FCC needs thick skin to weather its moment in sun

May 14, 2014

By Daniel Indiviglio and Robert Cyran
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

The U.S. Federal Communications Commission will need thick skin to weather its moment in the sun. The usually low-profile telecom watchdog is tackling flashy issues involving mergers, internet neutrality and wireless spectrum. Resolving them won’t be easy, given the agency’s mandate to spark competition while also promoting efficiency and consumer choice. Current commissioners seem up to the challenge.

Chairman Tom Wheeler, a former lobbyist and telecommunications entrepreneur, leads the panel of three Democrats and two Republicans. Their experience as lawyers and legislative aides and with state regulation should help in navigating a long list of politically and technically difficult tasks.

At the top is deciding whether communications conglomerate Comcast’s $45 billion merger with Time Warner Cable serves the public interest. The commissioners must also determine how much wireless spectrum the likes of AT&T and Verizon can buy, strike a compromise on giving content providers equal access to the internet and find ways of freeing television broadcast spectrum for other uses.

The job is complicated by the industry’s fundamental economics. Communications companies deliver large and increasing returns to scale. Big firms have the money to build complex and efficient networks quickly but can also get lazy and act as monopolists. The Republican commissioners generally prefer to promote development by allowing companies free rein, while the Democrats tend to encourage competition by, say, limiting spectrum ownership and requiring net neutrality.

So far the FCC seems to have split the difference. Consider its net neutrality proposal. The commission wants broadband providers to earn enough money to invest in infrastructure but not to gouge the public or content providers or diminish consumer choice. So the proposal would allow broadband firms to pay more for moving some data faster but give commissioners power to overturn any deal not in consumers’ interest.

The agency is seeking public comment and could still decide to ban such payments or even tightly regulate broadband providers as common carriers.

It has taken months of policy revisions to get this far, and more tweaks are coming. That shows pragmatism rather than weakness, but the FCC will have to put its foot down at some point. And with a newly high profile, it can’t avoid stepping on some toes.

Comments

Their proposal will DECREASE competition by blocking any that do not have deep pockets to pay for any but the slowest pipes.

The internet belongs to the American people — NOT Comcast or Verizon or any of the carriers.

It is time that it be declared what it is:
… a utility that shows equality to ALL!

And, Breakingview Editors: it does not take “thick skin” to provide hand outs to your business buddies — especially if others are paying the bill for you.

Posted by GeorgeBMac | Report as abusive
 

The commission should be very interested in promoting competition in controlling the allocation of bandwidth. If they are smart they won’t try to control content or play tax games but just promote competition. That is the only way to effectively protect the consumer and affect fair use of a limited resource.

Posted by gregio | Report as abusive
 

There is no way any deal can be in the consumers interest. Bandwidth is a zero sum game, you give to one person you take from another. Just plain selling out to big business here at the expense of small business and pretty much everyone else on the internet except users of major sites. This will create significant barriers to entry for any potential challengers to these firms because you’ll need existing capital to purchase access that doesn’t suck.

Posted by Schmobbyist | Report as abusive
 

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