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CONTACT: Amy Smorodin
October 14 , 2005
(202) 289-8928

Brand X v. FCC : What's Next?

PFF Releases Transcript of Congressional Seminar

WASHINGTON D.C. - On July 15th, The Progress & Freedom Foundation held a Congressional Seminar on the Brand X decision. The decision, handed down by the Supreme Court this past June, confirmed the FCC classification of cable broadband service as an information service. The decision has far reaching implications and impacts the thinking about the telecom legislation currently being considered in the U.S. Senate and House of Representatives. The Progress & Freedom Foundation is releasing a transcript of the event, "Brand X v. FCC: What's Next?".  

Randolph May, Senior Fellow and Director of Communications Policy Studies at PFF, served as moderator of the event. In releasing the transcript, May said: "This seminar took place only two weeks after the Supreme Court decided the all-important Brand X decision. The transcript constitutes a valuable resource, a record of 'instant reaction' from representatives of those entities with most at stake-- independent ISPs, cable companies, telephone companies, and the FCC. But, more importantly, it provides insights from knowledgeable experts as to what may lie ahead at the FCC and on the Hill for communications law and policy in Brand X's wake. And, for pure administrative law aficianados, there is even a good discussion concerning the deference due agencies by courts under the Chevron doctrine."

As witnessed by these brief excerpts, the panel members expressed distinct views on how the ruling would affect future law and policy. David Baker, Earthlink's Vice President for Law and Public Policy, questioned the need for changes in the Communications Act: "So before we head off to a Telecom Act rewrite we must ask: 'What really is broken and what exactly needs fixing here?' We have almost total ubiquitous broadband deployment, increasing adoption rates, and in addition, it is becoming increasingly affordable to consumers." Peter Davidson, Senior Vice President of the Federal Government Relations for Verizon, identified a need for a national broadband policy, but cautioned against providing anticipatory regulation in a Telecom Act rewrite: "Brand X is also a reminder that we need a policy framework for the broadband world. We need a national policy particularly for broadband and wireless. The '96 Act has no title for broadband. Consumers do not see any distinction between different platforms delivering broadband services. As an interstate service, it needs regulation on a national basis. So we must recognize that competition and choice are the best protection for consumers in today's market. We do not need anticipatory regulation in broadband." Kyle McSlarrow, President and CEO of the National Cable & Telecommunications Association, referred to the need for equitable treatment of broadband services. McSlarrow stated: "What we need is a level playing field. If we're going to make [level playing arguments] in the broadband space, they should apply equally to the video space. The one thing I think we have agreement on is that whether it is voice, video, or data, these companies will probably be competing against each other in the future. We should not kid ourselves thinking that any one industry needs a leg up on the others."

The discussion panel also included representatives from the Federal Communications Commission. Michelle Carey, Chairman Martin's Legal Advisor on Wireline Issues, outlined the FCC's current policy agenda concerning broadband, explaining: "The Chairman thinks we need to do more and he thinks we need to level the playing field. It is not sufficient when you have two competitors in the market with one of them having to obligations to pay Universal Service when the other one does not. So he is very focused on trying to level the playing field by putting providers on equal footing." John Rogovin, former General Counsel of the FCC, praised the Court's application of the Chevron deference in the Brand X case: "I also think without the kind of Chevron deference that the Supreme Court showed, it is very difficult for the agency to do its work.. I also think it is bad for political accountability. There is a piece of the Chevron case that doesn't get a whole lot of notice, which is about political accountability. If decisions must be made which are so deeply grounded in policy questions, wouldn't you rather to have an agency somewhat accountable to the political process be making the decisions as opposed to judges?"

Related to Brand X's focus on the differential regulatory treatment under the current Telecom Act of services that compete directly against each other in the marketplace, 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, in which regulatory treatment is premised on techno-functional constructs, no longer makes sense and should be replaced with a new competition-based, technology-neutral law.

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.



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