WASHINGTON — Internet policy folks who style themselves as progressives have high hopes that the new administration will reverse some of the deregulatory policies that have left the media and telecom industries operate under their own devices.
Here at the Newseum, where the media-reform group Free Press held its annual “Changing Media” conference, the speakers — an almost exclusively left-leaning bunch — were replete with criticism of policies they said had led to egregious market failures.
“We are at the end of the era of deregulation,” said Tim Wu, a law professor at Columbia University and chairman of Free Press. “The ideas that powered the deregulation movement have essentially run their course.”
Supporters of a more vigorous regulatory regime criticize the Federal Communications Commission (FCC) for allowing cable and telecom companies to secure what they describe as a duopoly in the broadband service market, a policy framework that ran counter to the spirit of the 1996 Telecommunications Act.
In the world of newspapers, whose current existential crisis is a popular topic in Washington these days, those in the pro-regulatory camp wag a disappointed finger at the regulatory authorities who gave a green light to widespread media consolidation and the newspaper acquisition spree of 2006 and 2007, which saddled companies like McClatchy with staggering debts just as the bottom was about to drop out of the advertising economy.
Indeed, many individual newspapers are still operating at a profit, albeit it a declining one. But with their parent companies encumbered with so much debt, layoffs and other cuts have become an economic imperative.
Years before the current crisis, when newspapers were riding high on fat profits, critics accused their corporate parents of precipitating their own decline by thinning out newsrooms and cutting coverage to plump up their quarterly reports.
So now, with a Democratic president in office who has shown himself willing to exert far-reaching government control to correct instances of market failure in the banking and auto industries, the progressives are looking for the discussion to move toward what role government should play in nurturing industry, rather than the question of whether it should have one at all.
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“How sweet it would be to have that kind of dialogue rather than another mindless go-around and that tired old debate about regulation versus deregulation that’s so poisoned our ability to come together and reason together for so many of our recent years,” said Michael Copps, interim chairman of the FCC.
Copps is heading the agency pending the Senate confirmation of Julius Genachowski. His confirmation hearing had been scheduled for this week, but was postponed until sometime shortly after Memorial Day.
The FCC will be at the center of many of the media and tech policy debates that are now taking shape. Chief among them is the push to improve the nation’s broadband infrastructure.
The economic stimulus bill directed the FCC to develop a national broadband strategy and present it to Congress next February, a project Copps said was among the most important in the agency’s history. The agency is accepting public comments on the broadband roadmap through June 8.
Policymakers’ efforts to drive broadband deployment and adoption of high-speed Internet service seem increasingly entwined with their growing concern about the demise of newspapers.
No one seems to have a definitive answer for how to cure the economic riddle of what a sustainable business model for online journalism will look like, but if the migration to an all-digital news media is upon us, then the goal of universal broadband can begin to look like a vital part of the preserving the democratic order.
“The challenge for government as we try to wrestle with how we continue to produce quality journalism and get quality journalism to people is actually in the first instance I think a broadband question,” said Jessica Rosenworcel, a top aide to Senate Commerce Committee Chairman John Rockefeller (D-WV). “If we assume that the mode for distribution in the future will be over broadband and will be over these networks, what becomes a priority for government is making sure that everyone has access to those networks.”
One of the issues that the FCC will consider as it formulates its plan is a path to making more efficient use of wireless spectrum, a scarce resource of increasing importance as people use their mobile devices for more data-intensive applications.
“We as a country are way over invested spectrum-wise in broadcasting,” said Michael Powell, a Republican and former FCC chairman. “You really have to ask yourself why so much valuable real estate is being held back.”
There have also been calls in Congress for spectrum reform. In March, Sens. John Kerry (D-MA) and Olympia Snowe (R-ME) introduced a bill that would require the FCC and the Commerce Department’s National Telecommunications Information Administration to conduct a thorough inventory of all of the non-classified spectrum in use by the government and private sector. They described the legislation as a first step toward making more efficient use of a scarce resource they see as a backbone for the next phase of the emerging digital economy.
But with greater wireless connectivity come some of the same regulatory questions that have been kicking around the cable and wired sectors for years, such as Net neutrality. Obama has been an unequivocal supporter of the principles of openness and nondiscriminatory network management, and it is widely expected that his FCC will take a tougher stance on the issue than the agency has in the past, though it did rebuke Comcast for secretly blocking certain traffic on its network in a high-profile case last year.
In 2005, the FCC adopted four broadband operating principles, including the right for consumers to “access the lawful Internet content of their choice.” Copps has said he will push to adopt a fifth principle that would more explicitly codify the nondiscrimination requirement.
But the long-simmering Net neutrality debate, expected to be revived in Congress this year, has largely excluded the mobile Web, but that could change soon enough.
“As we as users move from the wired to the wireless world, we need that same sort of openness,” said Ram Shriram, founder of the venture capital firm Sherpalo Ventures.
In addition to wireless Net neutrality, there have also been increasing calls for the FCC to regulate the prices that AT&T, Verizon and Qwest charge smaller carriers for use of the so-called middle mile of their data networks, known as special-access fees.
