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CONTACT: Amy Smorodin
October 4 , 2005
(202) 289-8928
DACA Forum Proposed Market-Oriented Model
PFF Releases Transcript from June 21st Event

WASHINGTON D.C. - In a digital era of increased competition among services and across platforms, the existing communications regulatory model based on controlling monopoly power is no longer relevant. On June 17th, The Progress & Freedom Foundation hosted a public workshop to discuss the proposed model legislative language and background report drafted by the Digital Age Communication Act (DACA) Regulatory Framework Working Group. Today, The Progress and Freedom Foundation is releasing a transcript of the event. The working group proposed a new framework for the Federal Communications Commission that is similar to the market-oriented framework under which the Federal Trade Commission operates. The agency's regulatory actions largely would be tied to competition-based jurisprudential principles, and the Commission would rely heavily on ex post adjudication, rather than anticipatory rulemakings, to respond to claims of market power abuses.

Randolph May, PFF Senior Fellow and Director of Communications Policy Studies, and Co-Chair of the Regulatory Framework Working Group, stated: "With the renewed attention focused on legislative reform proposals resulting from the release of the House Commerce Committee discussion draft, this transcript of the conference at which PFF unveiled its DACA proposal for a new market-oriented, technology neutral regulatory framework is very timely indeed. In reviewing the transcript, I was particularly pleased by the generally positive reaction to the proposal by our keynote speakers, as well as the other conference participants."

In his keynote address, Senator John Ensign, Chairman of the Senate Commerce Subcommittee on Technology, Innovation and Competitiveness, stressed the importance of avoiding anticipatory regulation in drafting a new telecom Act. And Ensign explained, "The bottom line as we go forward it this: We have to understand what technology is doing to our marketplace. We have to have a marketplace and regulatory scheme that reflects not only current technology but allows technology to be developed into the future. [The regulatory scheme] must be [one] where the government is not picking the winners and losers, where we are technology neutral, where we are requiring that there is interconnectivity, and where people cannot monopolize parts of the communications world."

During his address, Rep. Chip Pickering, Vice Chairman of the House Energy and Commerce Committee, challenged Congress to work towards a transition to a deregulatory communications environment. Rep. Pickering said, PFF "has laid out a proposal to get to a deregulated situation where we are guided more by the free hand of the market, competition, and antitrust review. The question is, are we ready for that type of proposal yet?"

FCC Commissioner Kathleen Abernathy also praised the DACA Working Group report for its suggestion of an alternative regulatory model, "I want to congratulate Progress & Freedom and its Regulatory Framework Working Group for producing a paper that challenges all those interested in rewriting the Act to think outside the box. I think we have to get uncomfortable. We have to walk away from the comfort zone of our traditional, regulatory framework."

In conjunction with the release of the transcript, James Speta, Co-Chair of the Regulatory Working Group, acknowledged the public feedback received during the forum. Speta stated, " The highly substantive reactions and criticisms from a diverse set of commenters and audience members all contribute to the healthy debate that will lead to meaningful reform."

Also timely in light of the transcript's release and the heightened interest in communications reform legislation, May has just published an article entitled "Replacing Stovepipes" in the most recent edition of the Cato Institute's Regulation magazine. In the article, May explains why the current act built on techno-functional constructs that lead to metaphysical regulatory distinctions no longer make sense and should be replaced with a new competition-based, technology-neutral law.

PFF launched DACA in February with the intent of providing guidance for regulators and legislators on how to address regulatory issues in an era of competing digital services and platforms. DACA consists of dozens of individuals, including PFF fellows, scholars at other think tanks and universities, and public policy officials from the last five presidential administrations. There are five working groups -- Regulatory Framework, Federal/State Framework, Universal Service/Social Policy, Spectrum Policy, and Institutional Reform. The second in the series of proposals is expected to be released later this month.

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