The FCC’s role in regulating the communications industry...

Litan and Hal Singer, managing director at Navigant Economics, were on the program to discuss their book, The Need for Speed: A New Framework for Telecommunications Policy for the 21st Century. There was a case for more regulation within the industry 30 years ago because of monopolies within the industry, but “times change,” Litan said. “But in a world in which now we have convergence and we have a lot more competition, there’s less need for regulation” on issues like net neutrality. The FCC’s net neutrality order is “too radical, too harsh” in dealing with possible issues of discrimination in priority delivery contracts between network providers and websites, Singer said. He argued the order should be reversed, with discrimination issues dealt with “after the fact” by administrative law judges. There is more competition in the telecom industry than when AT&T had a monopoly on telephone service, but that “doesn’t necessarily mean that there is adequate competition,” Michael Weinberg, senior staff attorney at pro-regulatory Public Knowledge, told us. “If that’s your bar, then all sorts of things are going to look competitive. It is more competitive than an absolute monopoly, but I don’t think that means it’s adequately competitive.” While Litan and Singer are critical of the FCC in The Need for Speed, they note that the commission is only carrying out Congress’s instructions, Singer said. “The direction is going to have to come from Congress in recognition of the new landscape,” he said. Congress needs to reduce the FCC’s merger review authority within the wireless industry, Singer said. Since the FTC and Department of Justice’s Antitrust Division already examine those mergers for antitrust issues, “what is the FCC doing in this second, duplicative review?” he said. The FCC is then in a position to “give away things to the competitors who complain the loudest about a particular merger,” Singer said. “So long as you vest the agency with that kind of power, to move around millions or billions of dollars to special interests, you are going to get hordes of lobbyists walking around the halls of the agency looking for handouts.” The FCC should have a role in reviewing mergers within the wireless industry because of its expertise within the space, but “shouldn’t have a supplemental vote,” he said. Congress gave the FCC merger review authority under a public interest standard, which is important but different from the antitrust issue, Weinberg said. Public Knowledge has “been concerned in the past about the FCC’s interest in following through with enforcement of its merger conditions,” he said. “But that doesn’t necessarily mean that the FCC shouldn’t have a role in mergers or that there’s absolutely no situation in which conditions make sense.”