Wheeler Should Adopt ‘Fundamental Competition Policy’ says Hundt
The FCC under Chairman nominee Tom Wheeler should make it a point soon after Wheeler and Michael O'Rielly are sworn in to lay out its view of how competition should be regulated, said ex-Chairman Reed Hundt during a Technology Policy Institute panel Tuesday. “Adopting a fundamental competition policy is one of the first orders of business for the new commission.” In a paper (http://stanford.io/16KZBGr) referenced repeatedly at the event, he said the FCC should let the market work, but be ready to step in with regulation to address bottlenecks and protect competition as needed (CD Sept 30 p11). AT&T Senior Executive Vice President Jim Cicconi said the commission should focus instead on large communications policy projects like the IP transition and the incentive auction. “Where I get nervous is when the FCC tries to operate like a mini antitrust agency,” said Cicconi. “They're not the expert agency when it comes to antitrust and competition."
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Hundt said the FCC should continue to be involved in regulating competition because it’s better than other agencies at anticipating the future. “You want it to be ex ante and not ex post,” said Hundt. “You want it to get out of the way of things it needs to get out of the way of and open doors” for innovations such as the spread of high-speed broadband, Hundt said. Cicconi pointed to the FCC’s “disappointing” delay in authorizing AT&T’s request to test deregulation on two wire centers as an example of the commission’s handling its role poorly (CD Sept 11 p17). “The new FCC ought to come in and start stating its point of view on these topics very early, very clearly and then begin acting on those statements,” said Hundt.
Cicconi said proposals that the FCC restrict bidding by AT&T and Verizon in the incentive auction are examples of the agency taking on too much antitrust responsibility. “Restricting the two biggest bidders is a prescription for failure,” he said. He said the FCC should enforce competition with spectrum screen rules, but restricting the bidding further “seems purely designed to advantage one set of companies.” There’s “nothing wrong” with rules that restrict the total amount of available spectrum a carrier can buy, he said. “I'm not arguing we can’t have reasonable auction rules."
The auction design makes it more likely for one or two carriers to end up with most of the wireless spectrum, because the Spectrum Act is focused on creating revenue, Hundt said. “The House got it wrong.” He said other countries that have held spectrum auctions focused on revenue have all ended up with wireless monopolies and duopolies.
"It makes me nervous when the FCC talks about its long-term vision,” said George Mason University Law Professor Thomas Hazlett, also a panelist. “The FCC is much too insular” to stay informed about the consequences of its policies, he said. The Department of Justice and the FTC are better suited to enforce competition, said Hazlett. He used the E-rate program as an example of FCC insularity. Though it’s treated as a successful effort by the commission, it’s “not ready for prime time,” and GAO has said the program doesn’t help education, said Hazlett.
Cicconi said any kind of changes at the FCC would have to flow through its new chairman. The FCC is “most effective and helpful to society when effectively led,” said Cicconi. Hundt said Wheeler’s confirmation, which hasn’t faced any strong opposition, should've taken days instead of months. “We need a confirmed chair as quickly as possible,” said Cicconi. “The types of things we're talking about can only be addressed by a confirmed chair.”