passion — with over 250 million subscriptions at last count.  Many would rather venture out without their pants than without their phones.  Yet,  at the same time,  Americans seem deeply suspicious of the little devices,  perhaps believing that anything this convenient must be harmful.  

The latest case in point:  a video circulating on the net purportedly showing how radiation from cellphones can pop popcorn.   Posted on youtube and circulated endlessly by email, the video has been viewed millions of times.  It appears to to be an amateur recording made in someone’s living room, with a group of friends to put three cellphones in a circle around some popcorn kernels, then call them — making the phones ring and the popcorn pop to much merriment.

The unspoken message:  if these gizmos can explode a kernal of corn, what are they doing to your brain?

The problem though is that the whole thing is a hoax.   A total fabrication.  As it turns out, the radiation from even three cellphones isn’t even enough to warm up corn, never mind pop it.  As one commenter on the video put it:  “A 1 kilowatt microwave takes around one minute to pop its first kernel, and that’s in a closed environment. A cell phone transmitter operates from 0.1 to 1 watt, but this video shows these kernels popping almost immediately.”

And I’m not an electrical engineer, but I suspect that having the phones ring doesn’t change the equation much.

Of course, hoaxes are hardly unique on the Internet — they been around since Bill Gates first offered to give everyone a dollar for every e-mail they forwarded.   This hoax, however, is particularly pernicious.   As it turns out, it’s not just a random gag played by some pranksters.  This particular video was produced by a company called Cardo Systems as part of a viral marketing campaign.

The company is now being straightforward about its role, even featuring the video on its website, and posting versions of the video with the tag “made by Cardo Systems.”  The idea, presumably is that it was just a good-natured joke.   Still, the hardly unpredictable effect is to stoke public fears about cellphone use, particularly fears about putting the devices up to their ears.  Cardo conveniently enough, makes bluetooth earphone attachments.

They should be ashamed.

Remember the Sirius-XM deal?   It was in all the papers March before last, when the two satellite radio firms asked the FCC for permission to merge.   The FCC still hasn’t made a decision on the issue (the Justice Department approved the deal earlier this year.)

Yesterday on CNBC, FCC chairman Kevin Martin was asked when an answer might be forthcoming.  “We’re taking a close look at that and I suspect the commission will act soon,”  Martin stated.   CNBC’s Mark Haines was a bit taken aback by the vague response, asking how it could possibly take nearly a year and a half to review the transaction.  “Aren’t you under some obligation to answer these guys, if not today, tomorrow or very soon?, ”  he asked.  

Martin wasn’t at all plussed, responding: “I do hope we’ll be able to get back to them soon.” 

Hope to get back to them soon?   Talk about putting someone on hold.  One can just imagine it:  “Thank you for calling the FCC.  Your $4 billion transaction is very important to us.  A regulator will get back to you very soon.”  

After 445 days of consideration, you’d think the FCC could do better than this.  This is an agency, after all, that used to brag about it’s 180 day “shot clock” for merger review.   But that clock has long expired (even though the FCC didn’t even formally start the ticker until the 78th day).

XM and Sirius deserve more than “we’ll get right back to you on that” platitudes.   The FCC needs to decide on the merger — yes or no.  Then it needs to review it’s merger review procedures to find out what’s gone so terribly wrong.   Although there’s no telling how long that could take.

 As Mark Twain might have said if he followed spectrum policy: the reports of the death of central planning in Washington have been greatly exaggerated.  As early as next week, the Federal Communications Commission may vote on a plan mooted by Chairman Kevin Martin to auction off 25 MHz of spectrum to the highest bidder, with a catch:  reportedly, the licensee will have to use the spectrum to offer free broadband service, with a network to be built out on a timetable specified by the FCC, and with content that doesn’t offend the regulators in Washington.

For most of the last century, the FCC was in the business of defining how spectrum would be used – deciding not only who would get it, but what services they would use it for, and under what conditions.  Over the past 20 years, however, the idea of central planning has fallen into disrepute, not only internationally (see Soviet Union) but in Washington.   The idea that five individuals in Washington – no matter how intelligent and well-dressed – could know the proper uses and methods of providing wireless services for millions of people became increasingly hard to defend.  After a disastrous start to the cell phone era – which was delayed by a decade or more do to FCC delays, the central planning model was largely replaced by markets, with licenses assigned by open auction, and (more importantly) uses and business models defined by consumer demand.

By the turn of the 21^st century, the FCC’s planning colossus had been effectively toppled, with some of the biggest tugs at the ropes by the Clinton era-FCC.  The rest, as they say, is economic history.   Over the last 20 years, the number of Americans with wireless has grown from two to 255 million, while the devices they use have transmogrified from brick phones to multipurpose units that do everything but the user’s laundry.

 Chairman Martin’s proposal would take a giant leap backward from this marketplace success.  It isn’t the first attempt by the present FCC to try to direct spectrum use.   In auctions earlier this year of former analog television spectrum, the FCC set aside blocks for “open access” uses, and for spectrum to be used in partnership with public safety users.   The auctions were remarkably unsuccessful – with the one block failing to meet its reserve price, and the other fetching far less than similar, unencumbered, spectrum. Apparently undeterred, the latest plan goes even farther to displace market (and consumer) preferences with those of regulators.  According to published reports, licensees of the newly-assigned spectrum will be required to use it to offer broadband service, free of charge — a politically popular business model but not necessarily the best way to finance an advanced network. The timetable:  service to half the population in four years, and 95 percent by the end of the license term.  And while the auction is open, the rules seem remarkably tailored to a plan put forth by one particular firm, M2Z.  

 Lastly, content filters on the new broadband network would be required to keep minors from receiving any “obscene” or “pornographic” materials over the assigned frequencies.   While a laudable goal, this would be a major — and constitutionally questionable — extension of the government’s power to control content.  It would also be a nightmare of net neutrality proponents comes true:  except that the restrictions would come not from a private company, but from the government itself.

 The FCC should reject this ill-conceived plan, and toss central planning back into the overstuffed dust heap of regulatory history.

“[T]here are two policy goals on which we need to make real progress,” the FCC’s Michael Copps told Congress last year, “minority and female ownership is one, localism is the other.”   Indeed, the two goals have long been sandwiched together like ham and cheese by media reformers on the left.  

 But it turns out the two may not mix so well after all.   According to the Minority Media and Telecommunications Council and the Independent Spanish Broadcasters Association,  many of the FCC’s proposals to advance localism will actually harm minority broadcasters.  Because of their “relatively small size and limited access to capital,” David Honig and Jocelyn James of MMTC say in two recent filings at the FCC, the proposals would have a “negative impact on minority broadcasters.”

 Among the proposed new requirements cited by MMTC and ISBA:  mandating permanent advisory boards, requiring a physical presence in broadcast facilities, prohibiting voice-tracking and adopting localism programming guidelines.

 The two groups took particular aim at what is known as the “main studio rule.”   Repealed in the 1980s and now being considered for resurrection, the rule required broadcasters to maintain a “main” studio in their community of license.  The problem, MMTC and ISBA point out, is that quite a few minority-owned stations – being late entrants into the broadcast industry (in part, it is argued, because of past discrimination by the FCC itself) – don’t have a central community of license.   Instead of having a powerful signal licensed from a single, central location, a disproportionate number of minority-owned broadcasters use clusters of small signals, each licensed to a separate, suburban community.  Thus, rather than maintaining a single “main” studio, the rule would require them to maintain multiple – and costly – studios.

 Because of this discriminatory effect, MMTC and ISBA say  — rather bluntly — the rule would operate as a “tax on Blackness and Brown-ness.”

 It should be noted that the ill-effects MMTC and ISBA cite are not limited to minority broadcasters,   The additional costs would be a burden to any smaller broadcaster.  That, however, is hardly a mitigating factor.

 Their analysis should give pause to anyone who supports regulation of media, whether for “localism” or some other nice-sounding purpose.  The real media world is not as simple as the big-corporation-versus-the-rest-of-us-rhetoric too often suggests.  And the cost of regulation may be borne in ways – and by those – it was least intended to harm. 

In case you haven’t read about it in a newspaper yet,  The Heritage Foundation this week released a new paper of mine on the FCC’s new newspaper cross-ownership rule and congressional efforts to “disapprove” the changes.  I argue that the 21st century hasn’t been kind to the newspaper.  As I’ve pointed out before (here and here) newspapers just aren’t the powerhouse they once were: few citizens today get their first or last news of the day from a bundle of paper tossed in the azaleas by a teenager on a bicycle.

Bottom line:  not only are the FCC’s changes justified, but the agency didn’t go nearly far enough. 

Here’s the full piece.

Justine Bateman may have grabbed the headlines, but she wasn’t the only witness from Hollywood at yesterday’s Senate hearing on neutrality regulation.  Nor did she have the most interesting resume.  That honor goes to Patric Verrone, the president of the Writer’s Guild of America, west, whose own writing credits include work for everything from The Simpson’s and Futurama to Rugrats and the Muppets.   As Verrone himself put it, “I am the only panelist to have written a film about a robot poker tournament in space Vegas in the year 3009 so I think my expertise in the area is unquestionable.”

Strangely enough, I first came into contact with Verrone not from his WGA work, or even from 31^st century poker tournaments, but from Ebay, where he sells miniature figures of U.S. presidents and other notable individuals.   My six-year old son Peter and I have become avid collectors of the figurines. 

Verrone is no stranger to market power – being the only known vendor of the pricey presidents.  (Although I suspect the demand side is rather thin as well). 

Outside of the tiny figurine world, Verrone is best known for leading Hollywood writers through a 100-day strike, which finally ended in February of this year.  Oddly, however, Verrone, in his testimony, uses that experience as evidence of the need for Internet regulation.  

According to Verrone, because of concentration in the media world, the writers were not able to get adequate coverage of their strike activities.  “When traditional media is in the hands of the same corporations that employ you”, he said, “it’s hard to get your message out.  We had four thousand attend rallies that got less – and later – coverage on the local news than a dog wedding”.

The writers, he said, had to turn to the Internet to get the word out:  ”The Internet proved to be a powerful tool for communication.  E-mails, blogs, websites, podcasts and video clips were passed along on the net, giving our members updates and informing the world about our cause.”

But wait a second.   I don’t seem to remember any traditional news blackout of the strike.  I’ve never been to a dog wedding, but I can’t imagine any canine nuptials receiving more attention.   A quick search of the term “WGA” on the cnn.com website returns nine video reports on the strike, almost one every 10 days.  If the media monopolists were trying to stifle word that Hollywood writers were on strike, they didn’t do a very good job.

But even if traditional media stifled news that pens had been downed, the lesson of Verrone’s story seems to be that the Internet ensured that information  got out anyway.   Rather than illustrate the power of “Big Media,” the experience underscores how the Web has reduced the power of anyone — no matter how big — to restrict information.

As a final logical jump, Verrone concluded that neutrality regulation is needed to keep the Internet free, so it can continue to serve this role.   No offense to animated features, but that’s a cartoon version of the situation.  The real danger isn’t a dark conspiracy by Verizon or Comcast to keep news off the web.   They have neither the ability nor incentive to do that.  The real danger is that investment in the web will fall behind demand – and that traffic will be mired in endless congestion and delay. 

And that would be a true horror story, whether you are using the web to convey information about a strike or to sell miniature presidents.