FCC Officials Say Jurisdictional Questions Having Little Effect on Policy

"The questions about the poor fit between much of the language of the [Communications] Act and the services that we're providing today has caused a lot of legal briefing though, but it hasn’t had a big substantive outcome at the end of the day,” Schlick said. “If you ask after Comcast what are the things that you worry about, you would say disabilities access to Internet services, you would talk about Universal Service, you would talk about open Internet.” Congress addressed disabilities access and the FCC had brought industry support for direct funding of broadband under the USF, Schlick said.

"On open Internet, the commission predicted that what would happen after the open Internet rules was essentially nothing and that’s what happened,” Schlick said. “The heads of the major ISPs made clear that the rules that we adopted were not limiting their operations. They were consistent with the way they were running their businesses. Network investment is up. The app economy is thriving and the world is going on extremely nicely … while all this litigation awaits resolution.”

Schlick conceded there is an “overhang” from the legal challenges to the December 2010 net neutrality order and the FCC’s data roaming order approved in April 2011. Schlick went on to mention Verizon’s challenges in both cases, eventually mentioning the carrier directly. “Is there one company that seems to be challenging disproportionately that has the power to remove that overhang? Yes there is,” he said. “But if they don’t do that then we'll see them in court.” Schlick added, “Verizon was able to find broad authority for Universal Service support for broadband.”

"I don’t know that the Comcast decision or uncertainty about the commission’s authority had changed policy outcomes in any significant manner that I'm aware of,” Katz said. “It’s certainly something we're conscious of, and we'll see how the existing litigation goes on issues that implicate the commission’s authority.” Katz underscored the importance of what he called the FCC’s “nudge agenda,” in areas like wireless bill shock and cybersecurity, where the agency has decided to push through voluntary industry agreements rather than regulation.

The nudge agenda is “not a substitute for regulation, not a substitute for rules or adjudication, but complementary … the kind of nontraditional approach that we're going to try to do more of in the coming year,” Katz said. In several areas before the commission, voluntary agreements seemed like “the best policy outcomes, the best way to actually make a difference,” he said. Some parties asked whether questions about the FCC’s legal authority played a role in the commission’s decision to embrace voluntary solutions, he said. “I don’t think they did.”

Schlick also said his office has been given additional responsibilities as a result of the Supreme Court’s decision last June in Talk America v. Michigan Bell, “the most important case of the year for the FCC.” The court upheld the FCC’s interpretations of its prior orders as limiting the amount that incumbent Bell carriers can charge for access to the facilities used to connect competitors to their networks.

The importance of the Talk America case extends beyond the issue addressed because the Supreme Court said for the first time courts must give deference to briefs from the expert agencies, Schlick said. “This is a responsibility we take very seriously,” he said. “We have to determine when an invitation from the court comes in whether our decisions are sufficiently clear that we are able to express the view of the commission.” In the aftermath of the case, “we have a new responsibility,” he said. “Historically, we've done about two or three briefs in recent years. … In the 11 months since Talk America we did eight. Seven of those were at the invitation of a court of appeals."

Schlick highlighted the FCC’s decision to adopt a bar on further filings by one “frequent filer.” “There was one case in which the same party filed 14 applications for review for reconsideration on the same [issue],” he said. “We thought that was nuts. We issued an order barring further filings in that proceeding. I hope we don’t have to do that again.”

Schlick also emphasized the significance of how the FCC is using cost-benefit analysis in various proceedings. “I think cost-benefit analysis has been unfortunately politicized,” he said. “It has been used to suggest that any regulations that have costs are not justified. It’s not that at all.” Chairman Julius Genachowski “is a very, very strong advocate of cost-benefit analysis because it fits in with his mantra” that FCC decisions be “data driven,” Schlick said. “That’s exactly what cost-benefit analysis is.” As part of regulatory reform, “we are now implementing cost-benefit analysis in our notices of inquiry, in our [notices of proposed rulemaking], in our orders.” The FCC needs more help from industry in making accurate estimates of likely costs of proposed regulations, he said. “What we need are the assumptions, the methodologies, show the work, just like in elementary school math class,” he said. “Admit ambiguities. We're not asking for false decision. If it’s a range of $10 million to $50 million, that’s absolutely fine. Please say that."

Wireless Bureau Chief Rick Kaplan said the FCC’s recent Mobile Satellite Service S-band order and NPRM received a lot of attention around the treatment of the Dish terrestrial waiver request, but the importance of the commission’s action was bigger than the waiver decision because the FCC is addressing “how do we reform our spectrum processes.” He said the S-band proceeding is a “good model for other bands we're going to be looking at in the future, how do we really take the long view and take some of the pain out."

Kaplan also said the FCC will be looking closely at lower 700 MHz A-block encumbrances and “what can the commission to do to really free up that spectrum … to ensure that that spectrum is being used.”

Office of Engineering and Technology Chief Julius Knapp touted the work the IEEE is doing on the next-generation Wi-Fi standard. “The reason that’s important is we're moving to an increased use of Wi-Fi in almost all smartphones,” he said. The new generation will move the current average speed to several hundred Mbps, he said. “I think that’s something coming down the pike that will help improve service.” Knapp also said OET is looking at whether additional unlicensed spectrum can be made available in the 5 GHz band and at the wireless charging of consumer devices.

In the year ahead, “the commission will have no higher priority” than an incentive auction of broadcast spectrum, with a rulemaking notice likely in coming months, Katz said. “There'll be webinars, workshops and a number of outreach activities … with broadcasters, but also, increasingly, conversations with mobile carriers and others, to make sure that we're getting all the information we can,” he said.

Katz declined to discuss in depth the outlook on spectrum given that Genachowski has a major speech scheduled for Tuesday at CTIA. “Unsurprisingly, spectrum will be a big part of what he talks about,” Katz told us. “I think he'll talk about where we've been and where we're going.”