Administration Official Sees Possible USDS Consulting Role Over USF

The idea came from summit audience member John Windhausen, executive director of the Schools, Health & Libraries Broadband Coalition. He wondered about USDS taking a look at USF's operations and efficiency. “It’s a great idea,” Shelanski replied, saying he would bring it to the head of USDS. Officials at USDS are "busy getting the federal government itself modernized” but it would be helpful for such a relationship to develop down the road, he said.

Shelanski said his role doesn't typically involve telecom regulations due to the FCC's independence. “I speak with some detachment about things related to telecommunications but also in the parlance of government, some humility,” he said.

A “complex set of challenges” faces telecom, Shelanski said, saying competition policy will be a key factor in how to spur that sector. “You tended to get faster deployment with more firms in the market,” he said. He backed an oligarchical market structure, and said the antitrust policy framed in DOJ and FTC guidelines “may be well tuned” in the balance of fostering innovation and deployment. Windhausen, in a later question, considered the oligopoly consideration in the context of the U.S. wireless market and considered what that would mean for 5G deployment. Shelanski agreed that “we have a wireless industry that sort of fits that model” and wondered at the merits and pitfalls of carriers building different infrastructures.

CoBank Vice President-Government Affairs Sarah Tyree asked Shelanski about the “lack of financial incentive for any private company to deploy broadband in high-cost rural areas” and the role of USF and Connect America funding: “Where do you see this moving forward in the future and what do you think the next steps are?” Shelanski said sometimes, demand-side incentives “just aren’t there” and it may require a broader look at the regulatory system. He wondered about the use of public infrastructure when necessary. “It’s hard for me to imagine a future in which that problem does not get solved,” Shelanski said.

But “the antitrust laws are limited” and the administration has taken other steps on competition policy through President Barack Obama’s executive orders, Shelanski said. He cited Obama's April order on competition policy, which told agencies to “look hard at what authorities they have to get rid of regulations that might unintendedly have the effect of preserving incumbents and not opening up the door to competition” and to look at what regulations they can issue to help competition. It’s a “much easier ask” to get agencies to consider what rules to nix, he said. “But the executive order certainly looks at both.” He said the order applies to the FCC, too, with the “most well-known” aspect being the “current debate before the commission over the set-top box market, over which I will not say more.” He also cited net neutrality and wondered at a successor in his administration role evaluating those regulations many years down the line.

AT&T Assistant Vice President Rich Clarke asked about the administration's “initial focus” being one of “rounding up the usual suspects,” the regulated entities. Clarke said some others -- such as software or semiconductors -- face less regulation. “The executive order is really in some ways a first step,” working within existing parameters, Shelanski agreed. He posited future regulatory structures for these other unregulated spheres with an eye toward competitiveness.

Shelanski also cautioned against technologically based standards in regulation and noted the shift toward performance metrics. “We have to move even beyond performance standards,” he said. “Can we start structuring regulation to create rewards? … What’s the stick we would put in place? … How punitive should we be?” He said this will be important as the FCC regulates, and digital tech “is something that comes up all over the place.” He anticipated huge demand for cybersecurity technology, with “enormous places to go” and “a massive area of investment,” with “security built in as part of infrastructure from the ground up.”

Will Rinehart, director-technology and innovation policy at the American Action Forum, asked Shelanski how to define innovation. “Every metric of innovation you can come up with is imperfect,” Shelanski replied. “It’s a hard thing to get a handle on.” Look at the baseline of all kinds of metrics and how they changed once the regulation is in place, he said.