No New Telecom Act

For years it’s been obvious that we need a new telecom act. The Telecommunications Act of 1996 was largely aimed at promoting telephone competition and is now quaintly outdated. Today, carriers that want to provide traditional voice services still have to jump through a gauntlet of regulatory requirements while ISPs providing VoIP or no voice product have almost no regulation.

The 1996 Act is dated and some of its provisions cause unneeded problems within the industry. A good example is Google Fiber’s struggle getting onto poles in various cities. Google has shunned taking the regulated path, but in doing so they have not been availed the protections of the 1996 Act that provides access to poles, conduits and ducts. Since most new fiber builders are not offering traditional voice, the distinctions between regulated and unregulated carriers is out of date. But unless Congress changes the rules established by the 1996 Act, the FCC and the courts have choice but to enforce any explicit regulations required by that Act.

It’s also easy to overlook that the 1996 Act rewrote many of the rules for the cable industry. For example, some of the rules covered by the Act still require traditional cable providers to provide several specific tiers of cable service. It’s obvious that these rules no longer make sense and are hindering traditional cable companies from offering competitive small packages and the a la carte programming that customers clearly want.

At the 2018 State of the Net conference held last week Rep. Greg Walden, the chair of the House Energy & Commerce Committee said that he did not foresee any major telecom legislation this year, but rather piecemeal tweaks of telecom law to fix obvious problems. This same sentiment has been expressed by Sen John Thune who has the same role on the Senate Committee on Commerce, Science and Transportation. These committees are where telecom legislation begins.

We see this piecemeal approach in Congress right now. There are nearly a dozen proposed bills floating around Congress right now that have an impact on telecom. For example:

  • There are several bills that would simplify the paperwork to get funding from the Universal Service fund and would make it easier to fix telecom infrastructure after a natural disaster.
  • There are also several bills that would loosen or exempt telecom projects that get federal funding from having to undertake environmental and historic preservation reviews if facilities are placed in existing rights-of-ways.
  • There is a bill to streamline the application for placing telecom facilities on federal land, including a one-year shot-clock forcing a yes or no answer to an application.
  • There is a proposed bill that would require the FCC to monitor and improve broadband availability in ‘urban broadband deserts”.

There is nothing wrong with any of these bills and they propose to make changes that make sense. For example, the requirement to undertake environmental and historic preservation studies when using federal grant money probably added 15% of cost to projects funded by the BTOP program a few years ago. It makes no sense to do these studies when new telecom facilities are to be placed on existing poles or within the existing shoulders of roads. Tweaking the rules will save unneeded expense for future fiber projects.

But these bills are all small in scope and ignore the big issues. The time has probably come to eliminate telephone regulations, other than perhaps the few rules that directly protect consumers. It’s also time to open up access to poles and conduits to everybody without making them jump through the hurdles created by the 1996 Act. It’s time to eliminate any federal rules that dictate how cable networks must package their programming. There are number of these big issues that cannot be easily fixed by small piecemeal bills.

There is an even bigger issue looming over the creation of a new telecom act. The FCC has basically written itself out of the picture for regulating broadband. There are some aspects of broadband that need to be regulated and Congress would have to drag the FCC back into this role.

A new telecom act could create a fresh start for the industry and the FCC. All of the drama concerning Title II regulation of broadband was due to the fact that Congress failed to provide any guidance for regulating broadband. The FCC struggled over the last decade trying to find a backdoor way to justify governing some aspects of broadband – something the Congress could have fixed at any time by giving explicit authority to the FCC.

Regulating broadband one small inch at a time is not good policy. Any ISP can rattle off a list of a dozen things that don’t work as well as they would like. The only way to get the fresh start we need is with a new telecom act aimed at the new world we really live in. We are no longer a world that needs heavy telephone regulations or that should tell cable TV providers what to put on the air. What we need is a new framework that would empower the FCC to make sure that we can affordably build the fiber and wireless networks that are vital to our future. We need rules that require that broadband stay within affordable reach of most households. We need rules that prohibit ISPs from spying on customers. We really need Congress to do their jobs and restart the industry on a regulatory path that fits our times.

Reauthorizing the FCC

FCC_New_LogoSenator John Thune (republican from South Dakota and head of the Senate Commerce Committee) has introduced a reauthorization bill for the FCC. This hasn’t been done at the FCC for nearly 25 years but is a routine process for most federal agencies. The authorization bill would reestablish a fresh basis for how the FCC operates and is funded. As long as controversial riders don’t get attached such as trying to undo net neutrality or something similar, the bill ought to sail through Congress and get signed by the president.

The reauthorization is only for two years, which signals Congress’s intent to tackle a new telecommunications act in the near future. Here are a few things the bill will do if passed:

Examine FCC Regulatory Fees. The FCC charges regulatory fees and the bill would authorize the GAO to take a look at how those fees line up with the costs of running the FCC. Since this hasn’t been examined in a long time it’s easy to imagine fees being added, deleted, or modified to bring the fees in line with current activity and costs of running the FCC.

The FCC charges a number of different kinds of fees. For instance there are fees for processing applications for equipment approval, tariff filings, antenna site registration and other similar functions. The FCC also charges a host of annual regulatory fees to cable television systems, wireless carriers, satellite providers, interstate telco providers, media companies and submarine cable network owners. The agency also charges fees to participate in spectrum auctions.

Protects E-Rate Funding. The bill would shield E-Rate payments made to schools and libraries from being lowered due to any other government funding action, such as last year’s sequester.

Changes FCC Transparency Practices. The Commerce committee oversees a number of other government agencies such as the Consumer Product Safety Commission, the Surface Transportation Board, and the Federal Energy Regulatory Commission. Over the last decade those agencies have had changes in how documents at the agencies are made public and how they report to Congress. The FCC is the only agency that has not been subject to these transparency best practices. However, earlier this year the FCC started to voluntarily make some of these changes on their own.

Clarifies USF Support Rules. In 2004 the USF Joint Board recommended that a household only count for calculating universal service funding one time. This means that a household can’t count for calculating a subsidy for both a wireline and a wireless connection. Congress has been renewing this requirement in the annual funding appropriation for the FCC every year since then and this would codify that restriction to be permanent.

Clarifies Terms of Office for Commissioners. The bill would allow a Commissioner to stay in office after their 5-year term until a successor has been appointed. This has sometimes been done in practice, but this would make this a permanent rule.

Continues Funding for Spectrum Auctions. The bill assures that the FCC will be sufficiently funded to operate spectrum auctions, which often brings in huge revenues to the general government coffers.

The bill is expected to be voted on in the Commerce Committee by the end of March. The danger between now and becoming a law is going to be the temptation of Republicans to use the bill as a way to change a few FCC rules that they don’t like. The two recent FCC rulings they most hate are net neutrality and the rules that ban states from restricting municipal participation in broadband. Both of those FCC rules are under appeal in federal courts, but a number of congressmen have never stopped publicly complaining against the rulings. If the bill gets riders that try to change those rulings it would probably be impossible to get a presidential signature since President Obama strongly supports both of those FCC rulings.