IP Transition Trials Shouldn’t ‘Interfere’ With Consumer Choices, O'Rielly Says
FCC Commissioner Mike O'Rielly encouraged commission restraint Monday, as he detailed his policy priorities to a Hudson Institute audience (http://bit.ly/1i4SpJ1). As commissioners prepare to vote on an order Thursday that would set procedures for proposing and evaluating IP transition trials (CD Jan 27 p7), O'Rielly cautioned that trials must not impede the innovation that’s already been happening as the telecom industry has moved to IP. He also elaborated on his vision of “economic freedom” and what it should mean to the FCC.
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"Any trials should not interfere with the choices that consumers are making every day to go with IP services,” O'Rielly said, citing a residential market that’s already 43 percent VoIP connections. “The IP transitions are well underway and the commission should not allow these trials to obstruct industry innovation or consumer adoption."
Nor should trials “serve as an excuse” for delaying the elimination of legacy regulations that have already outlived their usefulness, O'Rielly said. “Separate from the trials, I doubt that many of the old rules will be necessary going forward. We should take this opportunity to see how many regulations we can do without, such as arcane regulatory accounting and jurisdictional separations.” Any rules established in the trials should be “non-binding” on future decisions, O'Rielly said. “These trials should be exactly that: Trials, not stalking horses for new regulations."
O'Rielly criticized the decision by the U.S. Court of Appeals for the D.C. Circuit that Communications Act Section 706 gives the FCC authority over the Internet space. While working on telecom policy as a congressional staffer, O'Rielly worked specifically on Section 706, he said. That section “has been abused and it should be returned to its original intent that we helped frame years ago.” The provision is “similar to what people would refer to as congressional findings, and therefore its weight should be similar,” he said. “You also have to put in perspective of when it was written and who was writing it,” he said: Republicans controlled the House and Senate, and were concerned about the FCC’s power. Is it possible, he asked, “that we would write something that secretly gives the commission authority over the Internet, and yet we never told anybody?"
O'Rielly became the first commissioner in some time to renew calls for reform to the contribution side of the USF. “The contribution factor this quarter is already an incredible 16.4 percent and is likely to increase further in the coming years,” O'Rielly said, calling contribution reform “long overdue.” It must be addressed “in a manner that is fair for everyone -- providers, recipients, and American consumers,” he said. “And it should not be reformed in a way that dampens Internet usage or increases overall consumer costs.” O'Rielly also wants to see the Remote Areas Fund deployed, and supports FCC Chairman Tom Wheeler’s decision to revisit the quantile regression analysis benchmarks, he said.
On the broadcast spectrum incentive auction, O'Rielly urged the commission to “not implement rules designed to preordain auction results or place undue restrictions on licenses.” That might diminish participation or revenue, he said. “The commission must allow licenses to go to their highest valued use and ensure spectrum flexibility."
The commission needs to take action on media ownership, O'Rielly said. “We have failed to comply” with the congressional directive to review its media ownership rules every four years, he said. “The commission hasn’t released the 2010 order and is arguably behind on its 2014 review.” The commission should “thoughtfully” update its rules “to reflect the realities of today’s media marketplace,” he said.
Before implementing new rules or policies, the FCC must first consider whether it even has the authority to regulate, O'Rielly said. “The commission exists to implement the statute -- no less and certainly no more.” It must have “verifiable and specific evidence” of market failure, and “real harm” to consumers, before acting. When the commission does intervene, “its solution should be carefully tailored and apply only to the relevant set of providers or services,” O'Rielly said. “We must guard against over-regulating by analogy."
The benefit of regulation must outweigh the burdens, O'Rielly said. “Even when rules are grounded in the statute, based on evidence, addressing a real harm and targeted at a specific problem, there are still costs to intervening, and we must consider those costs as part of our analysis,” he said. “Costs are always passed on to consumers one way or another.” Telecom companies must be “as free as possible to meet consumer demand,” O'Rielly said, calling for consistent sunset provisions to “force the commission to make sure our rules are still relevant.”