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An FCC Legacy--Confusion, Unpredictability and Uncertainty

Network neutrality regulations (remember that issue seemingly lost amidst merger proposals and spectrum deals) have now been in effect for nearly three months. These regulations force Internet service providers to disclose what they are doing and how they successfully manage their networks, or in other words, the regulations require disclosure of what could be the competitive advantages of their operations. 

FCC Chairman Julius Genachowski chose to address these new regulations on the Internet at the Consumer Electronics Show (CES) last month asserting after only three months, without citing any evidence, that investment in broadband has not slowed. He went further, actually claiming that he achieved his goal of increasing broadband investment–again, without providing any proof. 

But that was not his most audacious comments.  

As the Internet regulations went into effect Verizon, and MetroPCS joining later, filed a lawsuit challenging them, and challenging whether the FCC has the authority to regulate the Internet. The chairman’s response at CES was that the lawsuit was “distracting” and asserted it would create confusion, unpredictability and uncertainty–essentially saying, that people defending their rights were an annoyance. 

As to the confusion, he might be right, and he is in a position to know. 

Over his three years at the FCC, an ongoing roll of new regulations, games with data (or more typically just ignoring it) and outright unscrupulous maneuvers (such as releasing the unapproved unreviewed staff draft report detailing the staff’s objections to the AT&T-T-Mobile merger proposal, all with the intention to bust up the deal as it was being reviewed by the Justice Department) has been the new normal.

 Bad acts, subjective regulations on only certain players in a market space, fact avoidance–all but the definition of confusion, unpredictability and uncertainty. A better strategy to cause investment to flee could hardly be devised, and with it the jobs and government revenue that could have been generated. 

In the same talk at CES, the chairman said that this year the FCC needed to focus on wireless spectrum and broadband, and noted that the agency has much work to do in 2012. Given recent history, that sounds distracting, and will create confusion, unpredictability and uncertainty in the marketplace.