Telecom Act Architects See Overhaul as Unpredictable but Not Impossible

"Keep focusing on competition,” advised Billy Tauzin, a former Louisiana congressman who was deputy majority whip among Republicans when the act was signed Feb. 8, 1996. “The need is there.” Bring the players together and “let them duke it out,” Tauzin recommended. He switched from the Democratic party to Republican in 1995 and was House Commerce Committee chairman from 2001 to 2004. “There’s been an enormous evolution in communications,” Tauzin said of changes since the Telecom Act and what he considers “outdated” regulations now. “The challenges are pretty much the same.”

Jack Fields’ children ask him what he accomplished in Congress. “Well, we opened competition,” said Fields, a Texas Republican who was a key sponsor of the Telecom Act when he was House Communications Subcommittee chairman. “We can’t claim that your phone or your apps have happened because of the ‘96 act, but I believe they have. We have companies, large to small, go out and try to think what would really benefit from the consumer.” Fields now lobbies for Verizon and Time Warner Cable.

"There is an incubation period required” in any rewrite, said Rick Boucher, a Virginia Democrat who actively participated in the rewrite process as a member and went on to be House Communications Subcommittee chairman. Boucher spoke on the topic Monday alongside Fields at an event hosted by the Internet Innovation Alliance, with members including AT&T and of which Boucher is now honorary chairman. Boucher expects a rewrite to take place “during the next Congress,” over a two-year period, he said. “It’s not going to be a regulation-free zone,” Boucher said, saying legal barriers must be removed to foster broadband growth: “We would like to see the brakes taken off.”

"What’s your macro framework?” asked Earl Comstock, then-lead Senate Republican staff negotiator and drafter for the committee of conference on the act and also during the 1990s the legislative director for Sen. Ted Stevens, R-Alaska. “There really is nothing happening today that wasn’t on the table in 1996.” Comstock, who was CEO of Comptel after leaving Capitol Hill, questions whether there’s a need or desire for a rewrite and sees the foundation of the act as stable; he blames problems in implementation.

2014 Rewrite Issues

However, Tauzin pointed to fresh telecom challenges: “These are all new issues,” he said, naming considerations such as the domain name debates and net neutrality. “That wasn’t even on the radar back then,” Tauzin said of the latter. Comstock disputed this idea and immediately cited parts of the act he said should apply to net neutrality questions. Comstock blasted the way the FCC has interpreted the act and since distanced itself from the common carriage regulation under Title II, something lawmakers never expected and that shocked him, he said. The FCC’s now-vacated net neutrality rules failed to impress him due to how much more serious the agency’s decision was to reclassify services outside of Title II: “It was a piece of wet tissue they were trying to apply to a gaping wound,” Comstock said of the rules.

Fields and Tauzin wish the act had reined in the FCC more. “We missed a chance back then,” Tauzin said, despite believing in what was accomplished in the act. Tauzin criticized FCC authority over mergers and acquisitions, which he said “led to a lot of shakedowns” behind closed doors. He dismissed fears of Comcast’s proposed acquisition of Time Warner Cable now (see separate report in this issue), calling the matter “simple” and saying it has “nothing to do” with too much consolidation -- it’s really about whether the deal can open new markets. “We gave the Federal Communications Commission too much discretion and too much latitude,” Fields said during the Monday event. Lawmakers should beware any open-ended language, Fields added.

The FCC “has largely charted its own course,” in a way that’s “radically different" from what congressional leaders intended in the act, Comstock said. One of the “most challenging” parts to any rewrite now will be how it revisits the agency structure and bureaus that operate with what he sees as outdated structural divisions, and whether the language of any overhaul reflects lawmakers’ consensus and how the agency interprets it, Comstock said.

Boucher encouraged Congress “to set a date certain for that transition” to IP-enabled services, aiming for the 2020 sunset of the traditional phone network that the FCC has desired. Make spectrum licenses more flexible and create incentives for the reallocation of spectrum, Boucher said, describing recommendations of the Internet Innovation Alliance. Tauzin pointed to tension in Americans’ expectations about sex and violence and the challenges of so much media moving online.

Any overhaul, Comstock reiterated, needs clear vision. Lawmakers in 1996 expected U.S. broadband advancement would be further along than it is, Comstock said. “People were talking about gigabit speeds back then,” he said. Comstock also dismissed the idea that wireless and wireline are competing services. He questioned the way Google Fiber has managed to curry such authority over municipalities’ rights of way and whether that’s a sustainable policy outside of those isolated instances. The FCC is “very captive to a very powerful industry,” Comstock added. “You need somebody to balance out those interests.” The biggest industry players have veto power if they don’t like the proposed rewrite, Comstock said. He doesn’t see “much pressure” in favor of a rewrite now but thinks the biggest industry heavyweights are receptive at the prospect of more deregulation.

Process Steps

Boucher commended House lawmakers for “very thoughtfully” beginning the update process. House Communications Subcommittee Chairman Greg Walden, R-Ore., “is an extremely aggressive, well positioned player, not only respected by the guys in the telecom committee but the leadership, so he has their support,” Fields said, considering how lawmakers could pursue an update and suggesting a Republican Senate may make it easier, depending on the 2014 midterm election outcomes. “Assuming that you have the Republican Senate, you have guys like” Commerce Committee Chairman John Thune, R-S.D., and Communications Subcommittee Chairman Roger Wicker, R-Miss., said Fields. “You've got guys who are ready to move. My counsel has been to these guys, get all your predicate done this year, and immediately in January, you begin the hearing process, you lay it out, and you've got to be off the floor, House and Senate, by [2015’s] late summer, early fall, and that’s what happened to us."

Tauzin called rewrites “brutal” and acknowledged there’s a great deal of “anxiety” and “fear” on the part of lawmakers and companies. “Going back and redoing it is a tough thing,” he said. But although such a huge piece of legislation is uncommon for telecom, Congress has addressed such big items in other sectors: “This is a process that’s not unfamiliar to Congress,” Comstock said.

"The biggest obstacle” in 2014 “is there isn’t a lot of agreement in how services should be treated,” Comstock said, pointing to what he called a “schizophrenic” view among industry stakeholders and lawmakers. “Most people couldn’t say what they mean when they say ’the Internet.'”

All architects emphasized the ways overhauling the act can and should be a bipartisan endeavor. They praised other lawmakers from that 1990s effort regardless of party affiliation. Fields named several members he saw as providing promising cooperation. Tauzin agreed: “The good thing is this is not partisan,” even if it is “hugely time-consuming,” Tauzin said of telecom. “You can legislative in these areas, even with the gridlock in Congress. … It takes a lot of work by a huge group of people."

Fields advocated a dedicated schedule, observing that Walden seems to possess an organized strategy. “What happened, people on the government affairs side, representing all these telecommunications interests, became convinced we were going to do it,” Fields said. “All of a sudden, they started pushing. So that created momentum, and we went from being a little pebble to being a giant tire to being a giant wave, and it kind of rolled everything through.”,