In this response to Professor Weiser, former FCC Commissioner Kathleen Q. Abernathy agrees with many of Weiser’s criticisms, but cautions that care must be taken in identifying the roots of the Commission’s problems and in assessing strategies for reform. Abernathy concurs with Weiser’s view that the FCC should pursue a holistic policy agenda; should empower its staff to develop economic, technical, and legal analysis unencumbered by a pre-determined political agenda; should rely on such analysis and on its own fact-gathering; and should expand its working relationships with other governmental entities, both foreign and domestic. She then offers some caveats to Weiser’s analysis. She notes that many of Weiser’s specific criticisms apply to the decisions of specific agency leaders rather than to the agency itself, and emphasizes that the FCC’s agenda-setting powers are constrained by numerous factors. These include rapid technological progress, the role played by the judicial, legislative and executive branches in communications policymaking, and unexpected disasters both natural and man-made. Moreover, she notes that there is an inherent tension between the goals of holistic agenda-setting, on the one hand, and evidence-based decision-making, on the other. Ultimately, Abernathy argues, the only way to ensure that the values Weiser defends are appropriately reflected — and appropriately balanced — is to ensure that the next Chairman and senior agency managers (and, where relevant, the other Commissioners) are committed to pursuing a holistic agenda and to evidence-based decision-making; willing to change course as necessitated by new facts, new analysis, or external influence; and open to input from and cooperation with stakeholders of all sorts.
Kathleen Q. Abernathy
Wilkinson, Barker, Knauer, LLP
The new administration should pursue “change we can believe in” at the Federal Communications Commission (FCC) by appointing commissioners who are committed to procedural fairness, administrative effectiveness, substantive efficacy, and the public interest. We should hold their feet to the fire until they deliver on their promises.
Procedural fairness requires transparency, consistency and accountability, including issuance of proper notice of rules, public hearings, and objective peer review of research. Administrative effectiveness requires that the agency adopt a strategic plan to identity key issues, launch proceedings early to deal with then, set reasonable timelines and adhere to them, and maintain an objective stance before issuing rules. To achieve substantive efficacy the new administration should pursue a mix of actions that blends immediate, important and symbolic goals.
Defining the public interest is the most important and challenging task for a new Commission. At this moment it is both extremely important and also more manageable because the contrasts that need to be drawn are quite stark.
The failure of the extreme laissez faire, trickle down economics across a range of sectors, including telecommunications, should be launch-point for a new direction in communications policy. The Communications Act of 1934, which was butchered by the faulty implementation of the Telecommunications Act of 1996, was not an antiquated relic of a bygone era; it was one of the pillars of a stable, progressive economy. It has now become quite clear that abandoning the New Deal’s pragmatic, progressive principles was a huge mistake.
Misled by the effectiveness of the New Deal legislation, market fundamentalists undervalued consumer and investor protections and the importance of smoothing out boom and bust cycles, as well as ensuring universal, affordable, adequate and stable basic service in key sectors like finance and utilities. We need to restore the effective oversight across the infrastructure of the economy (finance, telecommunications, electricity, commodity markets) that was foolishly abandoned in the past couple of decades. The FCC should implement the Act based on facts and not ideology or theory:
Reinstate nondiscrimination rules for the networks essential to our democracy and the Internet commerce critical to our economic and social fabric as a nation;
Reinvigorate the commitment to diversity and localism in the mass media;
Update universal service to ensure affordable broadband for all consumers without enriching telecom companies or favoring one technology over another;
Reinstate a spectrum and equipment policy that prevents dominant firms from blocking any form of potential competition through either infrastructure (including the airwaves), devices or applications; and
Ensure that stimulus does not deteriorate into corporate welfare, as the financial bailout did. A progressive stimulus package should support the distinguishing features of 21st century infrastructure — human capital and social networks — with the majority of funding going directly to people and communities not communications companies.
Conference on Reforming the Federal Communications Commission
Director of Research Consumer Federation of America
The industries that the FCC was created to regulate are morphing into a substantially more complex configuration. We have moved from the industrial age of traditional telecoms and broadcasting to a knowledge-based economy. The FCC needs to find new ways to discharge its mandates.
Experience from complex systems theory suggests the following regulatory techniques:
Regulate through guiding principles rather than prescriptive rules
Add computer modeling and simulation to the repertoire of safe-to-fail experiments done before making regulatory choices
Delegate responsibility through the increased use of supervised self-regulation (also known as “co-regulation”)
Improve agility and responsiveness through requirements on transparency and intelligibility
Build a basis for decisions through improved data gathering and interpretation
These techniques will only bear fruit in a suitable institutional setting. The FCC should build on its existing expertise through a focus on learning and planning; depend more on its own resources to inform decisions, rather than on the submissions of interested parties; and strengthen institutional memory by planning the career arcs of professional staff, both experienced and new.
All this will require changes in the institution’s organization. The Commission should be reorganized by replacing industry-oriented bureaus by departments based on policy mandates:
Public Safety: Access to emergency services, law enforcement surveillance, data retention, and child safety.
Consumer Protection: Privacy, fraud, fair trade terms, access for those with disabilities, device certification, universal service, digital inclusion.
Culture & Values: Control of speech (obscenity, violence in media), advertising rules, state support for media production.
Markets: Allocation of resources (numbers, spectrum), market analysis, competition.
Offices that provide cross-organization services, such as OET and OSP, should be retained, since they can moderate conflict and reduce duplication.
This Comment focuses on broadband and other advanced information technologies, emphasizing the importance of distinguishing the generation of policy norms or goals for these technologies from the implementation of those norms. To supplement the reforms Professor Weiser describes in his paper, it argues thatregulators first should articulate the norms they hope to further, and thentake a breath to consider the hard institutional question of whether those norms are best furthered by the FCC, other federal agencies, the states or by private actors. Based on the FCC’s current culture, however, the Comment expresses concern that the FCC will not take time to consider this question. Accordingly, the Commentsuggests ways the FCC’s new leadership can encourage reliance on coordination with the Federal Trade Commission or on private coordination where these other institutional mechanisms may further the FCC’s goals more readilythan its own regulatory activities.
First, I fully agree with Phil Weiser’s recommendations. They are urgently needed if there is to be genuine dialogue between the FCC and the public (and astonishingly between the Commissioners), instead of the Chairman’s present ex parte decisional mode of proceeding. The proposals need no legislation and could be adopted by new Chairman/FCC. The Sunshine Act is not working at the FCC and may require legislative consideration.
Former FCC Commissioner Nicholas Johnson (1969-73) wrote some 400 opinions as a commissioner, many of which were dissents complaining of the same or similar problems as those we are discussing today. Frustrated by those who suggested he had been picking only the very worst cases, he took a different and somewhat unique approach: a law review article, “A Day in the Life,” which looked at the entire agenda for a Commission meeting day and endeavored to document that everything the Commission did that day was wrong for one reason or another. Believing the historical perspective provided by that article to be of more use today than anything he might write about the current FCC’s failings, he includes excerpts from it (the introduction and conclusion) in his paper. However, he precedes those excerpts with the suggestion that as, and perhaps more, important than the substantive suggestions we offer today may be the qualities of FCC commissioners and staff — which he itemizes — and the support those individuals are provided by the White House and Congress among others. Based on his own experience he believes that the right persons, with adequate support, can and will come up with many of the most appropriate reforms on their own.
Nicholas Johnson *
As a first step let me say that I agree with most of what is said in this paper. FCC is in desperate need of reform. It is interesting that this paper comes out around the same time as Lessig’s Newsweek article on FCC reform which takes a rather different approach. A key point where I agree more with Lessig than with Weiser is that the issue of FCC reform is vitally important to the whole economy. FCC has a broad “product line” of regulatory activities , many of which are key to economic growth in sectors beyond its classical “constituency” of telecom equipment manufacturers and service providers, licensees, and regulatees. A basic recurring problem is that FCC, like other national industry regulators, tend to get “captured” by its constituents and focus on their near term gratification. In this time of economic crisis, we should recognize that the telecom policy environment created by FCC is vital to the whole economy.
The ability of new telecom services and products to reach the market in a timely, responsible way impacts the classic FCC constituency, of course, but it also impacts other firms that are users of telecom products and services (by improving the efficiency of their operations) and creates new business opportunities that are enabled by new communications services. FCC rarely realizes that the regulatory messages it sends affect the capital markets that are key for funding new communications technology, for technology does not just arrive at the FCC’s doorstep for consideration out of some 21st century “spontaneous generation”. Technology that is mature enough for some sort of regulatory consideration requires both R&D and financial support. While all R&D is risky for the investor, transparency problems at FCC have made investment in innovative technology subject to its regulation particularly risky. Given the current credit crunch, FCC’s murky practices could divert available capital to other ventures not subject to the transparency issues at FCC and thus inhibit innovation and job formation in a wide variety of industries.
Michael J. Marcus*
Oliver Wendell Holmes Jr.’s analysis of the common law is important again. Now that administrative agencies like the FCC have become America’s common law courts,” the FCC should demonstrate the strengths of common-law reasoning: Scrutinizing the facts at hand, scrupulously applying consistent principles, fairly offering interested parties access to decision-making, and forthrightly explaining why the “felt necessities of the times” may dictate new policies. But the common-law offers more — a mechanism of governmental oversight that combines logic and rigor with flexibility and learning. In other words, at a time when innovation is the cornerstone of long-term economic growth, the 21st Century common-law is advantageous because it is itself a good way of creating innovative public policies; a sensible method of adapting government oversight to changing technological and economic conditions. The FCC, and all who are affected by it, would be advantaged by the explicit adoption of the common-law approach.
The life of the law has not been logic: it has been experience. The felt necessities of the time, the prevalent moral and political theories, intuitions of public policy, avowed or unconscious, even the prejudices which judges share with their fellow-men, have had a good deal more to do than the syllogism in determining the rules by which men should be governed…. But the most difficult labor will be to understand the combination of [history and existing theories of legislation] into new products at every stage.