President Obama recently announced his wish for the FCC to preempt state laws that make building public broadband networks harder. Per the White House, nineteen states “have held back broadband access . . . and economic opportunity” by having onerous restrictions on municipal broadband projects.

Much of the White House announcement misrepresents the situation. Most of these so-called state restrictions on public broadband are reasonable considering the substantial financial risk public networks pose to taxpayers. Minnesota and Colorado, for instance, require approval from local voters before spending money on a public network. Nevada’s “restriction” is essentially that public broadband is only permitted in the neediest, most rural parts of the state. Some states don’t allow utilities to provide broadband because utilities have a nasty habit of raising, say, everyone’s electricity bills because the money-losing utility broadband network fails to live up to revenue expectations. And so on.

The US government has spent billions on broadband, and much of it goes to public broadband networks. The activists’ response to the carriers, who obviously complain about this “competition,” is essentially, “maybe now you’ll upgrade and compete harder.”

Public networks are unwise and costly. Every dollar diverted to some money-losing public network is one less to use on worthy societal needs. There are serious problems with publicly-funded retail broadband networks. A few come to mind:

1. The economic benefits of municipal broadband are dubious. A recent Mercatus economics paper by researcher Brian Deignan showed disappointing results for municipal broadband. The paper uses 23 years of BLS data from 80 cities that have deployed broadband and analyzes municipal broadband’s effect on 1) quantity of businesses; 2) employee wages; and 3) employment. Ultimately, the data suggest municipal broadband has almost zero effect on the private sector.

On the plus side, municipal broadband is associated with a 3 percent increase in the number of business establishments in a city. However, there is a small, negative effect on employee wages. There is no effect on private employment but the existence of a public broadband network is associated with a 6 percent increase in local government employment. The substantial taxpayer risk for such modest economic benefits leads many states to reasonably conclude these projects aren’t worth the trouble.

2. There are serious federalism problems with the FCC preempting state laws. Matthew Berry, FCC Commissioner Pai’s chief of staff, explains the legal risks. Cities are creatures of state law and states have substantial powers to regulate what cities do. In some circumstances, Congress can preempt state laws, but as the Supreme Court has held, for an agency to preempt state laws, Congress must provide a clear statement that the FCC is authorized to preempt. Absent a clear statement from Congress, it’s unlikely the FCC could constitutionally preempt state laws regulating municipal broadband.

3. Broadband networks are hard work. Tearing up streets, attaching to poles, and wiring homes, condos, apartments is expensive and time-consuming. It costs thousands of dollars per home passed and the take-up rates are uncertain. Truck-rolls for routine maintenance and customer service cost hundreds of dollars per pop. Additionally, broadband network design is growing increasingly complex as several services converge to IP networks. Interconnection requires complex commercial agreements. Further, carriers are starting to offer additional services using software-defined networks and network function virtualization. I’m skeptical that city managers can stay cutting-edge years into the future. The costs for failed networks will fall to taxpayers.

4. City governments are just not very good at supplying triple play services, as the Phoenix Center and others have pointed out. People want phone, Internet, and television in one bill (and video-on-demand service). Cities will often find that there is a lack of interest in a broadband connection that doesn’t also provide traditional television as well. Google Fiber (not a public network, obviously) initially intended to offer only broadband service. However, they quickly found out that potential subscribers wanted their broadband and video bundled together into one contract. The Google Fiber team had to scramble to put together TV packages consumers are accustomed to. If the very competent planners at Google Fiber weren’t aware of this consumer habit, the city planners in Moose Lake and Peoria budgeting for municipal broadband may miss it, too. Further, city administrators are not particularly good at negotiating competitive video bundles (municipal cable revealed this) because of their small size and lack of expertise.

5. A municipal network can chase away commercial network expansion and investment. This, of course, is the main complaint of the cable and telco players. If there is a marginal town an ISP is considering serving or upgrading, the presence of a “public competitor” makes the decision easy. Competing against a network with ready access to taxpayer money is senseless.

6. When cities build networks where ISPs already are serving the public, ISPs do not take it laying down, either. ISPs use their considerable size and industry expertise to their advantage, like adding must-have channels to basic cable packages. The economics are particularly difficult for a city entering the market. Broadband networks have high up-front costs but fairly low marginal costs. This makes price reductions by incumbents very attractive in order to limit customer defections to the entrant. Dropping the price or raising the speeds in neighborhoods where the city builds and frustrating city customer acquisition is a common practice. You can look back at the late 1990s when municipal cable was briefly popular. Cities often hemorrhaged tax dollars when faced with hard-ball tactics and their penetration rates never reached the optimistic projections.

There are other complications that turn public broadband into expensive boondoggles. People often say in surveys they would pay more for ultra-fast broadband but when actually offered it, many refuse to pay higher prices for higher speeds, particularly when the TV channels offered in the bundle are paltry compared to the “slower” existing providers. When cities do lose money, and they often do, a utility-run broadband network will often cross-subsidize the failing broadband service. Electric utility customers’ dollars are, say, then diverted to maintaining broadband. Further, private carriers can drag lawsuits out to prevent city networks. And your run-of-the-mill city contractor corruption and embezzlement are also possibilities.

I can imagine circumstances where municipal broadband makes sense. However, the President and the FCC are doing the public a disservice by promoting widespread publicly-funded broadband in violation of state laws. This political priority, combined with the probable Title II order next month, signals an inauspicious start to 2015.

If there is one thing I have learned in almost 23 years of covering communications and media regulation it is this: No matter how well-intentioned, regulation often has unintended consequences that hurt the very consumers the rules are meant to protect. Case in point: “universal service” mandates that require a company to serve an entire area as a condition of offering service at all. The intention is noble: Get service out to everyone in the community, preferably at a very cheap rate. Alas, the result of mandating that result is clear: You get less competition, less investment, less innovation, and less consumer choice. And often you don’t even get everyone served.

Consider this Wall Street Journal article today, “Google Fiber Is Fast, but Is It Fair? The Company Provides Neighborhoods With Faster and Cheaper Service, but Are Some Being Left Behind?” In the story, Alistair Barr notes that:

U.S. policy long favored extending service to all. AT&T touted its “universal service” in advertisements more than a century ago. The concept was codified in a 1934 law requiring nationwide “wire and radio services” to reach everyone at “reasonable charges.” In exchange for wiring a community, telecommunications providers often gained a monopoly. Cities made similar deals with cable-TV providers beginning in the 1960s.

The problem, of course, is that while this model allowed for the slow spread of service to most communities, it came at a very steep cost: Monopoly and plain vanilla service. I documented this in a 1994 essay entitled, “Unnatural Monopoly: Critical Moments in the Development of the Bell System Monopoly.” As well-intentioned regulatory mandates started piling up, competition slowly disappeared. And a devil’s deal was eventually cut between regulators and AT&T to adopt the company’s advertising motto — “One Policy, One System, Universal Service” — as the de facto law of the land.

It took us almost a century to dig ourselves out of that mess and move towards telecommunications competition. Alas, we’re still living with the vestiges of this old regulatory mentality. Cities and counties across America still impose a wide variety of “universal service” regulatory mandates. Again, their intention is noble: They want everyone in their community served. You can’t blame them for that. But the result is still the same: Limited facilities-based competition and investment.

And so we return to today’s Wall Street Journal story about Google Fiber, which explains how local officials are finally starting to understand these realities. The story notes:

In 2011, Google struck a deal with authorities in both Kansas City, Kan., and Kansas City, Mo., to build the service based on customer demand. City officials say they didn’t push hard for universal coverage because they thought faster Internet service would boost the local economy and they were competing against so many other cities. “The main point was to win and bring that infrastructure to our city,” said Rick Usher, assistant city manager of Kansas City, Mo. As phone and cable companies slowed their own expansion plans, more cities allowed the selective approach.

Google’s ‘build-to-demand’ model is catching on because it produces results: More infrastructure investment, innovation, and competition. Traditional telecom and broadband operators are prepared to step up investment, too, when the incentives are right:

Verizon was required by cities and some state laws to build and offer its FiOS service widely across cities. It stopped expanding to new cities in 2010; to date, it has spent more than $23 billion on the FiOS rollout. Chief Financial Officer Fran Shammo said in March that the company wouldn’t expand to additional markets until FiOS had “finally returned its cost of capital.” If Verizon resumes expansion, the company would consider Google’s build-to-demand model because it has the potential to be more profitable, said Chris Levendos, a Verizon executive overseeing the FiOS build-out in Manhattan. Others are doing just that. AT&T said in April it would offer Internet speeds of up to one gigabit in as many as 100 cities. It is building to demand and working with local authorities to reduce construction costs, the company said. Tuesday, it said it would bring the high-speed service to Cupertino, Calif., close to Google’s headquarters. This approach “starts to make this business model look quite attractive,” John Stankey, AT&T’s chief strategy officer, said at an investor conference on Aug. 13.

Again, when you get the incentives right and give investors and innovators a green light, they will seize the opportunity. And that’s even true — actually, it is especially true — for high fixed-cost investments like fiber networks.

But wait, aren’t there some pockets of the population that will fall through the cracks under this alternative arrangement? In the short-term, potentially yes. But the right answer to that “digital divide” problem is never to restrict short-term investment and innovation opportunities just because you think you have a better, more “well intentioned” plan. That is the crucial mistake policymakers made in the past. Their desire to get everyone served at the exact same time with the exact same plain vanilla service meant we got sub-optimal technologies and stagnant markets with little hope of any new innovation or investment over the long-haul.

This is how “universal service” consistently fails us. Universal service sells us short. It sells human ingenuity short. The logic that motivates universal service regulation is that: ‘Well, this is about the best we can do. Let’s just get everyone some basic level of service and that will be just and good.’  Can you imagine if we would have applied this logic to other major markets and technologies?!

But what about the under-served communities? First, when you allow new innovation in networks, you never know how or where they might spread next. If you have more competitors offering unique networks architectures and services, there is a very good chance that entrepreneurial minds will figure out how to push out the boundaries of what is possible, especially in terms of how the service is delivered.

Consider this: Back in the old days, did it really make sense to try to stretch a thin copper wire way, way out into the middle of every valley, desert, farm field, and mountain? The myopic universal service mindset says: ‘Well, that’s all we had at the time.’ Perhaps for a time it really was. But how much quicker might we have seen some sort of alternative system if we hadn’t locked in those old assumptions as policy requirements? Is it impossible to believe that wireless technologies might have developed much more quickly if the incentives would have been right? Again, there was no reason for any innovators or investors to even consider the idea at a time when policymakers were mandating copper wires be stretched to every corner of the land, and as they were showering favored companies with subsidies to achieve that goal. That’s not something a new innovator could compete with, and so no one did. It would have been like policymakers saying we needed a “universal service” policy for cheap hamburgers for the masses and then showering McDonald’s with subsidies since they were the first one in many local markets who could deliver on that promise. Had we had such a universal cheap hamburger policy, do you think any other fast food places would have ever come to town and tried to compete against those subsidized burgers? Not likely.

The lesson for today’s policymakers is clear: Open up markets, relax regulatory burdens, eliminate discriminatory taxes and subsidies, and clear away other barriers to investment. Then see what happens. As the Google Fiber experience suggests, innovative minds can and will emerge to offer constructive solutions and slowly spread new networks and technologies.

OK, but won’t there still be some communities that are underserved, even with all that new innovation and investment. It’s certainly possible. And where those communities exist, some government action may be necessary to incentivize the spread of some sort of network to them, or even have the government build it for the community. I’m not opposed to that. (Have you ever driven through the hills of West Virginia or the mountains of rural Western states? Hard places to get wired networks out to!) I’m not very optimistic local governments will do a very good job of building sophisticated networks because they already have a horrible track record in this regard. But, again, I don’t oppose local action on this front if no other alternatives appear after a certain period of time.

But, again, the answer here is not crazy national and state-based universal service mandates that regulate everyone in every community as if they had the same problem. Let competition and innovation work its magic where it can and do not mess that up. Where it proves much harder for that network competition and innovation to take root, use smart incentives to get companies to build out their networks further, or offer alternative wireless infrastructure of some sort, or just have the government build the networks themselves. But we should always give competition and innovation the benefit of the doubt and see what happens first.

So, let me perfectly clear what I am saying here: GOOD INTENTIONS ARE NEVER ENOUGH! [And yes, I am using all caps because I am shouting!] The next time somebody starts mouthing something about how they have the moral high ground in these debates because their intentions are supposedly pure as the driven snow, ask them to show you results. Tell them you want evidence that their intentions have actually produced something concrete and positive for society. If their answer is, in essence, ‘Well, with our regulatory mandates we can at least get everybody some basic level of really crappy monopoly service,’ then tell them that they can take their good intentions and shove them. We can do better.

There is bipartisan agreement that the 1996 Telecom Act was antiquated only shortly after President Clinton’s signature had dried on the legislation. There is also consensus that spectrum policy, still largely grounded in the 1934 communications statute, absolutely distorts today’s wireless markets. And there is frequent criticism from thought leaders, right and left, that the FCC has been, for decades, too accommodating to the firms it regulates and too beholden to the status quo (economist Thomas Hazlett quips the agency’s initials stand for “Forever Captured by Corporations”).

For these reasons, members of Congress every few years announce their intention to reform the 1934 and 1996 communications laws and modernize the FCC. Yesterday, some powerful House members unexpectedly reignited hopes that Congress would overhaul our telecom, broadband, and video laws. In a Google Hangout (!), Reps. Fred Upton and Greg Walden said they wanted to take on the ambitious task of passing a new law in 2015.

Much depends on next year’s elections and the composition of Congress, but hopefully the announcement spurs a major re-write that eliminates regulatory distortions in communications, much as airlines and transportation were deregulated in the 1970s–an effort led by reformist Democrats.

About ten years ago, more than fifty scholars and technologists crafted reports which constituted the Digital Age Communications Act (or DACA) that is largely deregulatory (a majority of the group had served in Democratic administrations, interestingly enough). In 2005, then-Sen. Jim DeMint proposed a bill similar to the working group’s proposals. The working group’s recommendations aged very well in eight years–which you can’t say about the 1996 Act–and represents a great starting point for future legislation.

As Adam has said the DACA reports have five primary reform objectives:

– Replacing the amorphous “public interest” standard with a consumer welfare standard, which is more well-established in field of antitrust law – Eliminate regulatory silos and level the playing field through deregulation – Comprehensively reform spectrum not just through more auctioning but through clear property rights – Reform universal service by either voucherizing it or devolving it to the States and let them run their own telecom welfare programs; and – Significantly reforming & downsizing the scope of the FCC’s power of the modern information economy

DACA redefines the FCC as a specialized competition agency for the communications sector. The FCC largely sees itself as a competition agency today but the current statutes don’t represent that gradual change in purpose. The FCC is slow, arbitrary, Balkanizes industries artificially, and attempts to regulate in areas it isn’t equipped to regulate–the agency has a notoriously bad record in federal courts. These characteristics create a poor environment for substantial investments in technology and communications infrastructure. The DACA proposals aren’t perfect but it is a resilient framework that minimizes the effect of special interests in communications and encourages investments that improve consumers’ lives.

Jerry Ellig, senior research fellow at the Mercatus Center at George Mason University, discusses the the FCC’s lifeline assistance benefit funded through the Universal Service Fund (USF). The program, created in 1997, subsidizes phone services for low-income households. The USF is not funded through the federal budget, rather via a fee from monthly phone bills — reaching an all-time high of 17% of telecomm companies’ revenues last year. Ellig discusses the similarities between the USF fee and a tax, how the fee fluctuates, how subsidies to the telecomm industry have boomed in recent years, and how to curb the waste, fraud and abuse that comes as a result of the lifeline assistance benefit.

Download

Related Links

• Jerry Ellig’s Biography Mercatus Center
• Benefits, Costs and other Important Stuff-Demystifying Regulatory Analysis Ellig, Mercatus Center
• The Future of Regulation Ellig, Pepperdine University School of Public Policy

The Mercatus Center at George Mason University has just released a new paper by Brent Skorup and me entitled, “A History of Cronyism and Capture in the Information Technology Sector.” In this 73-page working paper, which we hope to place in a law review or political science journal shortly, we document the evolution of government-granted privileges, or “cronyism,” in the information and communications technology marketplace and in the media-producing sectors. Specifically, we offer detailed histories of rent-seeking and regulatory capture in: the early history of the telephony and spectrum licensing in the United States; local cable TV franchising; the universal service system; the digital TV transition in the 1990s; and modern video marketplace regulation (i.e., must-carry and retransmission consent rules, among others.

Our paper also shows how cronyism is slowly creeping into new high-technology sectors.We document how Internet companies and other high-tech giants are among the fastest-growing lobbying shops in Washington these days. According to the Center for Responsive Politics, lobbying spending by information technology sectors has almost doubled since the turn of the century, from roughly $200 million in 2000 to $390 million in 2012.  The computing and Internet sector has been responsible for most of that growth in recent years. Worse yet, we document how many of these high-tech firms are increasingly seeking and receiving government favors, mostly in the form of targeted tax breaks or incentives.

We argue that the creeping cronyism could have two major negative ramifications. First, it could dull entrepreneurialism and competition in this highly innovative sector since time and resources spent on influencing politicians and capturing regulators cannot be spent competing and innovating in the marketplace. Cronyism will also negatively impact consumer welfare by denying consumers more and better products and services. Additionally, consumers might end up paying higher prices or higher taxes due to government privileges for industry.

Second, cronyism also raises the specter of greater government control of the Internet and of the digital economy. When policymakers dispense favors, they usually expect something in return. They also become accustomed to having greater informal powers over the sector receiving favors, and contribute to DC’s infamous “revolving door” problem.

High-tech America’s recent embrace of Washington could take it down the familiar path followed by the agriculture, telecommunications, and automotive sectors (among many others), with government becoming both protector and punisher of industry. Today’s dynamic tech industries will increasingly come under the “Mother, may I?” permission-based regulatory regime that encumbered the older information technology sectors.

Finally, this paper offers strategies for stalling and diminishing the cronyism already taking root in the high-tech sector. We suggest several targeted reforms to limit or undo cronyism. Generally speaking, however, we note that, as economist David R. Henderson argued in an earlier Mercatus Center report, “There is only one way to end, or at least to reduce, the amount of cronyism, and that is to reduce government power.”

The paper can be downloaded from the Mercatus website, SSRN, or Scribd. The Scribd version is embedded down below. (Also, here’s some coverage of the paper over at the Washington Post’s “Wonkblog” from our old colleague Tim Lee. Here’s more coverage from Bloomberg Businessweek and the San Francisco Chronicle. And here’s a U.S. News oped that Brent and I wrote condensing our paper into just 600 words. Finally, a short 3-minute video of me discussing the problem of tech cronyism is also embedded below.)

A History of Cronyism and Capture in the Information Technology Sector [Thierer and Skorup – July 2013] by Adam Thierer

A few days ago, the big news in the telecom world was that President Obama again ordered federal agencies to share and sell their spectrum to expand commercial mobile broadband use. This effort is premised on the fact that agencies use their gifted airwaves poorly while demand for mobile broadband is surging. While the presidential memorandum half-heartedly supports clearing out agencies from some bands and selling it off, the focus of the memo is shared access, whereby federal agencies agree to allow non-federal users to use the same spectrum bands with non-interfering technologies.

The good news is that there is no mention of PCAST’s 2012 recommendation to the president to create a 1000 MHz “superhighway” of unlicensed federal spectrum accessed by sensing devices. This radical proposal would replace the conventional clearing-and-auction process with a spectrum commons framework reliant on unproven sensing technologies. Instead of consumers relying on carriers’ spectrum for mobile broadband, this plan would crudely imitate (in theory) wifi on steroids, where devices would search out access over a huge portion of valuable spectrum, avoiding federal users. Its omission in the recent memo likely means the unlicensed superhighway won’t be pursued.

Still, this doubling-down on other forms of dynamic spectrum sharing is unfortunate for several reasons. First, it mostly entrenches the disastrous status quo by acceding to federal agencies’ claims that they can’t be safely moved. Giving federal agencies free spectrum decades ago was a costly mistake that needs to be corrected through pricing and through clearing. By throwing their hands up and saying that clearing and auctioning federal spectrum is too difficult and sharing is the best alternative, the administration forces us to suffer for the mistakes of the past.

Second, sharing, as envisioned in the memo, will not be accomplished quickly or extensively. Whatever technologies come out of this–there are several options, which only adds research delays–will be constrained by what interference risks the agencies accept. Engineering tests and simulations cannot answer this question; it is an economic and political question, and the economics is very distorted as it is. Federal agencies and particularly the military are very jealous of their spectrum. And who can blame them, since their wireless systems are often used for communications and training exercises that, if not directly protecting the lives of civilians, employees, and soldiers, are an important component of preparation for combat. But this jealousy means agencies are not good at sharing wireless bandwidth.

For “sharing skeptics,” UWB’s experiences illuminates our concerns. Ultrawideband (UWB) is a wireless low-power technology used for radar and data services and, beginning in 1989, its proponents sought regulatory approval to share federal spectrum for UWB commercial applications. UWB uses huge portions of spectrum but is very low power–transmissions from a cellphone are millions of times more powerful than UWB transmissions. Even then, UWB applicants were subjected to a process that can only be described as Kafka-esque as it went–for 13 years–agency to agency, submitting filings and completing interference tests, attempting to show that the technology would not threaten federal operations, before it finally got approval. Indicative of agency foot-dragging, a UWB manufacturer noted,

It took NTIA nearly a year to obtain internal sign off by government users of spectrum to approve with conditions the requests for waivers submitted by [UWB] companies. This despite the fact that the devices . . . were lifesaving instruments for public safety and law enforcement personnel, and all 2500 devices requested, if operating together in a single room, would emit less than one quarter the power of a cell phone.

That same UWB applicant made over 100 trips to DC in 6 years and spent millions of dollars to push his technology. Another large UWB company backed by Intel went out of business in the meantime. To be clear, the technologies contemplated in the memo are different from UWB, but UWB is not alone and the institutional resistance will be the same for future sharing technologies. There will be extensive tests, frequent denials, delays, and billions of dollars of continued waste of underused federal spectrum.

I have no doubt the heads of NTIA and DoD favor making mobile broadband more available to consumers. But it is also their duty to ensure that military and federal systems work well all the time. Given these two priorities (faster mobile downloads of cat videos versus public safety and military training), guess which one the NTIA and agencies will favor? What probability of service disruption will federal agencies tolerate? The answer–as we’ve seen in previous sharing attempts–is vanishingly small. That means if any technologies are approved for sharing on federal bands–a process that will take years–they will be likely constrained by very conservative technical criteria and low-power operations.

The memo’s best recommendation is exploring “incentives” (that is, pricing) for federal agencies to relinquish spectrum. Blair Levin–who worked on the FCC’s 2010 National Broadband Plan–voiced support for creating a “GSA for spectrum” at a Washington Post forum this week, and hopefully this sentiment will become a priority. Until agencies are paying market prices for this valuable resource, attempts to force agencies to share are bound to run into these problems since there is no way to analyze the economic tradeoffs.

But a GSA for spectrum is a long ways off and I suspect the regulatory risks and delays in the interim, combined with the poor economics of the permitted technologies, will scare away most investment. Whatever does emerge will be a poor substitute for the robust wireless networks we see everyday on our smartphones using exclusively licensed commercial spectrum, which is why the memo’s focus on sharing–not clearing and auctioning–is sorry news.

For more on proposals for reclaiming federal spectrum through clearing and auctioning, please see my hot-off-the-presses Mercatus working paper.

[Updated 7/10/14: See new addendum at bottom. Updated 4/28/13: Included links to several things + started list of additional resources at end.]

Each year I am contacted by dozens of people who are looking to break into the field of information technology policy as a think tank analyst, a research fellow at an academic institution, or even as an activist. Some of the people who contact me I already know; most of them I don’t. Some are free-marketeers, but a surprising number of them are independent analysts or even activist-minded Lefties. Some of them are students; others are current professionals looking to change fields (usually because they are stuck in boring job that doesn’t let them channel their intellectual energies in a positive way). Some are lawyers; others are economists, and a growing number are computer science or engineering grads. In sum, it’s a crazy assortment of inquiries I get from people, unified only by their shared desire to move into this exciting field of public policy.

I always do my best to answer their emails, calls, and requests for meetings. Unfortunately, there’s only so much time in the day and I am sometimes not able to get back to all of them. I always feel bad about that, so, this essay is an effort to gather my thoughts and advice and put it all one place so that I will at least have something to send these folks. Perhaps I’ll try to update it over time.

#1) Understand that Specialization Matters

I don’t want to bury the lede here, so let me start with the most important piece of advice I share with everyone who contacts me: specialization matters. When I got started in the sleepy field of information technology policy back in 1991, it was possible to be a jack-of-all-trades. There were only a few issues that really mattered, and most of them were tied up with traditional communications and media policy. If you knew a little something about telephony, universal service subsidies, spectrum policy, and broadcast regulation, then you could be an analyst in this field. There were only a handful of people in the think tank world back then who even cared about such issues.

But then came the Internet. It really did change everything, including this field of policy study. In the old days, people in this field were called telecom policy analysts or media policy analysts. We had titles like “Director of Telecommunications Studies” or “Fellow in Media Studies.” But when the Net came along, it almost instantly made such titles seem archaic. Today, this field is more appropriately labelled “information technology policy studies.” That term incorporates those old telecom and media policy issues, but it includes much more now.

That’s why specialization matters more than ever. In essence, over the past 15 years, the information technology policy world underwent a metamorphosis similar to the one that occurred in the field of environmental policy a decade or two before. In the early days of environmental policy, it was enough to say you were interested in environmental policy at all. That could probably win you a job (or at least an activist role) somewhere in that field. By the mid-1980s, however, the field of environmental policy had become remarkably specialized. Academic programs and public policy jobs started developing around very targeted issues: water, air, waste management, nuclear issues, endangered species, farming / sustainable development, climate change, etc, etc. Today, therefore, if you are looking for a career in the environmental policy arena, you are generally expected to first develop a more finely-honed specialization in one of its many sub-issue areas.

This is exactly what has been happening in the field of information technology policy since the mid-1990s. If you want a career in the field of information technology policy studies today, you need to be thinking about a very specific area of expertise. Do you already have that expertise? Great, then skip to step #5 below. If not, read on.

#2) The Major Areas of Specialization in the Modern Information Technology Policy Arena

OK, so you understand that specialization matters. What specific topic / field should you choose as your particular area of focus? Well, that’s up to you and your particular interests. Here’s the good news: There are more options than ever.

It’s useful to divide the information technology policy world into 3 big buckets (Note: This is a taxonomy that Jerry Brito, Eli Dourado, and I use to think about our priorities of the Mercatus Center’s Technology Policy Program each year):

• Conduit / Infrastructure
• Content / Speech
• Other

Let’s break down each one of these to reveal just how specialized this field has become:

(A) Conduit: Generally refers to anything involving the physical infrastructure side of information technology policy, including:

• Broadband policy (including traditional communications / common carrier regs)
• Spectrum / Wireless
• Universal service (and other tech subsidies)
• Media marketplace regs (broadcasting, cable)
• Antitrust & mergers

(B) Content: Generally refers to any (mostly intangible) information control or speech control issue

• Public Morals / Free Speech (porn, gambling, spam, cyberbullying, political speech, etc)
• Privacy (including reputation & defamation concerns)
• Cybersecurity (online security, national security concerns, state secrets, encryption controls)
• IP (copyright & patents)

Here’s the key takeaway from this taxonomy: You can develop a specialized career around countless information policy issues today. Do you want to be a privacy guru? Great, there are countless policy opportunities in that area alone. Do you love freedom of speech? Excellent, you can find plenty of cool gigs there, too. Cybersecurity strike your fancy? No problem. That field is growing like wildfire. And there are entire academic programs and activist institutions that long ago developed around digital copyright.

If you prefer to stick with the “conduit” bucket, have no fear, there exists many opportunities in those sub-areas. I know many professionals who describe themselves as a “cable lawyer” or a “media economist” or an “antitrust consultant.” Those fields are heavily saturated today, however, especially because they tended to pay quite well in the past. That could change as the “content” issues become more visible and important in coming years. Privacy policy is probably the biggest growth market in this regard. Huge opportunities await you there if you are so inclined.

I could go on, but you get the idea: You need to think about specialization because just randomly contacting someone and telling them you want to be an Internet policy analyst today is not enough. You need to be able to tell them, “I am interested in information technology policy and I possess a particular interest/expertise in X.” What “X” is is up to you, but you better have something to fill in that blank.

#3) What Specific Academic Experience Will Help?

Many people who contact me about how to advance their careers in the information technology policy arena are already far along in advanced degree programs or even finished those degrees long ago. But, for what it’s worth, here’s some general advice about which degrees will help you out the most in this arena. They are listed in order of importance:

• Law: A law degree from a program with a specialized cyberlaw program will probably help you out most in this arena. It will open more doors for you than the other degrees mentioned below. I suppose that is true for most public policy fields and jobs, of course. Legal experience is also easier to “re-purpose” than other degrees; it offers excellent training for many different professions. The downside: The field of information technology policy is increasingly being flooded with lawyers. While a law degree still offers important advantages over other degrees, that may change if the legal market grows over-saturated. The way to counter that, of course, is to hyper-specialize! Start thinking about how to develop a very targeted legal expertise in privacy law, free speech policy, copyright law, cybersecurity, media/spectrum policy, antitrust law, etc.
• Economics: An economics degree offers you the opportunity to analyze public policy using a very different toolbox than the lawyer will use. Economists are in increasing demand in the field of information technology policy because (a) there are just too many damn lawyers in the field already and (b) economists can actually offer some hard data to support their claims or make their case. PhD economists with a focused expertise in a particular tech area can also command a very impressive premium for their skills. (Note: MBAs are less in demand than economists and are generally a rare bird in the information technology policy arena. I am one of them, and I regret to say that it really hasn’t done much to help my career.)
• Computer Science / Engineering: Increasingly, employers in this arena are interested in finding skilled CS grads and engineering experts (ex: spectrum engineers) who can tackle special jobs and projects. If you have such expertise, you will be able to cover certain technical policy issues in a far more authoritative fashion. That’s increasingly valuable to institutions as they look to broaden their stable of talent. For example, many policy institutions and even government agencies now hire a “Chief Technologist” to offer the rest of the staff their specialized advice on highly technical matters. In the future, I expect policy institutions will employ several technologists to fit the specialized needs they have.
• Poly Sci / Public Policy / History: Degrees in political science, public policy, and even history probably won’t help you out as much as degrees from one of the three previous areas, but it depends on what you are looking to do. Again, the information technology policy arena is specialized enough today that certain jobs will require this skill set. For example, I have personally done a lot of work on cronyism and regulatory capture in this arena and my undergrad degree in poly sci has actually come in quite handy as I try to explain the political economy of high-tech rent-seeking. Similarly, many advanced degrees in public policy today offer very specialized areas of focus that could help. For example, the School of Public Policy here at George Mason University offers a couple of excellent M.A. and PhD. programs related to information technology policy. I’ve found many other Public Policy M.A. and PhD. programs that offer similar degree opportunities.

Needless to say, if you can combine two of these degrees, you’ll be golden. I’m finding a lot more analysts in this field have economics undergrad degrees and then a law degree to boot. Even better, however, would be combining a technical degree in CS or engineering with one of these other degrees. Then you are talking about truly valuable academic experience. And it had damn well better be valuable because you are going to be dead broke after you get done with all that education!

One other point: I don’t want to suggest that you can’t break into the info-tech policy world with other degrees under your belt. There’s a growing group of philosophers and sociologists, for example, who are doing important Internet policy work. Likewise, there have always been major media studies and journalism programs that offered a path toward being a tech policy wonk. (My other undergrad degree was in journalism). For now, however, that policy work is being doing almost exclusively within universities. If you are looking to come to Washington (or a state or international capital) and do public policy work, you would probably be better served having one of the degrees listed above.

#4) What Other Experience Will Help?

Regardless of what academic degree you are pursing or already possess, additional “real-world” experience will help you advance you career in the the information technology policy arena, much like every other policy field. Here’s what I think will be most useful to you:

• Hill / govt work: If you can stomach spending a semester or even an entire year working on Capitol Hill or in a regulatory agency, it will do wonders to advance your career in the information technology policy world. It’s not just about the experience you gain from working inside the system; people care about the connections you make, too. When you work for the right sort of Hill office or committee (like Energy & Commerce), or for the right sort of agency (FCC, FTC, NTIA), you gain important connections in those institutions that can benefit you (or your future employer) for many years to come.
• Legal associate / clerkship: For you lawyers out there, experience in a firm, or clerking for a judge, puts a big star on any resume and is increasingly important in this field. Again, if you can land a gig in the right firm or with the right judge (one that has a very specialized expertise), that’s even better.
• Corporate internship / fellowship: Working for a major corporation or trade association offers very specialized experience that can help advance your career, but it comes with one potential downside: It could label you as being too close to that interest. For example, tech firms like Google and Microsoft offer some wonderful internships and research fellowships, but once you accept such positions it could be held against you by others who, for whatever reason, might have issues with those firms.
• University programs/ projects: If you are still at university finishing up a higher degree, are their programs internally that can help advance your career in the information technology policy field? There are obvious things like serving on the law review, but how about more specialized programs that might allow you to work with other tech policy scholars on special reports and projects? Can you help a scholar in that program with research for a big paper? Can you help them build a website to highlight an important new project? Can you join together with other students in your program to develop new sites or tools that highlight a particular public policy issue that you care deeply about?  Stuff like this can help boost your visibility in an increasingly crowded field.
• Think tank internship / fellowship: There are a lot of great opportunities available to you in the think tank world, so long as you don’t mind slave wages! Think tanks of all stripes offer aspiring tech policy analysts a wonderful opportunity to get their feet wet and experience the tech policy world first-hand.  Some think tanks will even let interns or junior analysts write for their blogs or at least work on major projects as a research assistant. Again, the pay absolutely blows and you will struggle to make ends meet, but the experience will be quite valuable. If you are already older and looking to shift from you current dead-end profession into the world of Internet policy, think tanks can offer you an excellent platform — perhaps the very best platform of all. Again, the downside is the pay. You won’t be able to command a premium for your talent in the think tank world. They just don’t have the budget to pay you handsomely and there will probably also be plenty of other competition for your position. But you’ll have the opportunity to write and speak and preach like no other job can provide.

Again, if you can combine a few of these things, it’ll be a hell of a resume-builder.

#5) Write (and then write some more!)

Whether you are a student looking to break into this field or an established professional looking to shift jobs, there is one piece of advice I have for all of you: If you really want to get involved in the information technology policy world, you need to start writing about the information technology policy world.

I suppose this general word of advice could apply to all public policy fields and professions, but the reason it is particularly important in this field is because, quite obviously, we are in the information business! We are using the same technologies we are writing about. And people in our arena generally use these technologies far more aggressively than people in other professions. So, it is generally expected that you should be using them, too.

There are two specific reasons why writing is vitally important. First, it shows others you have a deep interest (and potential expertise) in information technology policy. Second, it serves as a writing sample when others want to gauge your capabilities and grasp of the issues.

Here are a few ways you can start writing more and building your brand:

• Start a blog or start blogging with others: If you’re already doing so, that’s great. But kick it up a notch. Just find anything that interests you — an academic paper, a news report, another blog post — and write about it. Even if you just summarize that other piece and add a line or two of commentary, that’s something. It’ll help get your name out there and help you develop your own brand. Better yet, when you write about others and their work or advocacy, they see it. Most academics and policy wonks have a big enough ego that they probably have a Google Alert set up for their own name. I certainly do because I want to know what others are saying about me and my work. So, if I see you writing about me, I’m going to be far more likely to add your blog to my RSS feed or even follow you on Twitter.
• Try to publish something “professionally”: If you can, find a way to get some of your work published in a academic journal, a professional publication, or a leading media outlet in the field. I realize that this isn’t easy. Sometimes it will be impossible, especially at a young age when you are first breaking into the field. But the good news is that there are more outlets than ever and, if you work hard enough, you’ll eventually find one of them that will republish your work. Having a few independent publications under your belt and on your resume can really help jumpstart your career in the policy world. It goes without saying that getting published matters even more if you’re hoping to secure a position with a university-based research center. If your work is more academic in character, get it on SSRN immediately.
• Use Twitter and other social media services (but be careful): Twitter can do wonders to help you build a following in the information technology policy arena by (1) letting you share your insights about tech policy with the world and, more importantly, (2) getting you connected with well-established figures in the field. Not every tech guru will follow you back once you start following them, but many will. And, with enough work (and a little brown-nosing), you will eventually get on their radar screen. For example, if you enjoy papers and essays by a particular cyberlaw guru or digital policy economist, retweet their work and add a thoughtful comment. Keep doing that for them and others. And do the same for journalists who post interesting tech policy stories. Put all these people on a curated Twitter list of your own and label it something flattering like “Tech Policy Gurus” or “Best Net Policy Wonks.” I can say from personal experience that when I find myself on such lists, I am more likely to follow the people who created them. One word of caution about Twitter and social media, however: Being provocative can get you noticed, but it can also piss people off and cost you followers / respect. Worse yet, it could come back to haunt you when you pursue future job opportunities. If you are at the stage in your career where you are fairly well-established and don’t necessary care as much about what the rest of the world thinks about you (hey, that’s me!), then it’s easier to get away with being provocative and even a bit snarky online. But when you are young and just getting started, be careful not to burn bridges before you’ve even built any. Be friendly, at least at first. There will be plenty of time in the future for you to tell me that you think I am full of sh*t!

#6) Network

Sure, you can get plenty of networking done using online tools and strategies, some of which I discussed above. But meeting people in person still matters. A little face time and a few handshakes can open up opportunities that you would otherwise not even known existed. Toward that end, if you are near a major university center or city that hosts occasional tech policy events, get to them. Or, if you can, plan occasional visits to major university events or other tech policy galas. When you visit these places, see if you can schedule a few minutes of private face time with leading analysts that you respect. Tell them how much you value their time but ask for just a few minutes with them to get some advice on how to be the next great tech policy analyst, just like them! (Again, flattery gets you everywhere in this world).

Finally, if you are lucky enough to live near Washington, DC, then you’ll have no problem finding an endless array of technology policy events to attend on a near-daily basis.  Get to as many as you can and introduce yourself to as many people as possible. Tell them all you are interested in pursuing a career in the information technology field and stress the particular area of policy that most interests you. I have probably found more jobs for people during cocktail hours than anything else. One person will come up to me and explain their interests and background and then I will point them to the 2 or 3 other people in the room who can help them advance their particular career objective.

#7) Read

Geez… do I really need to say this? Well, I do only because I wanted to offer a list of a few things I read regularly to keep my finger on the pulse of the info-tech policy world. Perhaps the easiest way to do so is to just list some of what’s in my daily RSS and/or Twitter feed. Here’s a sample:

• Tech News: Ars Technica, National Journal’s Tech Daily Dose, The Hill’s Hillicon Valley, WSJ tech reporters and “Digits” blog, NYT’s technology feed, GigaOm, CNet politics & law
• Tech Policy Blogs: The Technology Liberation Front (of course!), EFF Deeplinks, TechDirt, Freedom to Tinker, Eric Goldman’s Technology & Marketing Law Blog, Digitopoly, Public Knowledge blog, CDT blog, Monday Note, Rough Type, Regulation 2.0, various Forbes contributors (esp. Kashmir Hill), and sharp philosophers of technology (like Evan Selinger & Michael Sacasas)
• Cyberlaw or other university-based tech policy centers: Berkman Center at Harvard, CIS at Stanford, Oxford Internet Institute, CLIP at Fordham, CLI at Maine, Yale ISP, HTLI at Santa Clara, Boalt Center at Berkeley, Columbia Institute for Tele-Information, IEP at George Mason, Center for Information Technology Policy at Princeton, (also here’s the list of all of them that I follow on Twitter)
• Corporate / Law Firm Blogs: Google, Verizon, AT&T, and many other companies and trade associations have blogs worth following. Also, law firms are finally starting to open to door a bit to blogging, although they are still hyper-cautious about it. I follow a couple of law firm blogs that have top privacy and antitrust attorneys blogging for them. I can’t even begin to name them all here.

This just scratches the surface.  Again, the more specialized your focus, the more likely it is you’ll follow very targeted blogs and media outlets. For example, there are dozens of targeted blogs on copyright and privacy policy. I follow many of them casually on Twitter but don’t keep them in my daily RSS feed.

More generally, you should be keeping up with major Internet policy books so that you are conversant in intellectual circles about the hottest publications du jour. That can be challenging — both because reading books takes time and the field is increasingly crowded with new titles. At the end of each year, I try to put together a list of important info-tech policy books. (Here are the lists for 2008, 2009, 2010, 2011 and 2012). You should try to be familiar with some of the big titles on those lists. Also, here’s my compendium of all the major titles from the 2000s and here’s the running list of all my tech policy book reviews.

Conclusion

Well, that’s all I got for ya. I promise to try to offer my thoughts to you in person or via email if you call or write, but please understand that I’m just sometimes too busy to respond to everyone at length. But I hope what I’ve written here helps some of you out in your effort to break into the tech policy world.  Best of luck, and if you make it big, buy me a beer someday!

Additional Reading / Resources:

• Internet Society – “Brief History of the Internet” (by various authors who helped give birth to it)
• Internet Society’s “History of the Internet” page
• list of cyberlaw professionals & groups on LinkedIn
• William H. Dutton, “Internet Studies: The Foundations of a Transformative Field,” in Oxford Handbook of Internet Studies (W. H. Dutton, eds., Oxford University Press, 2013)
• Adam Thierer, “The Digital Decade’s Definitive Reading List: Internet & Info-Tech Policy Books of the 2000s,” Technology Liberation Front, Dec. 29, 2009.
• Robert D. Atkinson, “Who’s Who in Internet Politics: A Taxonomy of Information Technology Policy“
• James Grimmelmann, Internet Law: Cases and Problems

*** Addendum, July 2014 ***

If I was penning this essay today, I think I would have instead entitled it, “So You Want to Be a Technology Policy Analyst?” Since I penned this back in Dec 2012, a lot has changed in the world of Internet policy, starting with the fact that, as Marc Andreessen has noted, “software is eating the world.” As Jerry Brito, Eli Dourado, and I noted in our May 2014 essay, “Technology Policy: A Look Ahead”:

many of the underlying drivers of the digital revolution—massive increases in processing power, exploding storage capacity, steady miniaturization of computing, ubiquitous communications and networking capabilities, the digitization of all data, and increasing decentralization and disintermediation—are beginning to have a profound impact beyond the confines of cyberspace.

As a result of this convergence of the old “meatspace” economy (the world of atoms) and the digital economy (the world of bits), what it means to be an “Internet policy analyst” is changing and expanding once again. A wide variety of new innovations are now emerging and raising fresh policy concerns. For example, a short list of the technologies and sectors I am now covering includes: the “Internet of Things” and “wearable technologies;” smart car technology and autonomous vehicles; commercial drones; robotics; mobile medicine; biohacking and genetic engineering; and much more.

Just a few years ago, none of these issues were on my list of policy priorities. Today, they constitute 90% of what I write and speak about on a daily basis.

What this means for aspiring technology policy analysts is that the opportunities here are virtually boundless. The sky is the limit!

Of course, I will reiterate my first piece of advice above by once again stressing that specialization matters. While it would be wonderful to be able to be a jack-of-all-trades who could cover all these issues effectively, that’s just impossible. You need to focus, and that is even truer today as the universe of tech policy issues expands rapidly. I had to abandon issues that I once cared deeply about, such as Internet governance, intellectual property, infrastructure regulation, and mass media policy. I wrote 4 books on those topics in the past decade, and now I’ve had to give up on them entirely to make room for all the hot new tech policy issues out there.

But while it may seem a bit overwhelming at times, again, the upside of all this is that you have countless opportunities at your disposal to make your mark in these new policy arenas. There has never been a more exciting time to be a technology policy analyst. Good luck, and I hope you enjoy it half as much as I do, because I am having a blast! Every day brings an exciting new challenge.

(Seriously, why would anyone want to cover any other issue?!)

*** Addendum, Sept. 2015 ***

On the whiteboard in my office I have a giant matrix of technology policy issues and the policy “threat vectors” that might end up driving regulation of particular technologies or sectors. Along with my colleagues at the Mercatus Center, we constantly revise this list of policy priorities and simultaneously make a (very unscientific) attempt to weight the potential policy severity in each area. I use 5 policy groupings: Privacy, safety, security, economic disruption, and IP. We then use this matrix to help us determine what we should be paying more attention to and then decide what sort of scholarly outputs are needed on each front. [See this post for more elaboration about the categories and issues.]

Several people who have seen that matrix in my office tell me I should do something more with it, but I’m not really sure what that something would be. But I thought it might make  sense to plop it into this old post to give readers a feel for the current generation of tech policy issues that might be worth focusing on. Again, there are lots and lots of opportunities here! I’ll try to upload new versions of the matrix as that giant whiteboard in my office morphs over time.

Yesterday it was my privilege to speak at a Free State Foundation (FSF) event on “Ideas for Communications Law and Policy Reform in 2013.” It was moderated by my friend and former colleague Randy May, who is president of FSF, and the event featured opening remarks from the always-excellent FCC Commissioner Robert McDowell.

During the panel discussing that followed, I offered my thoughts about the problem America continues to face in cleaning up communications and media law and proposed a few ideas to get reform done right once and for all. I don’t have time to formally write-up my remarks, but I thought I would just post the speech notes that I used yesterday and include links to the relevant supporting materials. (I’ve been using a canned version of this same speech at countless events over the past 15 years. Hopefully lawmakers will take up some of these reforms some time soon so I’m not using this same set of remarks in 2027!)

I) The fundamental problem we face in the world of communications and media policy today is easy and diagnose and, at least in theory, easy to remedy.

The Problem= asymmetrical regulation / “unlevel playing field”

• Policymakers are imposing different regulatory policies on different layers of the modern information ecosystem. (This is sometimes referred to as the “regulatory silos” problem.)
• Regulatory silos and unlevel playing fields create 3 additional problems. They:

1. are unfair to those players who suffer under more onerous rules;
2. threaten to roll the old onerous rules on newer and less regulated speech and communications platforms and technologies; and,
3. create uncertainty and threatens investment and innovations.

The Solution (again, simple in theory but not in political reality) = level the playing field by deregulating down to achieve parity instead of regulating up

II) Let’s get more concrete about how to accomplish that sort of liberalization and level the playing field. Three simple reform ideas can help:

1. “MFN clause for communications and media policy”: To the extent Congress continues to place ground rules on the information sector at all, it should consider borrowing a page from trade law by adopting the equivalent of a “Most Favored Nation” (MFN) clause for communications and media policy. In a nutshell, this policy would state that: “Any operator seeking to offer a new service or entering a new line of business, should be regulated no more stringently than its least regulated competitor.” Such a MFN for communications would ensure that regulatory parity exists within this arena as the lines between existing technologies and industry sectors continue to blur. Placing everyone on the same deregulated level playing field should be at the heart of telecommunications policy to ensure non-discriminatory regulatory treatment of competing providers and technologies at all levels of government. In other words, to level the proverbial playing field properly, we should “deregulate down” instead of regulating up to place everyone on equal footing.
2. “Moore’s Law” for information technology laws and regulations: With information markets evolving at the speed of Moore’s Law, public policy must as well. Toward that end, every new technology proposal should include a provision sunsetting the law or regulation 18 months to 2 years after enactment. And this principle should apply retroactively so that old rules are sunset on a rapid timetable. If Congress deems them vital, they can always be reauthorized. [See my Forbes column on this proposal.]
3. Comprehensive FCC reform, downsizing & defunding: You can’t truly deregulate communications and media markets if the primary regulator (the FCC  in this case) remains large and is constantly growing its budget and responsibilities. Regulators exist to regulate! Only by downsizing and defunding them can we truly deregulate these markets. (Alfred Kahn and the Democrats taught us that in the late 1970s when the comprehensively deregulated airline and transportation markets and then moved to abolish the agencies that oversaw those sectors as well. They understood that the very existence of those agencies was a major contributing factor to economic inefficiency and crony capitalism.)

III) If wasn’t that long ago that this sort of an approach was considered the model for how to move forward

Following the lead of the Democrats who deregulated airlines and transportation sectors in the late 1970s, a number of scholars in the 1990s and 2000s devised comprehensive reform proposals for communications and media markets. (Two old PFF projects built on this):

• “The Telecom Revolution”: May 1995 proposal from @ a dozen different free-market think tank analysts to replace the FCC with a much smaller agency.
• “Digital Age Communications Act” project (“DACA”): a 2005-06 set of proposals from over 50 non partisan academics to make the FCC behave more like the FTC. [See this paper by Ray Gifford for a concise summary of the project and all the proposals).

Generally speaking, both projects focused on same 5 reform objectives:

1. Replacing the amorphous “public interest” standard with a consumer welfare standard, which is more well-established in field of antitrust law
2. Eliminate regulatory silos and level the playing field through deregulation
3. Comprehensively reform spectrum not just through more auctioning but through clear property rights
4. Reform universal service by either voucherizing it or devolving it to the States and let them run their own telecom welfare programs
5. Significantly reforming & downsizing the scope of the FCC’s power of the modern information economy

• If we can get those 5 things done, we will have accomplished true deregulation of America’s information marketplace.  What we don’t want is another fiasco like the Telecommunications Act of 1996, which represented an effort at managed competition. That law intentionally avoided providing clear deregulatory guidance and instead delegated broad and remarkably ambiguous authority to the FCC. This left the most important deregulatory decisions to the FCC and, not surprisingly, the agency did a very poor job of following through with a serious liberalization agenda.
• Again, regulators generally don’t deregulate themselves! It is against their self-interest. Congress must impose restraint on the agency and limit (or, better yet, end) its powers.

IV) Some will say communications & media markets are too important to deregulate. But the exact opposite is true.

• America’s Founders thought media was important enough that they made sure that the First Amendment clearly stated that “Congress shall make no law” as it pertains to freedom of speech and the press. They got it exactly right.
• We need to return to that Constitutional prime directive for information markets and start removing the layers of unjust and unnecessary regulation that have encumbered these markets for the past 100 years. America’s communications and media policy should once again be the First Amendment, not the Communications Act of 1934 or the Telecom Act of 1996.
• What we need, to borrow the title of Richard Epstein’s book of the same title, is “simple rules for a complex world.”  Those simple rules include: the law of contract, torts and common law, anti-fraud statutes, etc.
• Such simple rules can govern our complex information ecosystem the same way they govern every other sector of our capitalist economy. We don’t need a sector-specific regulator or body of regulation for communications, media, and the Internet.

[Video clip of my remarks from the FSF panel follows.]

PFF has just published the transcript for an event we hosted last month asking “What Should the Next Communications Act Look Like?”  The event featured (in order of appearance) Link Hoewing of Verizon, Walter McCormick of US Telecom, Peter Pitsch of Intel, Barbara Esbin, Ray Gifford of Wilkinson, Barker, Knauer, and Michael Calabrese of the New America Foundation. It was a terrific discussion and it couldn’t have been more timely in light of recent regulatory developments at the FCC.  The folks at NextGenWeb were kind enough to make a video of the event and post it online along with a writeup, so I’ve included that video along with the event transcript down below the fold.

What Should the Next Coummunications Act Look Like [PFF Event Transcript] http://d1.scribdassets.com/ScribdViewer.swf

by Adam Thierer & Berin Szoka

We’re hoping that the Government Accountability Office (GAO) has made some sort of mistake, because it’s hard to believe its latest findings about the paperwork burden generated by Federal Communications Commission (FCC) regulatory activity. In late January, the GAO released a report on “Information Collection and Management at the Federal Communications Commission” (GAO-10-249), which examined information collection, management, and reporting practices at the FCC. The GAO noted that the FCC gathers information through 413 collection instruments, which include things like: (1) required company filings, such as the ownership of television stations; (2) applications for FCC licenses; (3) consumer complaints; (4) company financial and accounting performance; and (5) a variety of other issues, such as an annual survey of cable operators.  (Note: This does not include filings and responses done pursuant to other FCC NOIs or NPRMs.)

Regardless, the FCC told the GAO that it receives nearly 385 million responses with an estimated 57 million burden hours associated with the 413 collection instruments. A “burden hour” is defined under the Paperwork Reduction Act as “the time, effort, or financial resources expended by persons to generate, maintain, or provide information to a federal agency.” And the FCC is generating 57 million of ‘em! Even though we are frequently critical of the agency, these numbers are still hard to fathom. Perhaps the GAO has made some sort of mistake here. But here’s what really concerns us if they haven’t made a mistake.

Assuming the GAO got these numbers right, just think of the deadweight economic loss associated with all this paperwork, and think of how it will grow in months and years to come! Can you imagine how much the numbers have likely grown so far this year, with the agency generating so many new public notices, notices of inquiry, requests for information, and more?  And just think what the paperwork burden will look like once the National Broadband Plan and Net neutrality regulations kick in!  Oh my… The agency has already promised lots more notices will flow out of the National Broadband Plan to implement various portions of it.

In terms of the deadweight loss, go back to the numbers Adam cited in his essay last week asking, “Will the FCC’s Nat’l Broadband Plan Be “Full Employment for Lawyers”? As noted there, lawyers were about the only group that did fairly well thanks the FCC’s over-zealous regulatory ways in the post-Telecom Act period. Greg Sidak of Georgetown University Law School found that the number of telecom lawyers–as measured by membership in the Federal Communications Bar Association–grew by a stunning 73% in the late 1990s. That was largely driven by a 37% hike in FCC spending and a tripling of the number of pages of regulations in the FCC Record in the post-Telecom Act period. Sidak argued, “If one assumes (very conservatively) that the average income of an American telecommunications lawyer is $100,000, then the current membership of the FCBA represents an annual expenditure on legal services of at least $340 million.” And we all know that those lawyers were making a heck of lot more than just $100K (and billed even more), so Sidak’s estimates were ultra-conservative: The deadweight loss of all this legal activity was much greater.

Indeed, a very conservative estimate of hourly rates for Washington communications lawyers would be $200/hour, but even at that rate, 57 million burden hours would equate to a total cost of $11.4 billion. In fact, when major Washington law firms use “blended rates” to bill out the time of senior partners, junior associates, and paralegals working in teams on things like regulatory filings, the figure is more like $350-400 (if not more)—which would equate to a deadweight cost of $20-23 billion every year.  To put that staggering number in perspective, leaks about the National Broadband Plan indicate that the FCC might be planning on spending about that much to subsidize broadband deployment over a decade.

Or, to use another comparison, NASA’s 2010 budget is a mere $18.69 billion.  That’s in the same ballpark as what, according to the GAO’s man-hour estimates, the FCC’s reporting requirements cost U.S. industry every year.  As Wernher von Braun famously said about the Apollo program, which he led: “We can lick gravity, but sometimes the paperwork is overwhelming.”

So, “if we can put a man on the moon,” as they say, why can’t we do something about this paperwork burden so America’s communications, media, and high-tech providers can focus on actually providing better, faster, and cheaper service to consumers?

Today I am attending, and speaking at, a terrific event in downtown DC sponsored by the Catholic University Law School on“Implementing the National Broadband Plan: Perspectives from Government, Industry, and Consumers.” It’s being held at the offices of the law firm of Wiley Rein LLP.  Edward Lazarus, Chief of Staff to FCC Chairman Julius Genachowski kicked off the event with a nice keynote address talking about the broad goals of the FCC’s coming National Broadband Plan. Lazarus broke the ice by joking with the crowd — which is heavily made up of communications industry lawyers — that “The FCC is doing everything it can to provide full employment for telecom lawyers.  Whatever else we are failing at, we are succeeding at that.” Again, it was a joke, so I don’t want to make too much out of it, but…  No, strike that, I do want to talk about that for a minute! Because this is actually a very important question: Exactly how much bureaucracy and deadweight loss to the economy (in the form of more lawyering and lobbying) is going to accompany the National Broadband Plan?

Two years ago, I posted an essay on “Lawyers, Lawsuits and Net Neutrality Regulation,” in which I attempted to highlight the uncomfortable fact that Net neutrality regulation will likely lead to a bureaucratic nightmare at the FCC and a lawyer’s bonanza once the lawsuits start flying in court. Of course, now we have Net neutrality regulations and a National Broadband Plan pending at the FCC, so the potential for bloated bureaucracy will only grow larger. Do you think I am exaggerating? Well, here are some facts to consider from our recent experience in the field of “telecom reform.”  In the years following passage of the Telecom Act, entire forests fell because of the thousands of pages of regulatory and judicial interpretations that were handed down trying to figure out what that word meant. In fact, let’s take a quick tally of the paperwork burden the FCC managed to churn out in just three major “competition” rules it issued in an attempt to implement the Telecom Act and define the “cost” of unbundled network elements (“UNEs”):

• Local Competition Order (1996): 737 pages, 3,283 footnotes
• UNE Remand Order (1999): 262 pages, 1,040 footnotes
• UNE Triennial Review (2003): 576 pages; 2,447 footnotes

That’s 1,575 pages and 6,770 footnotes worth of regulation in just three orders! This obviously does not count the dozens of other rules and clarifications the FCC issued to implement other parts of the Telecom Act. Nor does it include the hundreds of additional rules issued by state public utility commissions (PUCs), who actually received expanded authority under some of these FCC regulatory orders.

Again, this was all implemented following the passage of a bill (The Telecom Act) that was supposed to be deregulatory in character!  But wait, it gets worse. This doesn’t even begin to cover the tens of thousands of pages of legal filings, economic studies, consultant reports and other filings submitted to the FCC and state agencies by groups and individuals looking to have a say in the matter.

Lawyers, in particular, did quite well thanks to the FCC’s endless stream of litigation-prone rulemakings during the 1996-2003 period. Greg Sidak of Georgetown University Law School found that the number of telecom lawyers–as measured by membership in the Federal Communications Bar Association–grew by a stunning 73 percent in the late 1990s. That was largely driven by a 37 percent hike in FCC spending and a tripling of the number of pages of regulations in the FCC Record in the post-Telecom Act period. Sidak argues, “If one assumes (very conservatively) that the average income of an American telecommunications lawyer is $100,000, then the current membership of the FCBA represents an annual expenditure on legal services of at least $340 million.” And we all know that those lawyers were making a hell of lot more than just $100K, so Sidak’s estimates are ultra-conservative and the deadweight loss of all this legal activity was much greater.

Even the lawyers admitted what a boon all this regulation was to their business. In the wake of one controversial FCC rulemaking in 2003, telecom lawyer Dana Frix of the firm Chadbourne & Parke told The New York Times that “Every word will be challenged… My children will go to college on this stuff. This is a lawyer’s dream.” That pretty much says it all, now doesn’t it?

Look, I know that many supporters of a National Broadband Plan and Net neutrality regulation have good intentions. They really do think that The Plan and these rules will make the world a better place. But they need to acknowledge that regulation sometimes has unintended consequenses, especially when bureaucrats are asked to embark on grand “National Plans,” or to interpret amorphous terms like “neutrality.”  Once the programs and laws get on the books, volumes of regulations are promulgated interpreting and implementing them. That is followed by still more regulations interpreting, enforcing, and expanding the earlier regs. And then the lawsuits begin. Followed by still more regs and then more laws trying to straighten it all out after the courts say its all hopelessly arbitrary. Pretty soon we forget what we were fighting over. It’s all just about the paperwork and the lawsuits. And it becomes a grand sport for the armies of well-heeled laywers, lobbyists, consultants and economists who operate inside the parasitic economy we call “the Beltway.”

So, as much I wish Mr. Lazarus really was just joking about the FCC “doing everything it can to provide full employment for telecom lawyers,” the reality is that that is exactly what will happen following implementation of the National Broadband Plan and Net neutrality regulations. And that’s why the room full of telecom lawyers sitting here with me today were really laughing when Mr. Lazarus delivered that punch line… Laughing all the way to the bank, that is.

Whatever you think about this messy dispute between AT&T and Google about how to classify web-based telephony apps for regulatory purposes — in this case, Google Voice — the key issue not to lose site of here is that we are inching ever closer to FCC regulation of web-based apps!  Again, this is the point we have stressed here again and again and again and again when opposing Net neutrality mandates: If you open the door to regulation of one layer of the Net, you open up the door to the eventual regulation of all layers of the Net.

You might not buy that story initially but if you doubt it then I invite you to read just about any history of American broadcast media regulation over the course of the past seven decades. (You might want to start with Krattenmaker & Powe’s Regulating Broadcast Programming or Jonathan Emord’s Freedom, Technology, and the First Amendment). In such histories you will find a common theme: Once regulation of media and communications platforms gets underway, the natural progression of things is uni-directional — Up!  That is, when new questions arise about how to “deal with” a new service, network, platform, or technology, the general tendency is the “regulate up” instead of “deregulating down.”  When regulators are given a greater say about the contours of markets as technologies evolve and/or converge, we shouldn’t be surprised that their first instinct is to “bring them into the fold.”

And, sadly, that is exactly what is likely to occur eventually with Google Voice. The only really interesting question is what else regulators start mucking with in the search and applications layer once they get their hands on it.  And if you still insist that I am being overly paranoid about “regulatory creep” and the prospect of the FCC gradually transforming into the Federal Information Commission, then consider what the agency had to say about cloud computing in paragraph 60 (pg. 21) of the FCC’s recent Wireless Innovation and Investment Notice of Inquiry, which was launched on August 27th:

As other approaches, such as cloud computing, evolve, will established standards or de facto standards become more important to the applications development process? For example, can a dominant cloud computing position raise the same competitive issues that are now being discussed in the context of network neutrality? Will it be necessary to modify the existing balance between regulatory and market forces to promote further innovation in the development and deployment of new applications and services?

Wow, who knew that the FCC even had the authority to oversee or regulate the cloud, right?  Well, they don’t. But, again, this is exactly how things have unfolded before: Throw statutory authority to the wind and slowly start extending the agency’s regulatory tentacles into new areas, services, technologies, platforms, and networks.  In this case, you can just imagine how some folks will use that FCC language to accuse Google of being in “a dominant cloud computing position” such that “the context of network neutrality” will be applied to cloud service (like Google Voice!) to “modify the existing balance between regulatory and market forces.”  Indeed, that’s pretty much what AT&T is suggesting in their letter to the FCC this week.

In a post yesterday over at the Google Public Policy Blog, my old friend Rick Whitt of Google insists that Google Voice is different than a traditional common carrier telecom service and that it doesn’t belong in the same regulatory bucket as those older voice services.  To Rick and my other friends at Google, I have only one thing to say about that argument: Good luck with that!  My prediction: Within two to three years you’ll be under the FCC’s thumb.

Again, I very much hope I am proven wrong. But I know that I won’t be wrong because neither side is going to back down in the escalating net neutrality war of mutually assured destruction.  “Regulating up” will carry the day and become, once again, our new telecom M.A.D. policy.

Big news in these parts.

The celebrated openness of the Internet — network providers are not supposed to give preferential treatment to any traffic — is quietly losing powerful defenders. Google Inc. has approached major cable and phone companies that carry Internet traffic with a proposal to create a fast lane for its own content, according to documents reviewed by The Wall Street Journal. Google has traditionally been one of the loudest advocates of equal network access for all content providers.

TLFers and commenters: Go.

One of the reasons that so many of us here take issue with proposals to expand regulation of communications, broadband, and media markets is because we have studied the horrendous inefficiencies of economic regulation in practice. We oppose regulatory proposals not because of a “blind faith” in free markets, but because we understand that even when markets stumble they correct themselves quicker and more efficiently than regulatory systems do. One can profess the supposed theoretical benefits of enlightened “public interest” regulation all they want, but the facts are the facts. And the facts do not support the proposition that government regulation generally enhances consumer welfare.

In that regard, Tim Lee’s new Net neutrality report for Cato does a nice job of surveying some of the past unintended consequences of regulation. Also, even though it is now 10 years old, I highly recommend “Economic Deregulation and Customer Choice” by Jerry Ellig and Robert Crandall. It’s an outstanding overview of why economic regulation of various industries failed consumers so miserably in the past.

But if you want even more shocking proof of how horrendously inefficient communications regulation can be in practice, then you must read my PFF colleague Barbara Esbin’s two essays this week on the Universal Service Fund (USF): “The High Cost of USF Support,” and “More FCC Support Fund Follies.” In these two essays, Esbin walks the reader through various grim reports and statistics that have been released recently documenting the failures of the USF.

Her first essay notes how a recent FCC Inspector General report found that the USF “High Cost” fund is spiraling out of control. According to a FCC press release, that report found that “a program is at risk if the erroneous payment rate exceeds 2.5% and the amount of erroneous payments is greater than $10 million. The estimated erroneous payment rate for the High Cost Program (“HCP”) was 23.3%. The previous estimate was 16.6%. Total estimated erroneous payments were $ 971.2 million as compared with the previous estimate of erroneous payments of $617.8 million. Accordingly, the FCC-OIG concluded that the High Cost Fund program is “at risk” under applicable [..] criteria.”

Esbin puts these shocking results in perspective:

“At risk” is a surely a euphemism for a program that loses in “erroneous payments” nearly one out of every four dollars collected from telephone subscribers. In 2007, pursuant to FCC rules, telephone consumers were effectively taxed over $4 billion for the high-cost portion of the USF. Thus, nearly $1 billion dollars of subscriber money went out the door in “erroneous payments.” As the report makes clear, erroneous payments include both over- and underpayments, and also instances where the agency is unable to discern whether a payment was proper as a result of “lack of documentation.” The report’s conclusions state that the “rate of improper overpayments is 22.8%, and the proportion of improper overpayments out of total improper payments is 98.2%.” To be considered “erroneous,” an payment “need not be the result of fraudulent misrepresentation, or a corrupt administrative process.” “Nor does it necessarily exclude those factors as potential causes of erroneous payments.” Significantly, nor are “the erroneous payments . . . necessarily recoverable from recipients by process of law.” Fabulous. Not only has nearly $1 billion in erroneous overpayments gone missing, but even if final audits indicate where it has gone, it may not be recoverable! Among the interesting results of this preliminary report are the identified causes of erroneous payments. According to Table 2 of the report, 50% of the causes of erroneous payments can be attributed nearly equally to two factors: either “Inadequate Documentation” (25.3%) or “Inadequate Auditee Processes and/or Policies and Procedures” (24.6%). Another 10% “Disregarded FCC Rules” and 12% had “Applicant/Auditee Weak Internal Controls.” That is, roughly 75% of the erroneous overpayments can be attributed to poor bookkeeping, inadequate internal controls and “disregard” of FCC rules. This is stunning information. No wonder it made its appearance the day before Thanksgiving.

But wait, things get worse. So much worse. In Esbin’s second essay, she notes that:

On Monday, the OIG released its Semi-Annual Report to Congress, discussing the full range of audit activities conducted from April 1, 2008 to September 30, 2008. Thus we learn that in addition to the loss of nearly $1 billion in erroneous overpayments to the High Cost program, another fund the FCC is ultimately responsible for, the “Telecommunications Relay Service” (TRS) Fund, which provides funds for a variety of telephone transmission services for those with hearing and speech disabilities, also appears to be at risk for substantial overpayments due to the lack of adequate controls. Since 1993, according to the FCC’s website, the Commission’s rules have required that each common carrier providing voice transmission services provide TRS throughout its service area. All providers of interstate telecommunications services contribute to the TRS Fund, and TRS providers recover the costs of providing interstate services from the Fund on a minutes-of-use basis. Intrastate TRS funding is generally administered by the states, although some intrastate TRS offerings are supported by the interstate TRS Fund. The current TRS Fund Administrator is the National Exchange Carrier Association (NECA). Although NECA directly manages the Fund, the FCC sets the Fund size and carrier contribution factor annually and is ultimately responsible for Fund oversight. When the TRS Fund started, it disbursed about $31 million, growing to over $38 million by 1999. Since 1999, the OIG report states that the TRS Fund has increased approximately 50-80% each year, to reach $637 million for the Fund’s fiscal year from July, 2007 to June, 2008. The size of the fund for the current fiscal year is $850 million, a 26% increase over the previous fiscal year. That is, in roughly ten years the TRS Fund has ballooned from $38 million to $850 million! What, if any, other communications service has seen 50-80% growth in costs per year?

Indeed, that is a shocking degree of waste and inefficiency by just about any standard. And Esbin goes on to document specific examples of this waste and inefficiency in action within the TRS Fund. It’s shocking stuff and doesn’t make for pleasant reading if you care about good government.

Barbara is actually much more tempered and tolerant than me when it comes to what to do about all this. She recommends a lot more reform and oversight. If you ask me, however, then entire USF program should be dismantled immediately and any future support deemed necessary should be distributed directly to consumers at the state level in the form of a welfare payment. After all, at root, that’s what universal service is: a communications industry welfare program, but one in which most of the support flows to companies instead of individuals. And that makes it one of the most insanely misguided and inefficient regulatory / subsidization systems known to man. 13 years ago, in one of the very first things that PFF ever published ( The Telecom Revolution: An American Opportunity) I was advocating exactly this sort of a plan along with a dozen other think tank colleagues. (And we also set forth another, less radical reform plan than the “voucher-ize & devolve” plan I favored).

But no one listened. Business as usual continued. And so the endless waste and inefficiencies continue. Somebody will have to remind me how any of this benefits consumer welfare. I can’t see how anyone could make such a case, and I would hope the USF follies serve as a cautionary tale for how the best of intentions are meaningless when it comes to what regulation actually means in practice. Because it sure ain’t pretty.

But hey, it’ll all be different going forward right? We just need to have faith in the media reformistas and the Net neutralitistas.  If we click our heels together enough time and just wish hard enough, all our dreams can come true.

Sure.

My colleague Barbara Esbin, a Senior Fellow and Director of the Center for Communications and Competition Policy at The Progress & Freedom Foundation, was asked to pen a short history of the net neutrality wars in the U.S. for a French publication, La Lettre de l’Autorité.  Her essay provides an excellent, concise overview of where we’ve come from and where we might be heading on this front.  I’ve pasted the entire essay down below, or you can download the PDF here.

Net Neutrality Regulation in the United States by Barbara Esbin

PFF Progress Snapshot Release 4.21 October 2008

The United States moved closer to “Net Neutrality” regulation this year when the Federal Communications Commission found that Comcast, a cable broadband Internet service provider, violated a set of Internet policy principles the FCC adopted in 2005 by limiting peer-to-peer (P2P) traffic. The ruling was the culmination of a ten-year effort that began as a call for wholesale “open access” to the cable platform for third-party Internet service providers. Requests for open access first emerged in 1998 when the FCC considered AT&T’s acquisition of cable operator TCI. The FCC rejected open access, but the issue quickly re-emerged in a subsequent proceeding to determine the appropriate regulatory classification of cable Internet service. Depending on how the FCC categorized cable Internet service, it would either be subject to telecommunications “common carrier” requirements, “cable service” requirements, or treated as a then-unregulated “information service.”

In 2002, the FCC classified cable Internet service as an “information service.” This meant that the telecommunications common carrier requirements — that service be provided upon request, without unreasonable discrimination as to rates, terms and conditions of service — would not apply to cable Internet services. The FCC’s decision was upheld by the U.S. Supreme Court in NCTA v. Brand X. Afterwards, advocates of open access re-directed their efforts away from advocating wholesale access for third-party ISPs, and towards rules aimed at consumer rights to a “neutral network” or “net neutrality.”

 In 2005 the FCC extended its deregulatory “information service” approach to wireline broadband Internet services provided, thus freeing telephone companies of traditional common carrier mandates for these services. The FCC’s decisions not to impose cable open access and to relieve telcos of common carrier obligations reflected a policy of fostering infrastructure deployment through market operations. Concurrently, the FCC released a “Policy Statement,” declaring four “entitlements” that Internet service consumers should enjoy: (1) access to lawful content of their choice; (2) ability to run chosen applications and services; (3) ability to connect their choice of legal devices that do not harm the network; and (4) competition among network, application and content providers. The Policy Statement expressly stated that the FCC was not adopting rules and that the principles are subject to reasonable network management. The FCC subsequently stated that it would entertain complaints concerning violations of the principles, and in early 2007, the FCC opened an “Inquiry” into broadband industry practices, seeking information about network management and asking whether it should impose rules.

In late 2007, an advocacy group filed a Complaint alleging that Comcast had violated the FCC’s Policy Statement by “secretly degrading” BitTorrent traffic, thus interfering with the Internet rights of its subscribers, and that its practices did not constitute reasonable network management. Several months later, Comcast and BitTorrent agreed to work together to resolve network congestion issues through the use of protocol-agnostic network management. Yet on Aug. 20, 2008, the FCC released an Order purporting to rule on the Complaint, finding that Comcast had violated the Internet policy principles, and rejecting its defense that its practices were reasonable. The FCC ruled that Comcast’s network management practices: discriminated among Internet applications and protocols rather than treating all equally; effectively blocked Internet traffic; posed significant risks of anti-competitive abuse; were inconsistent with “an open and accessible Internet;” and that Comcast’s failure to disclose its practices compounded the harms. Alternative means of managing network congestion approved by the FCC include metered usage and throttling the connection speeds of excessive users.

This action was said to be an “adjudication,” although traditional agency complaint rules were not followed. Comcast was given 30 days to disclose to the FCC “the precise contours” of its network management practices and describe what it will do instead to address network congestion. The effect of the Order is to establish a fifth “non-discrimination” Internet policy principle, to be implemented by the FCC through case-by-case adjudication of individual complaints rather than ex ante rules. Thus, 10 years later, and without explicit acknowledgment, the FCC has effectively abandoned its “hands off” approach and imposed a form of common carrier regulation on ISPs.

I have written elsewhere on legal and procedural flaws that may doom the Network Management Order. In summary: (1) the FCC has not been granted explicit authority to regulate the provision of broadband “information services;” (2) the “ancillary jurisdiction” on which the FCC relied was not reasonably related to its other statutorily mandated responsibilities; (3) having failed to adopt enforceable rules concerning broadband network management, the FCC could not lawfully subject Comcast to an “adjudication” concerning its practices; and (4) the Complaint filed against Comcast was defective in several respects and should have been dismissed.

The Network Management Order has been appealed by Comcast and several advocacy groups. Comcast challenges the basis on which the FCC found that it had violated federal policy in the absence of pre-existing legally enforceable rules. The advocacy groups appealed the FCC’s failure to order Comcast to immediately cease and desist interfering with P2P traffic. The appeals have been consolidated and will be heard by the D.C. Circuit Court of Appeals, a court that has shown little patience for the FCC’s unusual procedures and the FCC’s use of the doctrine of “ancillary jurisdiction” to expand its reach. Meanwhile, several network operators have announced bandwidth caps or plans to implement them. In addition, there are renewed calls both for the FCC to establish ex ante rules and for legislative action to grant the FCC express regulatory authority over broadband Internet service providers. In short, the legal and policy debate over net neutrality continues.

• Barbara Esbin is a Senior Fellow and Director of the Center for Communications and Competition Policy at The Progress & Freedom Foundation.