Updating the 1996 Communications Act
February 5, 2014
I graduated from Harvard Business School in 1997, and despite my many classmates who went into finance and consulting, I had the exciting opportunity to work at the FCC in the International Bureau on Internet policy issues. I knew immediately Internet technology was a different beast from the telephones based on the old copper lines. I had the privilege of meeting with foreign regulators around the globe. Some, I observed, intended to try and treat the Internet the same as telephones, which didn’t sit well with me. Domestically, I saw policymakers struggle with its regulatory status.
Therefore, I was happy to see this past December that House Energy and Commerce Committee Chairman Fred Upton (R-MI) and Communications and Technology Subcommittee Chairman Greg Walden (R-OR) announced a farseeing plan to evaluate and modernize the 1996 Communications Act.
Even though it’s been 17 years since passage of the Communications Act, the committee’s clarion call for the need to harmonize the existing law with today’s fast-evolving Internet marketplace reflects a serious effort to close the gap.
While this call to action didn’t make huge headlines, it still is very significant. Not only will it shine light on the important need to examine the 1996 Communications Act, it will force Congress to put the “pedal to the metal.” The committee’s actions, in the end, could lead to comprehensive overhaul of the 1996 Communications Act.
The House Energy and Commerce Committee’s bottom-line goal is to make sure the Internet remains an unbridled positive force in our economy that thrives, rather than withers, because of outdated legal and regulatory impediments.
At the announcement, Upton underscored, “Throughout the recent economic downturn and recovery, the communications and technology sectors have remained stalwarts of our national economy…We must ensure that our laws make sense for today but are also ready for the innovations of tomorrow.”
In 1996, no one in their wildest dreams could have imagined the cutting-edge and innovative creations produced by the Internet. The first law for telephones was originally written during the 1930s and last reformed when a 56 kilobits per second dial-up modem was considered high tech. “The Communications Act is now painfully out of date,” said Walden.
The committee spelled out a multi-year period it believes is necessary to update the law for the dynamic Internet era. The committee’s process is meticulous: it involves hearings, a series of white papers, and the use of digital media.
The white paper series strives to grasp where the law no longer is working well and to examine how digital technology can improve innovation, consumer choice, and the economy.
The first white paper was released the second week of January 2014, focusing on broad concepts to bring the Communications Act up-to-date. To jump start activity, the white paper encapsulated a review of the statutes; the status of current law along with criticism of it; and a host of questions for the stakeholders.
The next week on January 14, Walden’s committee held a hearing with former FCC chairmen to get the ball rolling.
Former Chairman Richard Wiley, an active player in the telecommunications field for decades, said history has convinced him that innovation is sparked when the Commission applies a light regulatory touch.
Wiley advised that Congress should not “legislate premised on the current state of the marketplace or even on predictions of what it may look like in the future.” Instead, Congress should push for a nimble and technologically-neutral framework that can adjust readily to new technological inventions.
Former Chairman Michael Powell echoed that Congress needs to adopt a regulatory approach that relies on “simplicity” to allow innovation to blossom. In his visionary outlook, Powell suggested several concepts that the market demands: more flexibility; less rigid rules; a promise that any government intervention will be technology-neutral; and a more optimal climate for investment.
Powell stressed that perennial debates about “constructs” like “regulation and deregulation; free markets versus industrial policy; and competition and monopoly” are really not helpful.
The plan did have some opposition. Former Chairman Reed showed up to say that “Congress does not need to pass a new law” in order for the FCC to address critical issues such as maintaining its leadership in creating an atmosphere for technology. While Congress may need to step in if the FCC bungles, Hundt believes “government mistakes are outweighed by its successes.” The FCC as expert agency doesn’t need a new law, he concluded.
Chairman Walden wrapped up the hearing by saying that neither his committee nor the former FCC chairmen who testified can predict what is in store for our future and what this technological revolution will lead to.
Walden acknowledged that by looking to our past, we can learn lessons about today’s Internet. First and foremost, Walden highlighted, we should direct our efforts to legal and regulatory reforms that will foment innovation and competition, expand consumer choices, and deliver the best services.
The House Energy and Commerce Committee will keep its eyes on the prize as it goes forward with its process. The leadership wants to legislate comprehensive reform of the 1996 Communications Act in order that American consumers and businesses can reap the amazing benefits of Internet technology.
The Committee’s in-depth plan will get to the bottom of it.
Helen Domenici is a senior associate with the Strategic Technologies Program at the Center for Strategic and International Studies in Washington D.C.
Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).
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