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Technological Change and Economic Opportunity: The View from the Federal Communications Commission
Pages 38-55

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From page 38... ... Tenhula expressed his pleasure at having been invited by the STEP Board to present a perspective from the Federal Communications Commission (FCC) on the telecommunications challenge the symposium was exploring, although he also voiced regret that Michael Powell, the Commission's chairman, had not been able to attend and to share his views. Read the entire page →
From page 39... ... THE GREAT DIGITAL MIGRATION To illustrate the challenging regulatory transition dubbed by Chairman Powell as "The Great Digital Migration," Mr. Tenhula projected a graphic representing the "winding road from decades of regulatory stovepipes to a heavenly vision of a wide variety of applications and services being provided over a plethora of competing telecommunications platforms" (see Figure 1) Read the entire page →
From page 40... ... No/little with and sanctioned slow (State digital prices; innovation but Universal TV/ Radio Balkanized network/one -- regulated Spectrum -- great one Limited/Govt. -- Limited world -- Regulated Significant Heavily boundaries The -- -- Networks -- Coax Video 1 Structures Stovepipes Analog narrowband Competition monopolies Market 2-Dimensional Consumer differentiation; Innovation Ubiquitous subsidies Regulatory jurisdictional � � � � � � Voice Copper FIGURE Read the entire page →
From page 41... ... Mr. Tenhula listed some Wireline Migration matters in which the FCC was involved: � The Triennial Review, a follow-up to the 1996 Telecommunications Act, was a "very litigious" proceeding involving deregulation of local loops as well as delegation to and regulation by the states of unbundled network element and its pricing. Read the entire page →
From page 42... ... � Video Over DSL was showing a great deal of promise. � Wireless Mobile Media, an example of which was the one-minute TV episode had been the object of recent announcements by Texas Instruments, Qualcomm, and Infineon, which also planned to transmit high-quality video to the small screens on cell phones. Read the entire page →
From page 43... ... There were already "tons" of examples of this change, including: � digital cameras and photo printers, which had allowed photography to move from the darkroom into the home; � iPods, MP3 players, and downloadable services, which were combining to replace CDs; � peer-to-peer communications and file sharing; � personal video recorders, such as the TiVo, which give users control of what they want to watch and when they want to watch it; � private movie theaters, found in family rooms and minivans; � GPS satellite receivers, which were becoming standard on tractors, allowing farmers to know exactly where to plant their seeds; on automobiles, allowing drivers to know their location should they get into trouble; and in cell phones, fulfilling E911 requirements that the user be locatable through the phone in an emergency; and � WiFi VoIP phones that can bypass public networks. Such were their economics that these devices were likely to become increasingly more powerful and less expensive, and they would require networks of networks to serve them and applications to ride on them. Read the entire page →
From page 44... ... Tenhula, was "putting the `public' back into the `public interest' through inevitable innovation." WIRELESS: A MODEL FOR DEREGULATION Looking ahead to the remaining challenges of spectrum-policy reform, he suggested that "the wireless way of getting to multiple broadband platforms," whose results he judged to be "pretty promising," offered a successful deregulatory model for the rest of telecommunications based on flexible, marketoriented regulations, as opposed to "command-and-control" restrictions of the past. Although the number of national providers of wireless telephone services had shrunk to five with the Cingular-ATT merger, the country still had multiple regional and rural providers of wireless services, as well as dozens of niche players, especially in the middleware and applications layers. Read the entire page →
From page 45... ... � Implement ways to increase access to the spectrum in all dimensions for users of both unlicensed devices and licensed spectrum. When it came to the regulatory models, Mr. Read the entire page →
From page 46... ... The Task Force's recommendation was to improve access to spectrum by permitting licensees greater flexibility and to promote access in all dimensions through smarter technologies. In the wake of the Task Force's report, the FCC had been eliminating barriers to secondary markets; designating additional spectrum for unlicensed devices; improving access to spectrum in rural areas; studying receiver interference immunity performance issues and interference temperature concepts; facilitating smarter radio technologies; and conducting service- and band-specific proceedings through which it was implementing these principles. Read the entire page →
From page 47... ... , on making more radio spectrum available for wireless broadband technologies. In July 2004, DOC had issued a pair of reports containing recommendations focused on improving spectrum management, especially within the government. Read the entire page →
From page 48... ... � Layered model(s) should present an optimal regulatory Content framework for analyzing communications policy issues. Read the entire page →
From page 49... ... " Logical Physical FIGURE 6 Issues and opportunities: Vertical silos to horizontal layers -- III. Read the entire page →
From page 50... ... Mr. Tenhula, acknowledging a personal preference for the layered model, asserted that it could present the optimal regulatory framework for analyzing communications policy issues because it would allow policymakers to separate the layers and thereby focus decision making at the level of the problem. Read the entire page →
From page 51... ... Tenhula stated that in his view "spectrum is not only in the air, but everywhere: in twistedcopper pairs, in coaxial cable, in fiber cables in the form of colors, and in powerlines." DSL is the high-frequency part of the twisted pair, coaxial cable "some video channels that are set aside from spectrum for cable-modem service." In support of this perspective, he posed the question: "Should the wireless spectrum be privatized like wireline spectrum has always been? " Other opportunities for studying alternative regulatory frameworks included: � monitoring European Union electronic communications directives and their implementation; � weighing enforcement against rulemaking models of regulation -- for example, the anti-trust vs. Read the entire page →
From page 52... ... trust in the agency as an enlightened group of individuals acting in the public interest." The 1996 Act, he said, was characterized by "a comprehensive blueprint based on current technology; very prescriptive terms inviting litigation; very parochial, special interests; restraint on the regulator; and the hope that competitive market forces will someday prevail." Was there something better than the status quo? Should the FCC become a Federal Communications Corporation along the lines of Fannie Mae and Freddie Mac? Read the entire page →
From page 53... ... Tenhula set forth a potential framework for new legislation that would: � end the government monopoly over spectrum allocation; � end implicit subsidies and eliminate windfalls; � allow for natural separation of the layers and sub-layers; � provide tools for policing anti-competitive denial of access to both the wireless and wireline spectrum that, however, would not deny the benefits of efficient vertical integration; and � maintain FCC jurisdiction over the service layers and protect consumers in cases of market failure. Under such legislation, he asserted, the FCC might be able to act as an expert tribunal to resolve actual disputes in a timely manner. Read the entire page →
From page 54... ... Lempert had mentioned as: "There's 10 years more of the broadcast silo." The issue tied in the content layer, the very top layer of his model, with the physical layer of spectrum at the bottom. While "broadcast spectrum" is simply a means of distributing video signals, he said, because of the traditional definition of broadcasting such reactions would continue -- until, perhaps, "viewership tips over" to cell phones, to cable, or to the Internet. Read the entire page →
From page 55... ... This would happen elsewhere, he predicted. Mark Myers of the University of Pennsylvania's Wharton School said that the move from a stovepiped to a horizontal regulatory model called to his mind how the computing model went from vertical integrated systems to horizontal. Read the entire page →

From page 38...

... Tenhula expressed his pleasure at having been invited by the STEP Board to present a perspective from the Federal Communications Commission (FCC) on the telecommunications challenge the symposium was exploring, although he also voiced regret that Michael Powell, the Commission's chairman, had not been able to attend and to share his views.

Technological Change and Economic Opportunity: The View from the Federal Communications Commission Pages 38-55

Technological Change and Economic Opportunity: The View from the Federal Communications Commission
Pages 38-55