Baker Outlines Free-Market Approach to Policymaking

“All regulation imposes costs. We cannot lose sight of that fact,” Baker said. “Nearly any regulatory change the commission makes will disturb the balance of the market, maybe for better but possibly for worse.” Therefore, decisions should be “fact-based, fully considered, and reasoned. Good intentions are not enough.” The FCC “should not adopt regulations to address anecdotes where there is no fact-based evidence to persuasively demonstrate that a problem exists,” she said. “Don’t try to solve a problem until you know there is a problem to solve.”

The FCC’s role should be to promote consumer welfare, but not necessarily through “stagnant, prescriptive rules of business conduct,” Baker said. The commission should promote and coordinate industry best practices that could preclude the need for regulation, she said. The wireless industry is “highly competitive due in large part to the government’s deregulatory approach,” Baker said. As the industry grows, so will the demand for spectrum, she said. Baker has a “keen interest” in policy that promotes efficient use of spectrum, she said.

Asked whether she expected her views to clash with FCC Democrats, Baker joked that she was “voted most optimistic in [her] high school class.” If commissioners make data-driven decisions, they're less inclined to make “philosophical” ones, she said.

When making new rules, it’s important to consider objectives, look at the statute, understand history and weigh the costs and benefits, Baker said. The FCC must recognize its authority isn’t unbounded; it shouldn’t “strain the limits of our jurisdiction to fit the political pressures of the day,” she said. Also, it’s important to recognize that the commission is just one agency fitting into the “greater, broader puzzle of government.”

Getting broadband to the unserved is Baker’s highest priority at the commission, she said, saying broadband is “essential” for restoring sustainable economic growth. The commissioner said she didn’t want to “prejudge” anything that might be in the FCC’s national plan, but urged the FCC to seek policy that maintains the U.S. as a world leader in innovation. The FCC should avoid a “one-size-fits-all” plan that doesn’t consider the array of communications services and pricing structures, she said. Competition best serves consumers, she said. “But where competition doesn’t thrive or no market exists at all, the commission will likely need to step in and ensure that broadband … infrastructure gets to everyone.”

Baker declined to make an assessment of the market for special access services, which competitive companies say is broken. But “decisions need to be based on data,” she noted. “I have not yet had a chance to look at the data in that proceeding, but … looking at that philosophy you can imagine where I'd come out on that.”

The commissioner noted that rule enforcement is another key part of her job. “I thought it was going to be easy,” but upon arriving at the FCC “realized sometimes enforcement of these rules [is] not quite as clear,” she said, citing indecency as one example.

Baker applauded Chairman Julius Genachowski for creating a more transparent and participatory process within and outside of the FCC. “While I too am new to the agency, it’s obvious that there’s a new, more positive energy at the commission.”

Levin Prefers Data

It’s more important that FCC staff collect good broadband data at workshops than hear about regulatory philosophies, Levin said in an opening keynote. If the FCC doesn’t get data on who is unserved, where they are and the costs of building out and operating a network, “then you're going to get it wrong no matter what your philosophy.” The FCC is supposed to be an “expert agency,” so its decisions must be bounded by law and good economics, he said.

Philosophies can deter learning, Levin said. “My own personal experience is that when applied to the early stages of a policy process, pre-existing policies blind us to changes and prevent us from thinking anew.” And one regulatory philosophy won’t solve all broadband problems, Levin said. “That’s about as likely as an athlete being extraordinarily gifted in basketball, baseball and football. And if [basketball hall-of-famer] Michael Jordan couldn’t do two, there’s no one in the world that can be able to do three.”

The FCC still needs more specific data, Levin said. The agency has received much feedback on what’s needed in terms of deployment and adoption, but little information on how to solve the problems using existing government assets like spectrum and the Universal Service Fund, he said.

Levin clarified comments that he wants “everyone to be worried” about the broadband plan (CD Sept 3 p2), restating that he wants “everyone to be constructively worried.” Last week’s statement, which responded to a broadcaster question about spectrum, led to broadcasters, satellite providers and the Defense Department “getting very nervous,” he said. But it also resulted in some “very interesting discussions, and that’s the most important thing.”