more on Sen. Ensign Introduces Communications Legislation That Rewrites the '96 Act - Maybe with good intent but danger lurks

[David Farber <dave () farber net>]

Begin forwarded message:

From: Patrick Ross <Pross () pff org>
Date: July 29, 2005 3:21:34 PM EDT
To: dave () farber net
Subject: RE: [IP] Sen. Ensign Introduces Communications Legislation  
That Rewrites the '96 Act - Maybe with good intent but danger lurks


My colleague Randy May wrote a short piece on Ensign's bill the other
day. Some on this list may take issue with some of Randy's conclusions,
but debate is good. It can be found here --
http://www.pff.org/issues-pubs/ps/ps1.5ensignbill.html -- and is posted
below. Dave, for length purposes you can delete the text and just send
the link if you'd like.

Patrick Ross

-----------------------------------------------------------------------

An Historic Communications Reform Landmark

Progress Snapshot
Release 1.5 July 2005

by Randolph J. May *

When Senator John Ensign, the Nevada Republican who sits on the Senate
Committee on Commerce, Science, and Transportation, dropped his new
communications bill into the Senate hopper this morning, the sound you
heard was history being made. I'm willing to stand corrected, but to my
memory, Senator Ensign's proposed "Broadband Investment and Consumer
Choice Act" is the most deregulatory, market-oriented bill ever
introduced in Congress, and commendably so. The bill is based on the
underlying premise that now, as we move full-steam ahead into the
digital age, the traditional economic regulation of most communications
services that was appropriate in a monopolistic environment is no longer
necessary. A foundational premise of the stand-alone bill is that when
marketplace competition exists, it can protect consumers better than
public-utility style regulation.

While the actual bill language will bear much closer scrutiny in the
days ahead, and while there are some caveats noted below, at first blush
the bill has many commendable features, which make it a useful marker
for examining the telecom reform bills that are anticipated to follow
shortly in the Senate and the House. Here are some positive features,
with a few of the caveats noted:

* Broadband services, regardless of technology platform, are largely
freed from federal and state regulation at both the wholesale and retail
level.

* On the sensitive subject of interconnection, broadband
facilities-based providers are required to establish "commercial
arrangements" for the purpose of direct interconnection with other
facilities based providers. Interconnection is defined narrowly as "the
physical linking of two networks for the purpose of exchanging traffic."
The bill says a failure to comply may lead to the filing of a complaint
at the FCC and in the court. Note: This is one of those points likely to
receive further attention. If the two network operators cannot reach
agreement regarding a "commercial arrangement", what is the standard
that the FCC or a court is to use to resolve the complaint? Perhaps good
faith bargaining under the circumstances, taking into the account all of
the marketplace considerations. So, while the reference to "commercial
arrangements" rather than a "just and reasonable" standard is a very
important step forward, there are ways this provision could be tightened
to reduce further the possibility of unnecessary regulation.

* With regard to interconnection of narrowband services, the FCC has six
months to develop a regulatory framework. The FCC-established framework
sunsets after five years.

* Regarding "net neutrality"-type regulation, the bill appears to allow
broadband providers to offer customized content consistent with a
customer's service agreement. While all of the implications are not
clear at this point, the bill seems to be trying to avoid adoption of a
regime that uniformly mandates a subscriber right "to access any
content, anytime" in favor of recognizing that efficiencies can result
from tailoring services. The bill also provides that broadband providers
shall not prevent the use of any connectivity device. Note: Like the
subscriber right to access content, the right to interconnect end user
equipment sounds fine in theory. But as a practical matter, there may be
sound reasons from an overall efficiency and consumer welfare point of
view for the providers, who have invested billions in building out the
networks, to retain control over the use of their facilities. This
aspect of the bill will bear more scrutiny.

* The bill removes all state and local franchise requirements for cable
and telephone (these labels soon will become archaic!) video providers.
Although the VSPs must still "compensate" the appropriate governmental
authority for use of public rights-of-way by means of a reasonable fee
based on gross revenues, the elimination of the rent-seeking associated
with the franchising process is a major step forward. And the provision
that says the VSPs are not required to build out their systems in any
particular manner makes sense as a recognition of economic reality when
we should be trying to speed the introduction of new competitive
services. Note: While the bill puts the cable and telco video providers
on the same footing, it does not really tackle the elimination of some
of the existing Title VI requirements that probably no longer make sense
into today's competitive environment. For example, the bill would
maintain program access requirements and economic and content regulation
mandates that likely are no longer necessary in today's environment.

The major caveat, of course, is that the bill does not deal at all with
the thorny issue of reforming the rapidly expanding Universal Service
system. Ultimately, reform of the US system to direct the subsidies in a
more targeted fashion to those who really need them should be part of a
more comprehensive transformation of our nation's communications policy.
When universal service is addressed, the political reality is that a
more comprehensive bill may look a lot less market-oriented that the
bill Senator Ensign has introduced.

But, for today, Senator Ensign deserves a lot of credit for laying down
a marker against which reform efforts going-forward ought to be
measured. Of course, PFF's release of a new regulatory framework as part
of our DACA project effort lays down an important marker too. When the
history of the next phase of communications reform is written, I'm sure
Senator Ensign's bill most certainly will deserve favorable mention, and
I am confident the DACA project will as well.



------------------------------------------------------------------------
--------

* Randolph May is Senior Fellow and Director of Communications Policy
Studies at The Progress & Freedom Foundation. The views expressed are
his own


-----Original Message-----
From: owner-ip () v2 listbox com [mailto:owner-ip () v2 listbox com] On Behalf
Of David Farber
Sent: Friday, July 29, 2005 3:13 PM
To: Ip ip
Subject: [IP] Sen. Ensign Introduces Communications Legislation That
Rewrites the '96 Act - Maybe with good intent but danger lurks


There was confidentiallity agreement attached as well as the
document.  Ask Bob to send you it djf


Begin forwarded message:

From: Bob Frankston <Bob19-0501 () bobf frankston com>
Date: July 28, 2005 6:58:17 PM EDT
To: David Farber <dave () farber net>
Subject: Sen. Ensign Introduces Communications Legislation That
Rewrites the '96 Act - Maybe with good intent but danger lurks


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