FCC’s Martin Reflects on Wins, Losses

WASHINGTON — If government regulators often walk a fine line, then you might argue that Kevin Martin walked an especially thin tightrope during his time overseeing the Federal Communications Commission.

Looking back on his tenure as chairman, Martin described his role as a regulator striking a balance between allowing markets to function without government interference, and enacting targeted regulations when those markets fail.

Speaking at the American Enterprise Institute, a think tank here, Martin ticked off what he considers his major achievements, including enacting policies to encourage broadband deployment. Martin, still facing fire by Democrats over his management style, offered up some advice for his successor. First, be willing to be unpopular, he said, and don’t be afraid to make calls as you see them.

“The recent financial crisis has reminded us that the failure to act or regulate when we do identify a problem may actually lead to worse problems and the need for greater and larger government intervention in the future,” he said.

Martin made his address today as the FCC prepares for a new administration, new Congress, and a new technology agenda. President-elect Obama has yet to name a new chairman, but he is expected to call on the agency to implement policies to spur broadband deployment and enforce network neutrality.

Martin has had a controversial tenure at the FCC. As his chairmanship draws to a close, he has come under fire from lawmakers and watchdog groups for running the agency in what they describe as a secretive and almost autocratic manner.

In his remarks today, Martin conceded that his policies have not always been popular. He said he has voted with the commission’s two Democrats as often as he has been aligned with his fellow Republicans. Martin said that at one point or another, he has made decisions unpopular with each of the industries the agency regulates. But, he added, that’s the price of doing business inside the Beltway.

“In Washington, no one remembers when you agree with them, but no one forgets whenever you disagree.”

In general, Martin said he favored a hands-off approach, reserving regulation for isolated instances when a market failed to uphold the interest of consumers.

“I’ve approached our decisions with a fundamental belief that a robust competitive marketplace, not regulation, is ultimately the best protector for the public interest,” he said. “Government, however, still has an important and critical role to play. We need to create a regulatory environment that promotes investment and competition.”

As an example of consumer-friendly policies, Martin pointed to the 700 MHz spectrum auction the agency held last March.

Bowing to pressure from Google and other groups that advocate open-access networks, Martin attached a provision to the most valuable piece of spectrum in the auction requiring the winning bidder to make the resulting network interoperable with all types of devices and applications.

Verizon Wireless, which ended up winning the so-called “C block,” had sued to overturn the openness condition, but dropped its lawsuit before the bidding began.

Martin, who has previously touted the industry’s voluntary move toward open networks, said that the openness requirement in the 700 MHz auction helped set the process in motion.

“The impact of this targeted regulatory action was far-reaching,” he said. “Shortly after the FCC acted, others in the wireless industry, including Verizon, Sprint, T-Mobile and AT&T, all announced plans to adopt a more open approach.”

Next page: The WiMAX experience

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Martin pointed to Sprint’s recently approved acquisition of Clearwire, a joint venture with several other tech firms that are working toward a nationwide build-out of a 4G WiMAX network. As a condition of the merger, Sprint and Clearwire agreed to make the new network open to all applications and devices.

Martin said he took the same targeted regulatory approach when dealing with Net neutrality. After Comcast was caught surreptitiously throttling traffic to the peer-to-peer site BitTorrent, the FCC opened an inquiry into the cable giant’s network management practices. It ultimately found that Comcast had violated the Internet principles the FCC had adopted in 2005, both for selectively blocking the traffic and failing to inform its users that it was doing so.

But Martin’s order rebuking Comcast for the BitTorrent flap was well short of the hard-fisted policies regulating network management that Net neutrality advocates were hoping to see from the commission.

“As with the open-access requirements in the recent auction, we’ve taken a cautious approach with network management,” Martin said this morning. “We have dual responsibilities of preserving the vibrant open character of the Internet while retaining companies’ incentives to invest in providing faster broadband pipes to more people. So while we didn’t adopt direct burdensome regulations, we did indicate that we would enforce our principles whenever a company was interfering with consumers’ ability to access the Internet.”

Martin declined to comment on how long he plans to stay at the agency after the new administration takes office. Commissioner Deborah Taylor Tate, a Republican, stepped down last week, vacating one of the five spots at the commission.

While his own plans remain uncertain, it seems likely that Martin’s days as chairman are numbered. He rattled off a few of the most pressing items his successor will inherit, starting with the digital television transition.

For more than a year, the FCC has been partnering with broadcasters in a massive advertising blitz to ensure that no one is caught by surprise when analog signals are shut off on Feb. 17. People with older TVs who still get their signals through antennas will need to purchase a converter box for their sets to continue to work.

As part of the DTV readiness campaign, the government has been offering coupons that would take $40 off the price of the converter box, but this week, it became clear that the coupon program had run out of money. Now some members of Congress are suggesting that the transition date be pushed back to ensure that everyone who wants a converter box will be able to buy one with a coupon. Martin is concerned that pushing the date back could cause confusion among consumers, given that the FCC’s messaging has consistently focused on the Feb. 17 date. He said he would prefer to see Congress act quickly to fund the coupon program so the transition can proceed as scheduled.

Another issue awaiting the next chairman is broadband deployment. Martin touted his efforts to spur wireless broadband, including spectrum auctions and the decision to make the so-called “white spaces” available for unlicensed use.

But Martin knows that universal broadband will require more than just spectrum. He advocates a reform to the Universal Service Fund (USF), which was established to provide telephone service to rural and low-income Americans, to include broadband coverage.

“Achieving universal broadband requires us to use all the tools at our disposal,” Martin said. “I believe that starts with reforming the Universal Service program.”

His proposed reform to the USF has never come to a vote in the FCC, but there is widespread speculation that USF provisions for broadband could make their way into the economic stimulus bill or some future effort by the Obama administration to ensure that all Americans have access to affordable high-speed Internet service.

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