Those of you who know the musical “1776” will remember John Adam’s complaint about the Continental Congress–“Piddle, twiddle and resolve, not one damn thing do they solve.” Seems that might apply to the 21st century FCC as well. The FCC is now in the process of considering reconsideration (awkward, but true), of its decision to require “line-sharing,” i.e. requiring telcos to allow competitors to lease certain frequencies of a single wire. This requirement was to be dropped according to last year’s unbundling order, and was upheld by the D.C. circuit earlier this year. Issue settled? No, Chairman Powell is reported now to be pushing to put line-sharing back into effect, or more precisely reverse the decision to eliminate the rule. (Still with me?) One can only assume the guiding maxim at the FCC seems to be “no decision left behind,” and that the goal is maximum uncertainty in telecom markets. More important, the rule isn’t needed, with competition in telecom going full steam. Stay tuned for the musical version of this FCC folly.
A lot of policymakers at both the federal and state level are still running around regulating telecom markets as if nothing has changed in the past decade. Well, when they can find time to put down their cell phones and Blackberrys for a minute, they might want to take a look at what the Atlanta-based Fonix Corporation announced yesterday.
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Here in the U.S. we’re bogged down in determining whether the Communication Assistance for Law Enforcement Act (CALEA) applies to VoIP technology (the FCC unanimously ruled that it does, but a federal court will likely have the final word). In Canada, they’re debating who should pay for wiretapping. The Canadian Association of Chiefs of Police says it should be telephone users.
An article in the Halifax Herald reports that Canadian police want a surcharge of 25 cents on monthly telephone and internet bills. This charge would cover the costs of tapping into communications networks of suspected terrorists and criminals.
At first glance, it doesn’t seem like such a big deal. We already have a federal security surcharge of up to $10 per airline flight (aka the September 11 Security Fee) which serves to fund air travel safety, why not a similar charge on users of communications services to help law enforcement get the bad guys? But there are important differences here. While it may indeed be efficient to place the costs of safety on the user of the service, wiretapping laws do not make telephone users themselves safer – instead, it’s the greater society that purportedly benefits. So this proposal is a tax, not a “user fee.” Economists will tell you that it is inefficient and costly to administer and collect lots of little taxes.
To be sure, taxpayers will pay through general taxes if telephone users do not. But check out this fantastic comment by a Canadian police officer:
“From our perspective, it’s a slippery slope to start paying for the execution of search warrants or any kind of court order.”
Let me get this straight. It’s a burden for your agency to use its own funds for its own activities…to do your job? Should there be a special tax levied on light bulb purchasers for red and blue lights on patrol cars or for consumers of two-way radios so that police forces can upgrade their communications networks?
This is just another example of unfairly burdening a technology. If this proposal gets traction in Canada, it may migrate south to our country (with all the phone taxes already on our bills, who would notice?).
An eclectic group of telecom companies yesterday unveiled a long-awaited plan for revamping intercarrier compensation. Everyone knows the current system for compensating firms for carrying one another’s traffic is a mess. Rates vary wildly based on how each carrier is defined by regulators: long-distance firms, LEC, ISPs all pay different rates, with differences based on long-obsolete technologies and regulatory schemes. Worse, the system masks a sizable subsidy program, largely to the benefit of rural telcos and their customers. And the whole creaky mechanism is being undercut by the emergence of VOIP, which is less firmly in its clutches.
Yesterday’s announcement was the result of a year-long negotiation among a good part of the telecom world–and was backed by SBC, AT&T, MCI, Level3 and others not normally seen on the same press release. And it includes a lot of sensible and overdue reforms: a uniform compensation rate, putting them on a flat (rather than per-minute) basis, and encouraging private negotiation of compensation. For this the plan deserves kudos. But there are problems with this bandwagon as well. Among other things it would shore up universal service subsidies by making cable and VOIP phone consumers pony up contributions for the first time. That seems a lost opportunity: yes, these services present a challenge to the whole subsidy system. But rather than protect the subsidies from that challenge, why not use it to to gain more substantial reform of the whole subsidy system?
This, by the way, may be one reason why many major telecom players stayed away from this proposal–three of the Bell companies sat it out, as did the cable industry. (This in itself is an interesting development. For decades, the battlelines in telecom have been boringly predictable–LD firms on one side, Bells on the other. Now, those lines are mixing.) Stay tuned for a long-running battle at the FCC and the states–and within the telcom industry itself–on this issue.
Although we don’t always agree, I have a lot of respect for Tim Wu of the University of Virginia Law School and he’s doing some interesting guest blogging over on the Lessig Blog this week. He recently made a post about the principles that should guide the next Telecom Act and lists many that I agree with, some that I do not. Anyway, here’s my own short sketch of what the next Telecom Act should include:
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The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.