May 2011

21st-Century Regulation: An Update on the President's Reforms

[Commentary] A 21st-century regulatory system must promote economic growth, innovation and job creation while also protecting public health and welfare.

Earlier this year, President Obama outlined his plan to create such a system by adopting a simpler, smarter and more cost-effective approach to regulation. As a key part of that plan, he called for an unprecedented government-wide review of regulations already on the books so that we can improve or remove those that are out-of-date, unnecessary, excessively burdensome or in conflict with other rules. Over the past four months, government agencies and departments have combed through their rules, listened carefully to the public, and developed plans to identify what works and what doesn't.

The results of this review are in. Today, 30 agencies are laying out regulatory reforms that will save private-sector dollars and unlock economic growth by eliminating unjustified regulations, including what the president has called "absurd and unnecessary paperwork requirements that waste time and money." We are taking immediate steps to save individuals, businesses, and state and local governments hundreds of millions of dollars every year in regulatory burdens. The reforms have the potential to save billions of dollars more over time while maintaining critical health and safety protections for the American people. The reform plans being released today are a defining moment in that effort. They will not only yield significant savings for individuals and businesses, but they will also help us strike the right balance, protecting the public from serious harms even as we eliminate rules that just don't make sense.

[Sunstein is administrator of the Office of Information and Regulatory Affairs, which is part of the White House's Office of Management and Budget.]

As world burns, G8 leaders fiddle ... with the Internet. Seriously?

[Commentary] President Obama will join other G8 leaders today at the posh, French seaside resort of Deauville. On the agenda: proposed global regulations for the Internet, post-tsunami Japan, and military escapades in North Africa. Bizarrely absent from the top priorities listed by hosting head of state Nicolas Sarkozy is the most urgent issue of all: the need to rein in massive government over-spending and debt.

Certainly, improving information infrastructure, technology, and access is integral to the development of modern economies. But letting governments control or even censor information is counterproductive. Unfortunately, Sarkozy’s G8 proposal toes the statist line. He wants governments to intervene in cyberspace markets with intrusive regulation and taxes that could limit consumer choices and seriously distort both pricing and investment decisions. A micromanaging G8 also could threaten press freedom. New media Internet outlets can be invaluable in exposing political corruption and guarding against bribery, extortion, nepotism, cronyism, patronage, embezzlement, and graft. Yet disturbing acts of censorship, attacks on press freedom, and denials of Internet service are on the rise. The World Bank reports that bloggers in Burma, Iran, Syria, Cuba, Saudi Arabia, Vietnam, Tunisia, China, Turkmenistan, and Egypt are harassed and sometimes imprisoned. Scarcity of information resources and government censorship of the Internet work against people in developing nations who thirst for economic freedom, growth, and prosperity. But even that’s too big a problem for today’s G8 to address.

Why it is right to fight web pirates

[Commentary] It was probably inevitable that when Nicolas Sarkozy invited the leaders of the world’s biggest technology companies and high representatives of Silicon Valley to Paris to mull over the future of the Internet, a culture war would break out.

At one extreme was the French president, who has backed one of the strictest anti-piracy enforcement laws of any country. At the other end were activists and open source advocates such as John Perry Barlow of the Electronic Frontier Foundation and Yochai Benkler, a Harvard law professor, warning governments to back off. The Internet was not broken now, they said, but efforts to protect publishers, film and music companies could break it. The truth, inevitably, lies in the middle but the president is right about one thing. It is jejune to treat copyright enforcement as a breach of human rights, ethically equivalent to cracking down on free speech in China or the Middle East. Governments need to tread lightly to avoid damaging innovation but the Internet cannot become a safe harbor for illegality.

FCC slow to publish network neutrality rules

Opponents itching to upend the Federal Communications Commission’s controversial network neutrality rules can forget about doing so anytime soon.

The FCC adopted the controversial net neutrality order five months ago — and it may be another five months before the rules are published in the Federal Register. The delay, say FCC officials, has to do with the sheer complexity of implementing the order. But until the rules are officially published, Congress can't pass legislation to overturn the regulations, and opponents can't challenge the rules in court. The unusually long turnaround — typically FCC rules are published in the Federal Register within a few months — is fueling speculation about what’s taking so long. The net neutrality rules require carriers to reveal very specific data about broadband performance — disclosure that will involve extensive and time-consuming filings with the FCC. Moreover, details of what broadband providers will have to disclose aren't entirely clear. The back-and-forth between FCC officials and broadband carriers to clear up the paperwork requirements could keep the rules from final publication until sometime this fall. “The FCC is trying to cut a deal with the carriers on what would make for effective transparency disclosures,” an industry observer said.

Wireless merger: Too big to sell?

Congress ultimately won't have a formal say in AT&T's proposed purchase of T-Mobile. That falls to the Department of Justice and the Federal Communications Commission, which are reviewing the deal’s potential impact on consumers and competitors.

A few antitrust experts told reporters this week that they've conducted their own review, and they would urge regulators to block the deal. “We think it is anti-competitive on its face,” said Richard Brunell, director of legal advocacy at the American Antitrust Institute, a nonprofit think tank that promotes competition and often argues for more government intervention. Regulators are likely to be swayed by the deal’s impact on the competitive landscape. For the second year in a row, the FCC is expected to stop short of calling the wireless industry competitive in its annual report on the industry, according to people familiar with the report. The Mobile Wireless Competition report has not yet been publicly released, but it is expected to find that concentration has increased within the wireless industry. But the FCC also won't go so far as to call the industry uncompetitive, sources said. An FCC official said the “mobile marketplace is so incredibly diverse; an up-or-down determination on competition would be over-simplistic.”

Testimony Preview: AT&T's Stephenson, Deutsche Telekom's Obermann

The CEOs of AT&T and Deutsche Telekom, the parent company of T-Mobile, will try to allay congressional concerns about their proposed merger at a House Judiciary hearing May 26.

AT&T CEO Randall Stephenson will reiterate points he made before the Senate Judiciary Committee earlier this month:
:This transaction is about consumers. It's about keeping up with consumer demand. It's about having the capacity to drive innovation and competitive prices for consumers. And most important, it's about giving consumers what they expect — fewer dropped calls, faster speeds and access to state-of-the-art mobile broadband Internet service — whether they live in a large city, a small town, or out in rural areas."

Deutsche Telekom CEO Rene Obermann will cite competition from online voice services such as Skype and Google Voice. "T-Mobile has been caught in the middle of this dynamic marketplace and has had an increasingly difficult time competing," he notes. He will make it clear that DT is thinking more about Europe than the U.S., potentially a selling point for lawmakers who would like to see the No. 4 U.S. cell phone company move into American hands. Obermann says DT would have trouble investing in T-Mobile even if spectrum were available for purchase due to the company's needs in Europe. "Even if [spectrum were] available, such an acquisition would have forced Deutsche Telekom to reallocate funds from our core European operations into T-Mobile USA — which would have been very difficult for us given our overall group debt situation and our capital investment needs in Europe."

AT&T Finds Unlikely Source Of Support

While most of the usual stakeholders have weighed in on whether federal regulators should back AT&T's bid to buy rival T-Mobile USA, one unlikely player to give its two cents is the Sierra Club.

The group sent a letter to Members of Congress "to express optimism about the potential expansion of broadband that the proposed merger of AT&T and T-Mobile provides," though it did not explicitly say if it supports approval of the deal. "Expansion of broadband technologies to rural America brings a vital 21st century infrastructure to all our communities and will conserve energy by eliminating carbon emissions related to travel and promote other efficiencies through smart grids and smart meters accessed through broadband," Sierra Club Executive Director Michael Brune wrote. "As regulators examine this transaction, they should consider these values in their deliberations."

Comcast Tests Tech Overhaul

Comcast, facing a growing threat from online video services, is fighting fire with fire.

The country's largest cable-service provider soon will start testing a new way to deliver its television channels, co-opting the same technology standard that upstart Internet rivals have used to challenge traditional pay-TV business models. Using the MIT campus as its proving ground, Comcast in coming months will try delivering TV channels using the same standard used to deliver data over the Internet, known as the Internet protocol, or IP. Like other cable providers, Comcast currently delivers channels over less versatile digital television technology that sends the video in streams to set-top boxes and isn't compatible with the Internet. Comcast executives say the purpose of the switch is to deliver live TV service to any device that can connect to the Internet, as they attempt to one-up online video services that offer a relatively limited amount of content on demand, not live. The new IP architecture also allows Comcast to more easily update the look and feel of its guide and add features like the ability for users to access some content from the Web—like video from Facebook— through the Comcast interface.

Privacy debate ahead, Facebook adds Bush aides to lobby team

Facebook is adding two Republicans from the Bush White House to its lobby team as it gears up for the debate over consumer privacy legislation.

Joel Kaplan, who served as deputy chief of staff under President George W. Bush, will join Facebook on June 13 as vice president of US public policy. He will report to vice president of global public policy Marne Levine. Accompanying Kaplan from the Bush White House will be Myriah Jordan, who will join the firm’s congressional relations team on June 6 as policy manager. She most recently served as general counsel to Sen. Richard Burr (R-NC). Cathie Martin, who had been managing Facebook’s outreach on Capitol Hill, will take a leave of absence starting in early June to tend to personal matters. There is no timetable for her return; in the interim, Jordan and public policy director Tim Sparapani will take over congressional relations.

A Library of Listening, Made by You

[Commentary] Want to know the real problem with the digital age? There’s not enough to listen to. I mean, what is there, other than your iPod music, your phone, AM/FM radio, satellite radio, podcasts, Internet radio stations, Pandora, Rhapsody, Napster, Slacker, Live365 and maybe one or two hundred other sources? I kid, of course. The thing is, though, they’re all compromises. The free ones don't let you choose exactly what you want to hear or when; the ones that do cost money. But that’s about to change. One phrase should tell you all you need to know about the latest development: free TiVo for radio. That’s the promise of DAR.fm, a Web site that lists every single radio show on every one of 1,800 AM and FM stations across the country. (It stands for Digital Audio Recorder.)

Benton

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