SSTLR

By Brian W. Murray

ABSTRACT:
One of the most well-known laws is one of science—for every action, there is an equal and opposite reaction. When considering recent trends in federal communications regulation, one must wonder whether the same principle is at work.

For several years, the Federal Communications Commission (“FCC”) systematically eliminated longstanding regulatory requirements that otherwise would have forced owners of broadband platforms to give competing service providers nondiscriminatory access to their networks to assure them a means of reaching customers. The general theory was that the proliferation of networks that support broadband-based services placed competitive pressure on network owners, such that they would be pleased voluntarily to provide wholesale access to their non-facilities-based competitors in order to maximize the number of customers on their networks—without any need for a regulator to tell them to do so.

The regulatory pendulum is now swinging the other way. During the last year in particular, the FCC has demonstrated a renewed fondness for using regulation to restrain the conduct of broadband service providers and network owners, this time with a specific focus on enabling consumers to access and use broadband-capable platforms to the greatest extent possible. This trend has manifested itself through the imposition of what can loosely be described as a series of consumer-oriented “access” mandates—rules that, in one way or another, are intended to restrict service providers from binding customers to, or impairing their use of, a particular network.

Individually, these newer requirements have been the subject of vigorous debate and extensive academic commentary, giving meaning and perhaps legitimacy to a collection of amorphous buzzwords that have captured the popular imagination: “open access,” “open platforms,” “open devices,” “device and applications portability,” “non-exclusivity,” and the mother of them all, “net neutrality.” The discussion below does not seek to replicate those specific arguments. Rather, its objective is more modest, but no less important: to take a step back in order to consider, from a higher level, the broader implications of this trend in the FCC’s recent decisions.

Viewed collectively, this new generation of access mandates reveals a fundamental paradox in the FCC’s approach to regulation in the broadband world. When addressing the applicability of wholesale access requirements in the broadband context, the FCC was content to rely on market forces rather than impose regulations that risk the domino effect of creating high costs that could impede investment and innovation and in turn derail the continued development of a vibrant broadband marketplace. More recently, the FCC increasingly appears willing to change course, going so far as to suggest that failing to regulate—notwithstanding the costs to broadband providers—could yield a similar outcome by denying consumers the opportunity to take full advantage of broadband competition. It is an unusual view for a Republican administration to take, made more perplexing by the fact that the FCC has applied this approach only with respect to certain providers and in certain contexts, sometimes where there is little or no evidence of a market failure that justifies intervention.

The ad hoc nature of this initiative conveys a certain ambivalence about the relative efficacy of market forces and regulation as a means of maintaining order in the broadband marketplace. But the industry can ill afford such indecision on the matter. Indeed, more is at stake than simply preserving intellectual consistency. The new generation of access mandates creates real costs that could impede the continued development of a competitive and innovative market for broadband services, an outcome that serves no one’s interests.

NOTE: Footnotes in this abstract were omitted.