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CONTACT: Patrick Ross
June 17, 2005
(202) 289-8928
FTC Model Proposed for FCC
First DACA Working Group Paper Released, Event June 21

WASHINGTON D.C. - In a digital era of increasingly intense competition among services and across platforms, the existing communications regulatory model based on controlling monopoly power is no longer relevant. So concludes the Regulatory Framework Working Group of The Progress & Freedom Foundation's Digital Age Communications Act. In a paper and in model legislative language released today, the group proposes a new regulatory framework for the Federal Communications Commission that is similar to that under which the Federal Trade Commission operates. The agency's actions largely would be tied to antitrust-like jurisprudential principles and would respond to instances of abuse of market power. PFF is holding a public forum on the draft document Tuesday, June 21, and speakers include Senator John Ensign (R-Nevada) and FCC Commissioner Kathleen Abernathy.

"This far-reaching and comprehensive reform would replace regulation based on techno-functional characteristics with market-oriented regulation," says Working Group Co-Chairman Randolph May, PFF senior fellow and director of communications policy. May also is Co-Chairman of DACA. "While the Working Group found merit in other approaches, such as the IP Migration Model that would eliminate public utility-style regulation of broadband services, we felt a benefit of our approach was that it would largely eliminate the elaborate web of rules and regulations that has grown up under the existing statute."

Regulation in the digital age should be based, almost exclusively, on competition law principles drawn from antitrust law and economics, the Working Group concluded. That led to the adoption of a model based on the FTC, an agency that works principally through adjudication but which does have some authority to prevent violations of the law through rulemaking authority.

The Working Group does depart from the FTC model in proposing to treat interconnection issues differently than other claimed anticompetitive abuses. "The new regulatory framework permits the Federal Communications Commission to order the interconnection of communications networks," the report says, "in situations in which markets are not adequately providing interconnection and in which the denial of interconnection would substantially harm consumer welfare." The Working Group also recognized that this paradigm shift is likely to involve transitional issues that must be resolved. "In some instances, it may not be feasible or advisable to 'flash cut' legacy regulation," they write.

"This Working Group report is a positive first step toward a full overhaul of existing communications law," says PFF President Ray Gifford, Co-Chairman of DACA. Four other Working Groups are developing proposals -- Federal/State Framework, Universal Service/Social Policy, Spectrum, and Institutional Reform -- and the work of all five when completed will be combined into a larger proposal, complete with model legislation. "We are in the midst of a digital revolution," says Gifford, "and small steps won't bring the FCC's regulatory framework into this new world. I applaud the Working Group for its bold thinking."

The public forum will be June 21 from 10 a.m. to 2 p.m. at the Hyatt Regency Capitol Hill. Ensign and Abernathy will speak on the proposal and on communications law reform. The DACA Regulatory Framework co-chairmen, May and Northwestern University Law Professor James Speta, will explain the group's findings and will hear from DACA Advisory Group members. In addition, a panel representing multiple communications industries and other interests will respond. Those attending will be free to ask questions and make suggestions.

Lunch will be served at the June 21 event. To ensure a place, those wishing to attend should register online. Questions should be addressed to Eileen Goulding at 202-289-8928 or Media should direct queries to Patrick Ross at 202-289-8928 or

The Progress & Freedom Foundation is a market-oriented think tank that studies the digital revolution and its implications for public policy. It is a 501(c)(3) research & educational organization.



The Progress & Freedom Foundation