[On March 17, Federal Communications Commissioner Anna M. Gomez hosted panel conversations featuring communications and technology policy experts that lived through the creation and implementation of the Telecommunications Act of 1996. Former FCC Chief of Staff Blair Levin was invited to participate but could not attend. He shared his thoughts with Commissioner Gomez in the letter below, reprinted here with permission of the author.]

Dear Commissioner Gomez,

Thank you for inviting me to the Federal Communications Commission (FCC) Webinar on lessons learned from the 1996 Telecommunications Reform Act. I apologize that a long-scheduled trip to spend time with a granddaughter in St. Louis prevents me from attending in person. But my experience with the ’96 Act, as well as my work with the FCC staff creating the 2010 National Broadband Plan, leads me to suggest some questions I hope the FCC considers as it reflects on both its past and future.

The context, of course, is that the economy of the next several decades will be even more dependent on the tools of communications than we could foresee in 1996 and 2010.  Specifically, the emerging AI economy will depend on the communications networks that are even more reliable and available than those the FCC has regulated since Congress created the agency in 1934. All the data studied and generated by AI algorithms pass through these networks, both going to or coming from data centers to the ultimate consumers. In the future, intelligence in the networks will increasingly play a role in shaping that data as well.

As an indication of the importance of those networks, it is notable that in the 1990’s, none of the top seven American companies by market cap[1] were built on top of communications networks. By contrast, the top seven firms now[2] all come from the communications technology revolution jumpstarted in the 1990s.

That is, our economy is already dominated by goods and services that reflect the shift to an information economy. That shift will accelerate thanks to developments in AI as well as related technologies, including quantum computing, virtual reality, and advanced robotics.

So, just as the ’96 Act benefitted from years of work in Congress and at the FCC focused on the economics and technologies of the then-upcoming transition to digital networks prior to the passage of the legislation, the FCC needs to be forward-looking and contemplate the FCC’s role in the AI transition.  Further, as the ’96 Act was the last time the federal government overhauled how it regulated a critical sector with a different approach and multiple rule changes, it is the most important example to examine as we contemplate how best to respond to the AI transition.

In that light and considering lessons learned in my two stints with the FCC, I would urge that the agency’s leaders to examine the following questions.[3]

How can the FCC provide Congress and the American public the information they need to develop better policies and make better decisions in addressing the opportunities and risks of the AI economy and society?

Every good decision made in implementing the 1996 Act and writing the National Broadband Plan came from asking the right questions and obtaining accurate information.  Congress has long understood that the FCC plays an important role, not just in key moments such as with those two efforts, but on an ongoing basis, requiring the FCC to issue periodic reports on such topics as broadband and mobile competition and universal service programs.

The FCC should rethink how it collects and provides such information and broaden its mission to identify key metrics for the AI economy.  AI offers us an opportunity to collect information more robustly and accurately at a much lower cost for the FCC and stakeholders. As a Wall Street analyst, I have been struck by how much more accurate and timelier the information is that Wall Street provides to the investment community than the information that the FCC collects and disseminates.[4]

Various government agencies, such as the Bureau of Labor Statistics and the Census Bureau, provide invaluable information, but they are rooted in an earlier time, both in terms of the questions being answered and the methodology for collecting the responses. The FCC should broadly explore what metrics are most important for Congress and the American public that are not being addressed.  Then, the FCC should either start to do so or recommend to Congress a way to collect and disseminate such information.

What are the communications networks we need for our country to thrive in the AI economy?

In the ’96 Act, Congress wisely included a language about “advanced telecommunications capability” that would facilitate “the transmission of high-quality voice, data, graphics and videos in both directions.” It further mandated that the FCC and states should encourage deployment of such capabilities.[5]

That mission has largely been accomplished. The performance metrics for broadband that most Americans have in their homes and places of employment are today more than sufficient to handle current mass market applications.

But are today’s networks good enough for the age of AI? I am doubtful. There are already indications that our country needs to rethink our approach to communications networks. For example, a recent report from BCG argues that 6G will become the critical network for utilizing the full potential of AI.[6]  As that report suggests, while today’s networks were largely designed to optimize video streaming—which involves heavy data flowing down to devices, AI will require networks in which the data runs the other way, with sensors, cameras, wearables and robots, among other sources, providing data that flows upstream to be processed and acted upon.[7]

In addition, the FCC should evaluate the role of networks that were not part of the ’96 Act’s calculus. In the 1990’s, Congress and the FCC took important steps to aid the development of satellites as a tool for communications; they are even more important now.  In a similar vein, fixed wireless has become an important provider of communications services.  But how do these technologies fit into the communications needs of the AI economy? What should be the national strategy for facilitating such communications and, particularly with satellite, what should be our international diplomatic strategy for achieving our goals?

Whatever such analysis will tell us, one of the lessons I learned from the Act and the Plan was that what we all thought we knew at the beginning of any proceeding turned out to be insufficient to address intelligently questions about the future. The FCC is the federal agency best positioned to collect information about the network requirements in the decades ahead and, based on that information, either act or recommend actions of others to assure that the United States can lead the world in the AI economy.

What are the gaps in making such networks accessible and affordable to all?  That is, how should we adjust and reform the Universal Service Fund, as we did when we moved from voice to mobile and then to broadband, for an AI economy and society?

The 1934 Communications Act—reaffirmed in the 1996 Telecommunications Act—mandated that “consumers in all regions of the Nation, including low-income consumers and those in rural, insular, and high cost areas, should have access to telecommunications and information services, including interexchange services and advanced telecommunications and information services, that are reasonably comparable to those services provided in urban areas and that are available at rates that are reasonably comparable to rates charged for similar services in urban areas.” The 1934 Act was itself an update of the 1913 Kingsbury Commitment, which established the principle that communications networks should serve all Americans.

The FCC, in implementing the 1996 Act, created the Universal Service Fund (USF) program. During the Bush Administration, the FCC wisely updated the program to include mobile as eligible for Lifeline support. Then, consistent with recommendations in the 2010 Plan, the FCC subsequently updated the program multiple times to transition the focus to broadband, rather than voice, access.

Congress updated the USF vision in the 2021 Infrastructure Investment and Jobs Act, finding that “(1) Access to affordable, reliable, high-speed broadband is essential to full participation in modern life in the United States; (2) The persistent ‘digital divide' in the United States is a barrier to the economic competitiveness of the United States and equitable distribution of essential public services, including health care and education; and (3) The digital divide disproportionately affects communities of color, lower-income areas, and rural areas, and the benefits of broadband should be broadly enjoyed by all.” Consistent with those findings, Congress created the $42.5 billion Broadband Equity, Access, and Deployment (BEAD) Program.

It is critical for the FCC to update the USF program again for four reasons: first, as is widely acknowledged, the Contribution Factor needs to be reformed to provide a sustainable funding base; second, the program should be updated to reflect the post-BEAD realities in terms of unserved locations;[8] third, the program should be upgraded to reflect new technological developments, particularly regarding fixed wireless and satellite capabilities; and fourth, it should reflect the mandate of universal access and affordability to all to networks that will allow all to participate in the economic and social life of their communities.  In addressing each challenge, we should determine, just as we did in transitioning from voice to broadband, how to transition Universal Service to assure that all locations, all public institutions, and all people have access to and can afford the networks they need to thrive in the AI economy.

How do we protect children in the AI economy and society?

In the age of broadcast, Congress and the FCC wisely took several steps to both protect children (such as decency and profanity rules, limits on advertising and the V-Chip) and assist children (such as the Children’s Television Act of 1990, as well as the establishment and funding of the public broadcast system which produced the most important educational programming for children).

The 1996 Act tried to create similar protections on the internet with the Communications Decency Act. The Supreme Court in Reno v. ACLU[9], however, gutted those provisions while preserving Section 230’s broad immunity for platforms.  Since then, the federal government has been largely absent from subsequent efforts while numerous states have passed laws attempting to protect children from potential adverse effects of social media.

Those adverse effects of social media will likely be increased by AI. So, what should be done? Perhaps the Reno precedent leaves room for another action to protect children from inappropriate communications, and especially from some of what AI does. Certainly, some entity at the federal level should be studying the state efforts to determine their effectiveness and evaluate if there is a baseline federal standard that should apply throughout the country.  However, no one should doubt that we need to protect children from potential adverse effects of AI. 

There are important debates to be had about how to do so, including how to offer parents meaningful controls, how to establish and enforce privacy and content settings, what disclosures should be provided, and how to balance speech and privacy rights, among many others. States are already having those debates, trying to steer between two bad alternatives of zero protections versus zero rights.[10]

The FCC can be a key federal forum for such deliberations, as it already interacts with key stakeholders and has expertise on many of the technical and economic underpinnings of any policy designed to address the issues. 

At a minimum, such deliberations can provide an understanding of the problems we as a country need to address. It is possible that the FCC already has authority to take some actions but, in any event, the FCC can provide its learnings and expertise to Congress so that we might have some baseline national rules to protect children, similar to how national rules proved critical in achieving the goals of the ‘96 Act.

What are the new models for consumers to make informed decisions about the AI products they use that can propel a race to the top rather than a race to the bottom?

The ’96 Act wisely chose the path of competition to drive faster, better and cheaper communications. But as every economist would agree, efficient competition relies on transparent markets where consumers have the information they need to make informed decisions about the best value proposition for their needs.

Congress and the FCC have struggled to determine how best to provide such information. Doing so inherently involves trade-offs between the benefits of such information and the costs of collecting it. But the tools of modern communications can allow government to act as a platform might inform consumers and help better, and perhaps less obtrusively, resolve disputes between consumers and providers and provide a record that can help consumers pick the best plan for them while providing incentives for companies to improve their services. We can imagine an FCC agent, generated by AI, to aid in this effort.[11]

Information of this nature is akin to that provided by consumers on Yelp or Google. The difference is that the system is built not just to provide an opinion, but also to facilitate improved performance. While government institutions used to be physical places, today “many or even most government departments and agencies ‘are’ their information systems and digital presence—the only part of them with which many citizens will interact.”[12]  In an information economy, the government’s role can sometimes shift from rule maker to facilitator and monitor, including for large-scale complaint resolution or for long-term planning. So here, the FCC should explore how to efficiently collect and display information that provides incentives for improved communications services.

How do we protect against cyber and national security risks?

The FCC has historically taken numerous actions to secure communications networks and protect Americans, such as requiring licensees to implement cybersecurity programs that protect against unauthorized access, data breaches, and service disruptions, banning authorization for equipment from companies deemed a national security risk, and safeguarding sensitive information, such as location data and call records.[13]  Further, as we have seen with the delays in implementing the “Rip and Replace” legislative mandate, it is important that Congress and the FCC coordinate on how to protect communications networks from potential security risks.

There are reasonable debates about who in the government should have the primary responsibility for such protections going forward, but as the FCC is the expert agency tasked with regulating the networks that are the primary target of such risks, the FCC should develop a record that provides itself, Congress, and others in the government the foundation they need to understand the existing risks, risks that may arrive in the future and to establish assessment procedures and incentives to counter those risks.

How can the tools that underly the AI economy improve the delivery of essential public services, including education, health care, and public safety?

One of the great insights and achievements of the ’96 Act was the expansion of Universal Service principles to institutions that serve public needs, such as schools, libraries and health care facilities. Congress also specifically tasked the drafters of the Plan to evaluate how broadband could enhance the performance of those institutions as well as improving public safety, energy delivery, and civic engagement.

Just as the movement from voice to broadband created new opportunities for the delivery of public services, AI will expand those opportunities even further and faster.  While public services are often beyond the scope of the FCC’s jurisdiction, the FCC should at a minimum understand the network needs of those sectors and ensure that those needs are met, as well as serving as an expert advisor to the institutions, at all levels of government, who have primary responsibility for such services.

What new powers does the FCC need, or should there be new expert agency, to address the issues we know we will face in the AI economy and society?

One of my key takeaways from the ’96 Act was the need for an expert agency to gather information, set rules consistent with Congressional legislation, and enforce those rules. As evidence for that belief, the Act required the FCC to complete 110 rulemakings within eighteen months of its passage. In addition, the Act required the FCC to continually study markets and, in some cases, update its rules in a manner consistent with market changes.

In ’96, there were many unknowns, so Congress counted on an expert agency to continually consider new evidence and act accordingly. That task will be even more important, and tougher, given the unknown path of AI on our economy and society. Recent Supreme Court decisions establishing the “major question doctrine” and overturning the Chevron doctrine, however, put an even greater burden on Congress to specify what it wants done.[14]

But whatever the difficulties, it is certain that just like with railroads and the ICC, airlines and the CAB,[15] cars and the NHTSA, and telephones and broadcasters and the FCC, some industries have a level of importance to the economy that requires a specialized expert agency to assure that the enterprises in the sector maintain standards that enhance the common good. 

AI has a similar importance and risk to those sectors. Reasonable minds can differ on whether Congress should provide the FCC (or FTC) that jurisdiction, create a new agency, or spread the authority across multiple agencies.  But the FCC should provide Congress with advice, based on its own experience with the 1934 and 1996 Acts for how Congress can empower an agency that can gather information, set rules consistent with Congressional legislation, and enforce those rules.

In closing, let me thank you again for holding the webinar and allowing me to send you my thoughts. I concede that the agenda I have set out is ambitious. But as you noted in your own recollections on the 20^th Anniversary of the Act,[16] the FCC is capable of “monumental” accomplishments,[17] including being able to work on many rule makings simultaneously.

In this regard, let me note that the FCC just began a proceeding about sports programming. That is an appropriate way to investigate that issue--even though the FCC’s authority is uncertain—as the issue is significant for many Americans. 

It is obvious, however, both from my work advising capital markets and as a citizen, that determining how to assure that our communications networks enable the economy to thrive and for all Americans to fully participate in the AI economy and society will prove far more important. 

The time to start work on that agenda is now.

Best,

Blair Levin

(All the thoughts contained in this letter are my personal thoughts and should not be attributed to any institution with which I am affiliated.) 

Blair Levin is the Policy Advisor to New Street Research and a nonresident senior fellow at Brookings Metro. Prior to joining New Street, Blair served as Chief of Staff to FCC Chairman Reed Hundt (1993-1997), directed the writing of the United States National Broadband Plan (2009-2010), and was a policy analyst for the equity research teams at Legg Mason and Stifel Nicolaus. Levin is a graduate of Yale College and Yale Law School.

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