My view from the doorstep of FCC change.

• Author: Abernathy, Kathleen

1. INTRODUCTION

   As a new commissioner at the Federal Communications Commission ("FCC" or "the Commission"), I have developed five key principles that inform my regulatory philosophy and that will serve as guideposts during my tenure at the FCC. This Article defines and gives context to those principles.

   First, Congress sets the FCC's responsibilities in the Communications Act, and the Commission should faithfully implement those tasks rather than pursuing an independent agenda. Second, fully functioning markets deliver better products and services to consumers as compared to markets regulated by the government. Unless structural factors prevent markets from being competitive, or Congress has established objectives (such as universal service) that are not market-based, government should be reluctant to intervene in the marketplace. Third, where the FCC promulgates rules, it should ensure that those rules are clear and vigorously enforced. Efficient markets depend on clear and predictable rules, and a failure to enforce rules undermines the agency's credibility and effectiveness. Fourth, a regulatory agency--particularly one with jurisdiction over a high-tech sector like communications--cannot possibly duplicate the resources and expertise of those it regulates. Therefore, the FCC must be humble about its own abilities and must reach out to consumer groups, industry, trade associations, and state regulators to maximize the information available in the decision-making process. Finally, as a government agency supported by taxpayers, the FCC should strive to provide the same degree of responsiveness and effectiveness that would be expected of an organization in the private sector.

   These principles are the product of my experiences in government and the private sector. I have previously served at the FCC as a legal advisor under two respected and dedicated commissioners, and I have worked for an array of businesses representing a broad spectrum of the communications industry, including providers of satellite, wireless, and wireline communications services. I have also served in a variety of leadership capacities for the Federal Communications Bar Association, including a term as its president.

   While I am fortunate to have learned a lot from these diverse experiences, no set of experiences can fully prepare a commissioner to address all of the complex technical and legal issues the Commission faces on a daily basis. But I am confident that, by relying on the principles discussed in this Article, I will help the Commission deliver to consumers the benefits envisioned by Congress in enacting the Communications Act. While we have many hard problems to address, I look forward to working with my fellow commissioners, the talented and hard-working agency staff, state regulators, consumers, trade associations, businesses, and the Bar to meet these challenges.

2. GUIDING PRINCIPLES

   1. The FCC Should Focus on Implementing the Agenda Set by Congress in the Statute

      The FCC is an independent agency created by Congress, and as such, its priorities are defined not by the predilections of the commissioners but by the text of the Communications Act. Like any institution, the FCC has a finite amount of resources. We should expend those resources implementing congressional priorities, and only after those are fulfilled should we pursue objectives that lie within our discretionary authority.

      Statutory language at its best provides a clear guide for the Commission's priorities. Landmark legislation like the Telecommunications Act of 1996 ("the 1996 Act" or "the Act") serves as an excellent example. In many of the Act's provisions, Congress set forth explicit timetables for the FCC's execution of statutory mandates, including a six-month deadline for implementing the market-opening duties in section 251 (1) and a two-year deadline for overhauling the universal service subsidy scheme in section 254. (2) In these sections, Congress decreed that the FCC "shall" implement specific provisions of the Act. (3) Other provisions, by contrast, state that the FCC "may" take certain actions. (4) I believe the FCC should concentrate on fulfilling specific mandates (the "shalls"), even where Congress did not impose a specific timetable for doing so, before it devotes resources to proceedings that are purely discretionary (the "mays"). And the agency should certainly address specific statutory responsibilities ("shalls" and "mays") before launching any public policy initiatives in areas where the statute is silent.

      I acknowledge that the statutory scheme dictates the FCC's priorities only to a point. That is, although the statute creates tiers of responsibilities (the "shalls," "mays," and silence), it does not often indicate which "shall" should be tackled first or with the most resources. It is in this prioritization that the Commission is required to exercise its judgment as an expert independent agency. The President has appointed each of us as commissioners--assisted by the expert staff at the Commission--to make these judgments. I am concerned that, at times, prior commissions may have viewed this discretion to prioritize among congressional mandates as a license to modify the mandates themselves.

      Indeed, the FCC has damaged its credibility and prestige on occasion by focusing on discretionary acts to the detriment of implementing statutory mandates. For example, at a time when the Commission was overwhelmed with mandatory proceedings arising from the 1996 Act, the FCC spent a considerable amount of time exploring a proposal to compel broadcast networks to provide free advertising time to political candidates. (5) Devoting resources to the pursuit of such a proposal should occur only to the extent that it does not burden or interfere with the fulfillment of Congress's express statutory directions.

      Such freelancing is particularly questionable in light of the FCC's failure in recent years to fulfill all of its statutory obligations. For example, in 1992, Congress enacted the Telephone Consumer Protection Act (TCPA), which prohibited, among other things, unsolicited faxes. (6) One does not need to be an FCC Commissioner to recognize that, for over a decade, American consumers have fought a losing battle with fax advertisers. Despite the obvious pervasiveness of the problem, it took the Commission no less than seven years to bring its first enforcement action. (7) Unsolicited faxes certainly do not grab headlines in the way free political advertising does, but that is not the standard by which we should assess the FCC's job performance. Therefore, I believe that the Commission should devote additional resources to enforce our rules prohibiting unsolicited faxes. I have been heartened by the Commission's increased enforcement efforts in this area over the past few years. (8) In addition, the FCC should step up its efforts to inform consumers of their rights under the TCPA. Only with these efforts will the Commission fulfill the statutory mandate and the prioritization inherent in the TCPA.

      I consider proposals like the push for free political ads ill-conceived not only because they divert Commission resources away from statutory priorities, but also because the FCC should be wary of adopting significant new regulations in areas where Congress has not spoken. The statute gives the FCC broad general rulemaking authority on matters that are "necessary" to the execution of its functions (e.g., section 4(i)), but this is a weak reed on which to base a major policy initiative. (9) Similarly, in the recent debate over whether to mandate "open access" to the network infrastructure of cable operators providing high-speed Internet access, some proponents of such access argued that the FCC has the requisite statutory authority under section 4(i), (10) even if the FCC lacks authority to impose such a requirement under Title II or Title VI of the TCPA. I believe that the FCC rarely, if ever, should reach out to assert authority in this manner; nor are the courts likely to bless such efforts. The FCC should exercise restraint--we should not grant ourselves the authority that a fair reading of the TCPA denies us.

   2. Fully Functioning Markets Invariably Make Better Decisions than Do Regulators

      My second core principle derives from my faith in the ability of market forces to maximize consumer welfare. Despite the noblest of intentions, government simply cannot allocate resources, punish sloth, or spur innovation as efficiently as markets. The history of our nation, and the demise of those that have adopted centrally planned economies, makes this proposition indisputable. While there is a critical role for regulation--as I discuss below, ensuring that markets are open to competition, limiting licensees' ability to impose costs on others, and achieving specific congressional objectives--we should rely on market forces in lieu of regulatory mandates wherever we can do so consistent with Congress's explicit instructions.

      1. Placing Trust in Market Forces

         Regulators should have a healthy skepticism towards any attempt to displace market forces with regulation. Therefore, in each case, I will ask: Is this regulation truly necessary? Is there a market failure? Will the burdens imposed by the proposed regulation outweigh its anticipated benefits? Will it preserve incentives for companies to innovate, and thereby deliver better services and lower prices to consumers? Would a less regulatory approach, paired with an emphasis on strict enforcement of existing rules, produce greater consumer welfare? Similarly, I will continually examine our existing regulations to ensure that the original justification for regulatory intervention remains valid.

         My experience in both the private and public sectors leads me to believe that, more often than not, the answers to these questions will indicate that prescriptive regulatory intervention in the marketplace is not warranted...