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Policymaking in a Time of Technology Transitions

by: Zachary Katz, Chief of Staff

February 22, 2013 - 10:40 AM

As of last summer, more than 55% of U.S. wireless consumers had smartphones, up from 16% in 2009. The iPad launched less than three years ago; today, more than one third of consumers have a tablet or e-reader. And half of all adults under 35 now live in households without wireline phone service. The ways we share and exchange information are changing fast, driving tremendous benefits for consumers and businesses throughout the country. 

At the FCC, we're working to make sure our policies keep pace with this rapidly evolving communications landscape. Faced with major technology transitions -- from narrowband to broadband; from time-division multiplexing (TDM) to Internet Protocol (IP); from copper to fiber; from only wireline services to greater use of wireless -- we're focused on accelerating these trends and carrying out Congress's directives to serve the public interest in this dynamic, innovative sector. Over the past few years the FCC has made significant progress toward those goals, including developing the country’s first National Broadband Plan, overhauling the Universal Service Fund from voice to broadband, transforming the intercarrier compensation system, and unleashing more spectrum for wireless broadband. But as technology transitions continue, much work remains, which is why Chairman Genachowski created the FCC’s Technology Transitions Policy Task Force in December.

Last week I spoke at the University of Colorado's Silicon Flatirons Center about the FCC in a time of technology transitions. I emphasized that technological transitions do not change the values Congress codified in the Communications Act, and that the FCC remains committed to advancing a set of core principles rooted in those values.

What are those principles? For the Tech Transitions Task Force, the following are key:

  • Competition. Over the last two decades, we've moved from monopoly toward competition in many areas of the communications market, a hugely positive trend. Take voice service: Today, most consumers and businesses have several options to choose from, including their local phone company, a cable company, multiple wireless providers, and Internet providers like Vonage and Skype. These choices exist because of massive private investment, and because of policies that created and maintain the conditions necessary for competition to flourish, including rules to ensure interconnection; consumer roaming across mobile carriers; number portability; and Internet openness, so broadband providers can't block competing voice apps and services. Still, competition challenges remain. For example, for robust residential broadband with no or high monthly usage limits, most consumers today have only one or two choices. Some have suggested that an all-Internet Protocol communications market will necessarily be robustly competitive -- "Deregulate for a competitive, all-IP world!" would be the bumper sticker -- eliminating the need for FCC policies to foster and  protect competition. But basic economics and the facts on the ground show that's simply not true. Technological change brings great benefits, but it doesn't automatically bring vibrant competition, particularly in high-fixed-cost, network-effects-driven market segments. At the same time, it's also not true that all legacy regulations remain appropriate for promoting competition in today's marketplace. We must take a nuanced, data-driven approach to determining which policies to keep, which to eliminate, and which to add or modify.
  • Universal service and consumer protection. The U.S. largely succeeded in connecting all Americans to the dominant communications platform of the 20th century -- the telephone network -- and used a number of policies to protect and empower telephone consumers. In the 21st century, universal service and consumer protection remain vital goals. But we will not meet these goals, no matter how fast technology transitions proceed, without modern policies like the 21st Century Communications and Video Accessibility Act of 2010, the Connect America Fund, and the Mobility Fund.
  • Public safety. Ongoing technology transitions promise to substantially improve public safety. For instance, 4G LTE and next generation 911 can enable first responders to access data, video, and images in ways that will help them save lives. At the same time, technology transitions present new risks. Last year's major natural disasters highlighted the fact that, unlike copper, fiber networks do not have an independent source of power, which means consumers and businesses can lose access to 911 and other vital services during an emergency. And IP networks bring with them significant cybersecurity threats. Policies and industry standards need to evolve to ensure that the resiliency of our networks is not diminished as a result of technology transitions.

As the FCC’s Technology Transitions Task Force continues its work, it's focused on determining, based on an open process, robust data, and careful analysis, what policies these key principles require in today’s and tomorrow’s communications marketplace. What legacy rules no longer make sense? What rules need to be modernized? What new rules are necessary to protect and further competition, universal service, and consumer protection, and public safety? In answering these questions, our next step will be a public workshop on March 18th, where we look forward to obtaining data and analyses to establish a factual baseline regarding key technology transitions that will inform the Task Force's work.

Updated: February 22, 2013 - 11:25 AM
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