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An Ex-Regulator's Predictions for 2011 An Ex-Regulator's Predictions for 2011

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An Ex-Regulator's Predictions for 2011

Upton may hold the key, and privacy and net neutrality will be back.

FCC Chairman Julius Genachowski.(Chip Somodevilla/Getty Images)

January 5, 2011

Updated at 7:42 a.m. on January 5.

EDITOR’S NOTE: Bruce Gottlieb is National Journal’s general counsel. He was previously chief counsel of the Federal Communications Commission and a staff writer at Slate, where he was the first author of the Explainer column.

The FCC has just finished a busy few months, first voting on a net neutrality order and then circulating a Comcast-NBC order to the full commission, which will likely be finalized in the next few weeks.

 

So with the two biggest issues of 2010 in the rear-view mirror, what’s next for FCC World in the new year? Here are your ex-regulator’s predictions on the issues that will dominate 2011:

1. Just Ask Mr. Upton. A newly GOP-led House Energy and Commerce Committee, chaired by Rep. Fred Upton of Michigan, is the big news for 2011. The Republicans are taking the helm after four years in the minority; it’s been a decade since they had oversight authority over a Democratic FCC.

They may revisit every important Obama tech decision over the past two years. Expect particular focus on the FCC’s recent net neutrality decision and the $8 billion of broadband grants from the post-election Recovery Act.

Actual legislation reversing past agency decisions or restraining future ones seems unlikely. But the practical burden and in terrorem effect of rigorous oversight are going to be big factors in 2011.

2. Net Neutrality All Over Again. The net neutrality order will also wend its way through the appellate courts. Plenty of important decision points in the months ahead. Four include:

    -- Who is going to sue?  Probably both ends of the ideological spectrum -- broadband providers and public interest groups who feel aggrieved by the split-the-baby compromise.

    -- Which court will hear the case? Probably the D.C. Circuit. But it could end up elsewhere. 

    -- Will there be a judicial stay? Hard to say. But definitely possible. It matters because engineering decisions made today can’t always be undone, even if the rules at issue are eventually overturned.

    -- What if the FCC loses again? Maybe Congress will overhaul the antiquated Telecom Act and finally decide, up or down, whether the FCC has authority to regulate broadband. If not, it is hard to imagine any FCC, Democratic or otherwise, taking a third stab at a net neutrality rule. A lot will hinge on what Congress and the FCC look like after the 2012 elections. (Disclosure: Until this summer, I was a senior adviser to FCC Chairman Julius Genachowski and was involved in some of the early decisions that led to the recent net neutrality order; before that, I was an adviser to Commissioner Michael J. Copps.)

3. Broadcast Spectrum. The FCC has asked Congress for authority to develop "incentive auctions." These will repurpose broadcast TV spectrum for wireless broadband -- and raise billions for the U.S. Treasury.

Look for an interesting matchup and strange bedfellows, as the idea has opponents and supporters on both side of the aisle.

4. Over the Top Video. Every company in the tech universe is trying to get into the market for online video delivery over broadband: Google TV, Apple TV, Netflix (and many others) streaming movies, and the cable/telcos' cable channels and video on demand.

Expect a series of recurring battles over the ground rules for how high-tech and content industries reach residential customers over the (increasingly congested) cable/telcos last-mile connections. Hot topics are likely to include traffic management techniques (net neutrality v 2.0) and sparring over the technical interfaces for delivering cable and telco video.

5. Wireless Competition. Over the past decade, the pack of wireless companies has thinned and the top two (AT&T and Verizon) have pulled away from the rest. The issue has been a sleeper for the past couple of years, but with AT&T’s purchase of $1.9 billion of Qualcomm spectrum licenses (requiring regulatory approval in 2011) and increasing concerns about the health of Clearwire (the most viable non-Bell provider of wireless broadband) it seems poised to return to the spotlight in 2011. Action could occur at either the FCC or the Department of Justice's Antitrust Division.

These have traditionally been highly partisan battles, with Democrats supportive of and Republicans opposed to regulations aimed at limiting market concentration.

6. Public Safety. Efforts to build a wireless broadband public safety network for first responders -- as recommended by the 9/11 Commission -- have faltered, with deep rifts among public safety stakeholders, key legislators, and the FCC about how to move forward.

As the 10th anniversary of 9/11 approaches this fall, expect substantial maneuvering on every side, either to find a way to build a network or, barring that, to identify a scapegoat for why we still don’t have one.

7. Universal Service and Intercarrier Comp. The FCC committed, in last year's National Broadband Plan, to attacking the Gordian knot of existing subsidies to rural phone companies and payments between different phone companies for connecting long-distance calls.

This is the "land war in Asia" of telecom policy. Everyone wants reform of the multibillion-dollar programs, but no stakeholder wants to lose any of those multibillions of dollars. Add to the mix the eternal tension between urban and rural interests that divides the House and Senate, plus the generally fraught political environment for issues that involve taxation and the size of government. This is precisely the recipe for inertia that has led to the status quo.

8. Privacy. Privacy falls in an ill-defined alphabet soup of the FTC, the Commerce Department’s NTIA, the FCC, and others. It is ripe for major attention, of course, because of the increasing importance of online activities to daily life -- but also because of the perception that the high-tech industry (which leans simultaneously libertarian and Democratic) has been given a pass by Democratic regulators and legislators at the expense of the traditional telecom industry (which has friends in all quarters, but especially on the Republican side).

Expect particular attention for location-based-services (your cell phone knows where you are), which are both incredibly attractive to advertisers but can also raise consumer hackles.

9. Wireless Tethering and Sharing. An issue that might cross over from a techie preoccupation to a broader public concern is whether and how consumers can use one wireless device (e.g., an iPhone) to connect other devices (e.g., a laptop) to the Internet. As the number of wireless-Internet-capable devices owned by each American increases, regulators will face calls to intervene in the marketplace if consumers and consumer electronic manufacturers become frustrated with the choices available.

10. New Commissioners. Commissioner Michael J. Copps, whose term expired last year, can only stay until the end of the 2011 congressional session. And Commissioner Meredith A. Baker’s term expires this year, though she can stay until the end of the 2012 session. One scenario is that the Senate confirms their replacements (or renominations) together in 2011. The other is that the commission ends up 2-2 through the 2012 election. As with all FCC nomination processes, this one will be subject to plenty of macro-trends, including the approach of the White House to new nominations and the always unpredictable relationship between Senate majority and minority leadership.

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