The FCC giveth and the FCC taketh away
When we consider the history of sweeping
government regulations that made a direct, personal impact on the day-to-day
lives of virtually everyone in America, the 1996 Telecommunications Act can hold
its own against all contenders. With the explosion of cable and digital products
in the three decades after the Supreme Court sided with the Federal
Communications Commission in U.S. v.
Southwestern Cable (1968), arguably nothing changed our society more than technological
advancements in the delivery of news, information and entertainment.
Government regulators struggled to
keep pace with those advancements, which brought businesses to fore that were
unimaginable a few years earlier, not to mention way back when the 1934 Communications
Act created the FCC to oversee the telephone, telegraph and radio industries. More
than 60 later, federal legislators took a figurative sledgehammer to the FCC’s industries,
which had grown to include broadcast, cable, satellite and digital sectors. “In
passing the (“1996 Act”), Congress took radical steps to restructure U.S.
telecommunications markets” (Economides, 1998) .
The overall goal of the Telcom Act
was straightforward: “to allow any media company to compete in terms of
offering customers subscription-based telephone, television and Internet
services” (Caristi & Davie, 2018, p. 402) . Additionally, the
Act included provision that protected Internet service providers from liability
based on third-party content. But the so-called “information superhighway,” and
the public’s access to it, commanded the lion’s share of regulators’ attention.
Telecommunications had in grown
large and unanticipated ways, creating much for legislators to grapple with.
One of the primary tasks was sorting the various ways companies offered news,
information and entertainment. The Act put electronic media in several
different categories, including radio & TV, cable, telephone, and online. There
was a lot to untangle, especially complicated rules and definitions for Multichannel
Video Program Distributors and Online Video Delivery distributors.
Telephone companies were among the Act’s
major beneficiaries, granted the right to offer traditional video services
through wired or wireless delivery systems and compete in the arena of new
media. Telephone companies also were no longer restricted from cable ownership,
free to do business as a traditional “common carrier” or a wireless provider.
The law was not without its
critics, though, who argued that politics softened its impact and created
detrimental effects on the industry. “In many ways, the Telecom Act failed to
serve the public and did not deliver on its promises of more competition, more
diversity, lower prices, more jobs and a booming economy,” Common Cause said in
a 2005 report. “Instead, the public got more media concentration, less
diversity and higher prices” (McCabe, 2016) .
It would not be the first FCC
effort that failed to work as intended. A prime example is the Fairness
Doctrine, which “evolved from a rule against broadcast editorials in 1949, but
challenged both the government and broadcasters in terms of its enforcement for
decades before it was abandoned” (Caristi & Davie, 2018, p. 455) . It aimed to ensure
that broadcasters gave time to important controversial issues and also air
opinions on both sides of an issue. The mandate faced several challenges on its
constitutionality after the Supreme Court ruled in its favor in Red Lion Broadcasting Co., Inc. v. Federal
Communications Commission (1969). Broadcasters subsequently began attaining
more free speech rights until the FCC revoked the doctrine in 1987.
The FCC found itself at the center
of a controversial issue in December 2017, when it revoked rules on so-called net
neutrality. In actuality, however, the issue appears controversial only in terms
of consumers versus Internet service providers, or put another way, the public’s
best interests versus corporate interests.
“If I had 101 calls, a hundred of
them would say absolutely preserve Net Neutrality,” said Sen. Jeff Merkley, a
Democrat who represents Oregon. “And then there’d be the one phone call saying,
‘we love what the FCC is doing to enrich the ISPs’” (Kelly, 2018) .
With the repeal of principles that called for open access, the stage is set for
a day when “what you can see on the internet, along with the quality of your
connection, are at risk of falling victim to the profit-seeking whims of
powerful telecommunications giants” (ACLU, 2017) .
Water always seeks the lowest level
and corporations typically seek the highest profits. And making sure that
high-speed Internet is available to all – especially in rural areas – is not a
great way to make a money. For instance, installing a mile of fiber-optic line
that reaches hundreds of city dwellers costs the same as a mile of fiber-optic that
reaches four country homes. ISPs have little incentive to ensure universal
access unless they’re prodded by the government. “Pricing for rural broadband
is prohibitive in rural locations. Either the cost is high due to low density
of subscribers, or there must be some form of subsidy” (Caristi & Davie, 2018, p. 422) .
The FCC responded to critics by
adopting the tried-and-untrue “trickle down” position. Chairman Ajit Pai said
the repeal would eventually benefit the public. “We’re helping consumers and
promoting competition,” he said. “Broadband providers will have more incentive
to build networks, especially to underserved areas” (King, 2017) .
More likely, they will have an irresistible temptation to pocket savings and
satisfy stockholders, similar to corporate entities that are supposed to use their
massive tax cuts to boost the economy but never do.
Human nature – and the history of
corporate behavior – suggests that cable and telecom groups will put themselves
first, second and third, while everyone else comes last. So, Verizon will be
inclined to favor subsidiaries Yahoo and AOL, while blocking or overcharging competitors
like Google. Such conduct was forbidden under the Obama-era rules, but now it
is perfectly acceptable as long as Verizon discloses it (Fung, 2017).
Before long, the repeal’s effects
should become evident, and there will be no surprise who comes out on the short
end. A recent study of European Union countries with zero-rating data usage programs
– that were prohibited here under net neutrality – show higher costs for
wireless data and anti-competitive effects. “Based on the evidence, zero rating
not serves as a means to enhance ISPs’ power over the Internet, but it’s also
how they charge consumers more money for wireless service” (Falcon, 2019) .
You mean the less regulation of
major ISPs will play out poorly for consumers and nicely for the companies?
Shocking!
References
ACLU. (2017, December). What is Net Neutrality.
Retrieved from ALCU: https://www.aclu.org/issues/free-speech/internet-speech/what-net-neutrality
Caristi, D., & Davie, W. R. (2018). Communication Law:
Practicial Applications in the Digital Age. New York: Routledge.
Economides, N. (1998, September). The Telecommunications
Act of 1996 and its Impact. Retrieved from Nicholas Economides - Economics
of Networks: https://www.stern.nyu.edu/networks/telco96.html
Falcon, E. (2019, February 5). Countries With Zeor Rating
Have More Expensive Wireless Broadband Than Countries Without It. Retrieved
from Electronic Frontier Foundation:
https://www.eff.org/deeplinks/2019/02/countries-zero-rating-have-more-expensive-wireless-broadband-countries-without-it
Fung, B. (2017, December 14). The FCC just voted to repeal
its net neutrality rules, in a sweeping act of deregulation. Retrieved from
The Washington Post:
https://www.washingtonpost.com/news/the-switch/wp/2017/12/14/the-fcc-is-expected-to-repeal-its-net-neutrality-rules-today-in-a-sweeping-act-of-deregulation/?utm_term=.b634c6e9e9c3
Kelly, M. B. (2018, June 15). The Net Neutrality Debate Is
Not Over Yet. Retrieved from 90.9 WBUR:
https://www.wbur.org/endlessthread/2018/06/15/still-breaking-reddit-net-neutrality
King, C. (2017, December 14). F.C.C. Repeals Net
Neutrality Rules. Retrieved from The New York Times:
https://www.nytimes.com/2017/12/14/technology/net-neutrality-repeal-vote.html
McCabe, D. (2016, February 7). Bill Clinton's telecom law:
Twenty years later. Retrieved from The Hill:
https://thehill.com/policy/technology/268459-bill-clintons-telecom-law-twenty-years-later
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