Regulation - What is it Good For?

The Politicization of the FCC

Before the citizens of Georgia elected two new Democratic Senators, it looked like a Republican Senate was on a path to lock up the FCC by not approving any new Commissioners. This was threatened by Mitch McConnell and other Senators who didn’t want the FCC to pursue the reintroduction of net neutrality and broadband regulation.

The current FCC was already politicized when late last year the President didn’t reappoint Mike O’Reilly as a Commissioner after O’Reilly voiced his opinion that the FCC didn’t have the authority to overturn Section 230 of the FCC’s rules that provide a shield for web companies to not be sued over content posted by the public. O’Reilly thought that only Congress has that authority, and from I can tell, he is right. The politicization continued when the President appointed Nathan Simington as the new FCC Commissioner – somebody with virtually no telecom experience, but who is a vocal supporter of eliminating Section 230 rules.

The FCC has always been a little political, in that new administrations have been able to appoint a new Chairman who supposedly follows the political inclination of the new administration. But the FCC is an independent agency and sometimes FCC Commissioners surprise the White House. But for the most part, FCCs tend to follow the basic philosophy of the party in power. This is something that is part of what I call the regulatory pendulum, where the FCC and other regulatory agencies tilt due to politics towards the corporations they regulate or towards the public they are supposed to protect.

But in the past, the shifts that came with changes of administration have been subtle, because the vast majority of what the FCC does is not political or controversial. Probably 90% or more of the topics that make it onto the FCC’s dockets are not political but have to do with overseeing the telecom industry. There is nothing political about FCC actions like approving new cellular handsets or trying to stop robocalling.

To some extent, the current politicization of the FCC can be attributed to Congress, which has been too divided and partisan to pass a new telecom act. The current primary telecom rules were passed in 1996 when broadband access meant AOL and CompuServe, and the rules governing broadband are badly out of date. It’s like we’re regulating self-driving cars with horse and buggy rules.

Without updated directions from Congress, the FCC is forced to somehow fit desired policy changes inside of existing rules. That was the primary reason for the convoluted process the current FCC undertook to eliminate broadband regulation. The problem with these ad hoc workarounds is that a subsequent FCC can undo every workaround, and the new FCC in 2021 is likely to reimpose broadband regulation and net neutrality.

None of this regulatory back and forth is healthy for the FCC or healthy for the country. When the FCC gets tainted by charges of political bias, then the public and the industry come to have no faith in the FCC or anything they order.

The courts ruled that the current FCC was within its regulatory powers to undo broadband regulation – and that same court ruling will mean that a new FCC has the power to undo anything the last FCC did. If you ask the executives of the largest ISPs what they most want out of regulation, they will tell you its consistency. The big ISPs were perfectly fine living with the net neutrality rules, and the CEO of every big ISP went on the record saying so. What they are not fine with is the FCC changing rules on net neutrality, privacy, and other important issues every time there is a change of administration.

Unfortunately, the power to stop this policy yo-yo is in the hands of Congress and I don’t hold out any big hope that Congress can agree on important telecom issues to the extent needed to issue an updated Telecom Act. New telecom legislation would provide a clear set of policies that would apply to an FCC appointed by Democrats or Republicans. But maybe Congress will surprise us all and dig in on a bipartisan basis and figure this out. Broadband and related topics are too important to allow a big policy shift every time there is a change in the White House.

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