Transcripts For CSPAN3 1934 Communications Act And Modern Technology 20141103

Mention, because i will go anywhere and work with anyone to do whats right for alaskans. I served with dan sullivan in the United States marine corps. Dan sullivan was one of those leaders that led by example. Dan sullivan trained hundreds of alaskan marines to be ready for combat in cold weather conditions. Alaska needs a fighter. I see that in dan sullivan. This country let alone this state was built by people like dan sullivan. When times get tough he cant take no for an answer. He cares about fellow alaskans and fellow countryman. If dan says something hes going to do i believe him because i trust him. Im dan sullivan and i approve this message. What was mark begichs real record as mayor . Over 9,000 now jobs. He eliminated a 33 million deficit. And invested in police, firefighters, and schools. Then as senator he took on obama to fix alaskas v. A. Exempt our schools from no child left behind. And is taking responsibility for fixing the Health Care Law so it works for alaska. Im mark begich. And i approve this message because i will go anywhere, and work with anyone, to do whats right for alaskans. Recent polls list this race as a tossup. You can watch senator begich and mr. Sullivans recent debate any time online at cspan. Org. Next a look back at the Communications Act of 1934 which created the federal Communications Commission. We heard about the new deal thinking that wrote and passed the act and ideas for updating the act today to help reflect modern technology. This was held by the brookings institution. Its an hour and a half. Good afternoon, im stewart, nonresident senior fellow here at the brookings institution, and center for technology innovation. Its a pleasure to welcome everyone here. Were here for an unusual event. Were actually here for a birthday party. Its not often that people gather that places like brookings to celebrate a piece of legislation and more than celebrate, to take a pretty broad and deep look at where weve been and perhaps where we may be going with a piece of legislation known as the Communications Act of 1934. For those of you who do a little math, 1934, plus 80, equals 2014. So were talking about an 80yearold piece of legislation. Let me just do a few quick ground rules for our discussion today. First of all were not going to have any formal presentations. Were going to have a Good Spirited conversation, and then there will be ample time for q and a afterwards when we have q a, if everyone will just identify who you are, and if youre associated with an organization, that will be helpful. Well have people with microphones, as well, and if youll just wait until a microphone is at your side, it will be a lot easier. Many of you know that were live now on cspan3. And so, welcome to that audience, as well. In addition, because we are in the age of social media, we do have a hashtag, which is comm act, commact. And for those of you who are here or elsewhere tweeting this out would be great. For those of you who will not be tweeting it out, we would appreciate if you would silence or turn off your cell phones or other devices. So let me set the stage a little bit, and probably the easiest way is also to begin to introduce our very esteemed pant today. On my far right here is bob litan. Bob has a very long and distinguished history as an economist and lawyer here in washington, including a very long and distinguished history here in brookings, where he was Vice President and director of economic studies. Bob also has served in the Justice Department as Principle Deputy assistant attorney general in the antitrust division. And the office of just have seen the announcement, bob is the author of a terrific new book which is called trillion dollar economist, which is published by Bloomberg Press and is Available Online and presumably in book stores right now. Rob mcdowell in the middle has a long and distinguished history as well. Most recently, sevenyear service as commissioner and the senior commissioner of the federal Communications Commission. Rob is now a partner at wylie ryan, which is one of the great law firms in washington and particularly, one of the Great Communications law firms and a pleasure for rob to be here. Rob also has the distinction of having been nominated and confirmed on a bipartisan basis under two different president s, george w. Bush and barack obama. So i think he has a very interesting perspective, clearly as a republican appointee, but also with an appointment of the democratic president. And then larry irving. Larry was formerly under the Clinton Administration, the administrator of the National Telecommunications and information administration, my old agency. He also had many other titles that attached to that, including assistant secretary of commerce for communications and information. Larry also has an extensive portfolio on the hill. Prior to ntia, larry was the senior counsel at the house telecommunication and finance subcommittee. And so, with these three panelists and a little bit of myself, i think we span executive branch, legislative branch, we dont span the courts, obviously, and obviously, the fcc as well. Newton minnow was the chairman of the fcc for a relatively short period of time, 27 month, beginning the kennedy administration, but many things happen, including the first major amendment to the Communications Act of 1934, which we will talk a little bit about afterwards, which is the Communication Satellite act of 1962. Newt reminded me that even though today, we look at the Communications Act as a major piece of legislation thats attached to the new deal, at the time that it was formulated, it was really considered a minor piece of legislation and here is some of the major pieces of legislation that were being formulated at the same time. We had in 1934, we had the farm mortgage foreclosure act, the civil works emergency relief act, and the gold preserve act and of course the securities and exchange act. So as you know, new deal brought us out of the depression and really what was on americas mind at that point was how to revive the economy and communications was not really a central part of our economy at that point and so, it was an act, as we will talk about, that essentially was built upon the foundation of prior legislation, legislation that really started in the 1800s with the interstate commerce act in the late 1800s and then later on, an amendment to that called the mannelkins act in 1910. A little history, sounds quite ancient. Why dont we at least fast forward to 1934 and begin to talk a little bit about the original intent of the act. What was the act trying to do when it was formulated . I guess i will take a shot. Do you remember . Seems like yesterday. I was right there franklin and i no. It was a housekeeping act. You had telecommunication. Long and distinguished about these guys, not about me, a little bit [ inaudible ] Commerce Department and most folks dont realize that most of the work done at the Commerce Department, a small agency called the federal Radio Commission and what this act basically did was take some of the responsibility that was resided in the Commerce Department, some of the responsibility that resided in the federal Radio Commission and pull them together. One of the interesting things is that, there was an assumption, in the 30s, this was going to be a natural monopoly. We were dealing with a scarce resource, monopolistic resource and seen needed to be somebody to make sure the big players really didnt face competition played fair. That was really what it was about, take the radio industry was nascent. An interesting fact at one point, there was a conversation about taking 25 of the broadcast spectrum, on pbs, on board and look at this, broadcast spectrum was at one point earmarked for educational purposes, the commercial broadcasting industry fought that off, instead, got a Public Interest responsibility instead of having 25 go to nonprofit educational purposes. Nobody in 1934 looked at communication the way we look at it now and no thought it would be onesixth of our economy. I will take off on the word monopoly. Two words to keep in mind when you think about 1934, monopoly is one of them, actually, there were two monopolies, then, at t and then, well, when we talk about monopoly, monopoly implies scarcity, we had radio. Didnt have tv yet. I will get to that in a minute. We thought in terms of monopoly and scarcity, sort of, as i said, two parts of two sides of one coin and the other thing, of course, that was fundamental, 1934, is the word anna log, all right . And cause we want to set this up for how the world has changed since 1934. But if you think about the predicate of 1934 and what happened afterwards, we get to satellite,et, essentially, larrys right, that the federal Radio Commission became the fcc and then the fcc morphed into taking on more and more responsibility as we had other forms of communication. So, we got tv. We got satellites. We got mobile telephony. As each of the new technologies came along, the fcc, as i view it, developed departments for each one of them. And they were all separate silos. It was all useful to think of them as separate silos. A world of anna log, the waves oo world a world of analogue the waves sort of interchangeable. They are all sort of separate. It made sense to have separate things. I dont want to preempt the discussion, we will talk about what changed since then, you can see how different that world was then than it is now. And we will talk about whats changed since. So building on that, absolutely right. It was very, very different and back to a monopoly point. You did have the old at t agreeing to actually protection for its monopoly in exchange for what we call the universal service. That is to make Telephone Service available at reasonable rates upon request and also to build out, the telephone was still a relatively new technology and mainly the of a fluent and urban and suburban areas, not that there were any suburban areas then, mainly the main subscribers of that. So, how do you have that technology proliferate and there was some competition issues and excluding competitors and in exchange for being able to have a monopoly and not be subject to the trust busters, you can take shelter in being a regulated monopoly. That was part of the impetus and political compromise for the 1934 act and then theres what i think is sort of a fiction of spectrum scarcity, back then, only am radio, my father, who grew up in the tex mex border in delrio, texas, used to tell stories of just across the border in via kuhn ya, mexico, there was a 1 millionwatt radio station, again, all a. M. , dr. Brinkley, the notorious dr. Brinkley, his signal could reach over a huge swath of the u. S. And that was his audience, but there wasnt any regulation of that and the screen doors across the river in delrio, texas, would vibrate with the energy from that radio station. There were legitimate Spectrum Management issues, a question which we could develop into Going Forward, what was the role of the fcc Going Forward . Need an independent agency manage that or could that be managed by the executive branch for spectrum allocation, a topic to tee up. But those were a couple of the motivations behind the 1934 act and things have changed completely and those silos that you just pointed out still exist in terms of the regulatory landscape, but for technology in the market and especially, most importantly consumers, those silos dont exist and the law should be updated to reflect that. One thing about how much the world has changed. Franklin roosevelt suggested the federal Communications Commission in february, 1934. By june of 1934, it was out of both house and by july 11th, the act took effect completely across the nation. You cant get a hearing in six months now in washington. And they passed an entire bill, which gives you a sense of, one, relatively importance and two how much more gridlock there is today in washington than there is when they were looking at this legislation. And one party rule. One party rule. The democrats, miss those days. Also interesting about this mannelkins act in 1910, again, google it or look it up. The mannelkins act essentially gave for the first Time Authority of the interstate Commerce Commission to regulate telephony and telegraph and from 1910 until 1934, that authority was not at the federal Radio Commission, it was not part of the federal radio act, but telephony and telegraph were considered separate media which were regulated by an entirely differents, the icc, which essentially regulated rail carriage and rail transportation. And so, a lot of our notions of common carriage essentially were rooted in this notion of the icc and part of what the Communications Act of 1934 did was to bring together the notions of telephony and telegraph at that point and to marry them with notions of mass media, principally with radio. So, we essentially had two different acts which were combined, put together and we had the federal Radio Commission then morph into the federal Communications Commission and the fcc was then given the authority to regulate telephony as well as broadcast and spectrumrelated media. Part of it, looking back at the history, is that the icc had very little confidence and was quite frustrated because they wanted to really focus on the railroads and all of a sudden, they had cases dealing with telephony and telegraphs and the staff and the commissioners really felt uncomfortable. This was not their zone of expertise. And so, they were very supportive of taking that function and moving it out and thats essentially how those two functions got combined into these sigh these we are talking about in the Communications Act. One footnote. So the icc, just to tee up a later discussion, probably none of you people will remember, the icc is gone, okay . We are going to be talking about the future of the icc. It doesnt exist anymore, all right . And i worked on the Clinton Administration. And two cheers all in my book, by the way, trillion dollar economist, talked about what happened in the icc, how it grew up and then its demise and people dont realize that it was the Carter Administration that killed it. They all think that you know, Reagan Administration came on and killed off a lot of regulation, carter was responsible for Airline Deregulation and trucking deregulation and rail. Rail. And ray. Worked. It all worked, all right . And the icc in between the time right after time that they got ahold of telecommunications, along come trucks, you know, in the 1930s and they ended up with trucks. And, you know, in retrospect, shouldnt have had anything and we finally got rid of it all. So i mean, thats just that will sort of give you an indication where im going to be talking about, the future of the fcc later on they dont they think ld regulation worked, talk about that at another brookings event, airline regulation, not quite so much. More people can fly now. If you adjust for consumer price, Airline Deregulation has worked, i agree with you, a lot of airlines suck, but that is not because flying sucks, i just was on an airplane yesterday. I know this is going to be tweeted now. No but that line. A lot of people dont like airlines. And its important to talk about this, because people will say, oh, my god, if you do it for if you do this for communications, look what happened to airlines. I think a lot of what happened to the airlines since, first people misperceived, said rates havent come down, but the planes are all full because they are like buses, okay . But people dont remember the back in the old days, planes were 60 full, all right . And it was a tremendous economic waste. And it was a disaster, all right . And i think the Justice Department probably has allowed too many mergers, all right . And as a result, we have too much consolidation, but that is not deregulations fault. I just wanted to get that in. Remember, the name of the book is. Trillion dollar economist and read all about this in chapter nine and communications i think is in chapter 11. Shameless plug. Shameless plug. Ron mcdowell shows up at the fcc, having been confirmed and presumably has in his breast pocket a copy of the of the Communications Act and he sees in there tattooed. Sees the phrase public convenience, interest or necessity. Interestingly in the communication act itself, different formulation, sometimes done in a conjunctive Public Interest, convenience and necessity, sometimes in the alternative public convenience or necessity but most legislative historians say that that basically really didnt make much of a difference. The key interest here is Public Interest convenience and then the word necessity. When you came to the fcc and looked at those words and realized you and your fellow commissioners now had the authority to implement the act, what did that mean to you yeah, so and this is a point of philosophical debate, which is probably why youre asking the question. There are those who think because Public Interest appears 112 times, whatever the numbers in the act and my dear friend and former colleague, commissioner michael cops knows the exact number, has it memorized, doesnt mean there respect other words in the communication act as well, doesnt mean unbridled authority fcc to regulate that space willynilly as he sees fit. All too on the, Public Interest, what does it mean . Whatever a majority of the Commission Says it means, that goes to court and the courts decide what it many. So, you know, theres the Communications Act and then volumes and volumes of the fcc record, its decision and even more automatics and volumes of court volumes, trying to interpret what the fcc says, a lot of volumes in the Communications Act of 34, cable acts, all the rest, and theres a lot more to it than that, but it lit really lay does mean essentially whatever majority of the Commission Says it means, unless its restricted by the courts or other explicit language in the act. And thats where it becomes dicey and that doesnt necessarily serve the Public Interest well, when its expansive. You can have unintended consequences by broadly applied and broadly written rules and you can squelch innovation, very hard to measure what innovations are not coming to market, what are not going to end up in the hands of consumers based on the unintended consequences of regulation. Rather seen a rewrite, turn the telescope around, look at all this through the consumers perspective. Is there a harm, caused by a concentration and abuse of market power rather than the legacy of the technology you use, which we can talk about in a minute and other things that are woven into that act. I had the fortune of being in the administration, involved in the 84 cable act and the 1992 cable act. Other than that you havent done much. Havent done anything since then. You havent done anything. Let me just interject here. Larry has a long and distinguished career. Im old we looked at permutations going after the public convenience and necessity. The problem is there really if you go to a straight economic test or consumer harm test, you leave out lots of things. One of the things im proudest of is we wrote the eeo rules for the Cable Television industry, cable and Television Industry was one of the least Diverse Industries until the 1984 act. 1984, we put in eeo regulations, it became one of the most Diverse Communications industries and the peg which we hung it Public Interest convenience and necessity. I dont know how would you have done it otherwise or withstood Court Analysis if we didnt have came from congress. That came from congress. Director from congress. But we looked at the Public Interest, referring back to other court case, looking back at what the court also said and we peg it had onto the Public Interest standard. Pulled out the Public Interest standard, we would have had a lot fewer hooks to hang the kind of eeo regulations. There are lots of time having the flexibility, you want to find ways to make the Public Interest stan clearer and less subject. Mark fowler, chairman of the fcc under president reagan said the Public Interest, whatever interest the public, we dont need to regulate, that was pretty much his theory. Dont want to have these huge swings but we havent found a formulation that works well and gives the commission the ability to look at new technologies and new innovation and say okay, we want to shift this way, while not going so far throughout the point that we strangled innovation and trying to find that balance is hard. The public incentives work pretty well, straight economic test would frighten me that we would be hamstringing the commission too much if we didnt give them some flexibility beyond a strict consumer harm test a lot of consumer harm already been harmed then you gotten a aftereffect rather than trying to be in front of some of these innovations and opening up some ways for companies to do things they would like to do. This language, bay the way, is probably the first example of cut and paste in the history, because it was in the interstate commerce act of 1887 and senator dale, who was the principal author of the communication act in 1934 was actually asked, why did you put Public Interest, convenience and necessity in there . There is no legislative history, so, as rob and larry and i know bob agrees with this, it is a phrase that basically you divine meaning out of on a continual basis and some extent, you do that as a prophylactic in terms of judicial review, but there, in fact, was no underlying meaning, it was basically a phrase that was taken from an 1887 act of congress, interstate commerce act, and it was exported and then pasted into the Communications Act. Actually, even going back further barks to be 17th century canal regulation and regulation of inn keepers and other common carriers in that regard, too, public convenience and necessity language. Absolutely. Way back into european regulation. But bob lighten, you sat in the Justice Department for a number of years. Did this all seem sort of peculiar or strange to you, given, you know, given your perspective, looking at this through a little different lens, principally through the lens of sherman antitrust fact and to some extent, the clayton act and these were separate pieces of legislation, which also have had a major impact on the structure and the implementation of communications . So, just to demonstrate how ancient i am, so i was there in clinton, 93 96, how larry and i became good friends. We were meeting with each other almost every week about what became the 1996 telecom act and at the same time, we in justice were responsible for administering something that none of you will recall, the at t consent decree. This government breakup of at t and at ts children, the regional bell operating companies, which have since merged, only several of them left, they haul to go to court basically, wanted to do something new, they had to get the District Court to sign off and we at the Justice Department had to weigh in. And so the big debate at the time, in the 90s, there were two big things that concern us at justice. One is the local companies, the regional bell operating won in the Long Distance and ameritech, the most ambitious of these companies and we were negotiating with them about the conditions under which they could do this. Eventually, that was all made irrelevant by the telecom act. And then the second thing that was emerging, we had no idea, in act if a, we were talking about this before coming up here the one thing in retrospect i dont think any of us anticipated is the extent to which cable and the Telephone Companies would go at each others throats. At the time, one of the purposes of getting the 96 act was to allow them to compete in each others business but i dont think a lot of us felt that they would really be as, aggressive as they were going to be. This was nice in theory. And i think the Vice President plug it had when he talked about in his speeches or whatever, but in retrospect, after the Telephone Companies were freed of the obligation of sharing their lines with the local upstarts, what happened after that in the 1980s is that cable and telcos went after each other, hammer and tong, and started out what became the Broadband Networks you have today. I think if you asked any 1995 would they have been as, aggressive competitors, i would have said no and it turns out, they were. Whats interesting about that, one of the things thats interesting is rob has spent a lot of time with the competitive car yes, i was on the board of a competitive carrier. The fight in the 90s was more about anything else about Long Distance. Nobody thinks about Long Distance anymore. Long distance this huge revenue opportunity and why you have to have a bit of flexibility as smart as we were, people said this a million times, the 96 act contains the word internet one time. We try to think of the internet and title vii. Somebody will write a book about the late lamented title vii. The Clinton Administration was trying to come up a regulatory method of looking at the internet that wasnt going to be title ii, iii or vi. It wasnt cable, wasnt broadcasting, wasnt old telephony and the antitrust department and the Commerce Department and some smart folks at the fcc and various parts of cea, the white house, all sat down and said, whats the right way to regulate this new thing coming on . We took it up to the hill and people like the internet, the thing with tubes, right . 1995, 96, a coherent conversation with a member of congress, other than my boss, ed mar kirk might have been whistling in the wind. The point im trying to make, three years later, all the investment being made was being made by companies because of that encouragement to internet and data and an entirely new way of looking at things and yet we spend untold thousands of hours and untold millions of dollars talking about that issue here in washington, and three years later, almost everything we did was almost important, nobody thinks about a Long Distance call, today, the aim of the people sitting in the front room, i thought what time is it and where am i calling and what day of the week it is you pick up your phone, make a phone call, you dont even think about that, 20 years ago, making decisions based upon the economic consequence of Long Distance tell phones. I think thats an excellent point by the way for just people looking at Public Policy objectively is that the best and the brightest in 1996 thought it was all about voice yes, all about voice and Long Distance was the big fruit, the incentive for the local phone companies at the time, the baby bells and what would they give up for that. And then there became the issues of unbundling and just 10, 10 1 2 years ago, no the that long ago, that was still the fight of whats gonna happen with residential voice and we needed to unbundle something called the Bundle Network element platform and for my farmer, jack griffin watching, basically an economic regulation of the last mile wire into the home and would there be competition in residential voice, all with a wire line mentality, not thinking about cable telephony, which was actually on the rise at that point, cable modem being sort of the first real sort of broadband to the home. And then cable telephony not far behind and voice over internet over the top, like a vonagetype service. All that was coming, but the best and the brightest didnt see that or how it would affect Public Policy in the market and benefit consumers and then, something i hope we can talk about here in a minute, the rise of wireless. So, now, most homes quickly, most homes will be wireless only, wireless broadband is the Fastest Growing segment of the broadband market, low income and minority users being the Fastest Growing segment and being better early adopters than white, affluent suburbs, a wonderful story to tell. Nobody in the Public Policy arena predicted this, nobody that i talked to anyway. These are positive stories, before the fact regulation, its very difficult for regulators to get it right, frequently, they dont. I have a ben on both sides, being a regulator around an advocate. Frequently, they dont and people cant see whats coming next. And even industry bets are wrong, right . So theres some bright, bright people and smart investors who bet wrong every day and industry and some who get lucky or good and bet right. So, keep that in mind, talking about Public Policy, which you just cant envision, ten years ago, it was a completely different debate, which now seems like ancient history, seems like we are talking about stone tablets and chisels, you talk about Long Distance and youre right, calling your grandmother on her birthday, better be on a sunday and you pass the phone around quickly, which was wired into your wall, if anyones watching mad men or other shows of that era, and it was very, very expensive and now give ay, vwa iy expensive a now give away, it is free. Just add two quick things about difficulty, not only in washington, we cant see things, also really smart, rich people in this thing. One example bill gates, famous memo in the 90s. 1995. Said we missed the internet and led to an antitrust case against microsoft, caught on quick. Last night, i was watching an interview with steve balmer on charlie rose and steve balmer openly admitted that his biggest mistake at microsoft was not going into hardware. He said we are microsoft. We are operating. Paul allen wanted them to be in hardware. As rich as microsoft is, big company, big guy, rich people, famous people, smart people, they missed it, too. The mystery of capitalism. One other great example missing, robert e. Lee, commissioner at the s. E. C. , in the 80s, i was on the hill, said with regard to cellular telephony, 1978, 79, what a frivolous waste of spectrum people use it for telephone calls. A sitting commissioner of the fcc, not even 40 years ago. Commissioner lee, not trying to disparage him, folks at at t saying, and i think in the 60s, never get within 100,000 cellular phone, cellular phone this size and gonna cost you, 20 a minute, yeah, 100,000 of them. This size and you know, 700 million and basically, you know, 60 a month unlimited, gonna get 7 billion of them. The way it works. Nobody predicted that even the inventor of the cell phone, marty cooper, admits freely, such a wonderful fellow, no idea what was coming. Why this factor, 1934. In 1934, they didnt worry about are we predicting the future, going against the market right in the future . Are these technologies . What they basically said is we are going to create an agency and an agency is going to have expertise and be reviewable by courts so there will be checks and balances. So Congress Really did not take a very active role in the way we are talk in the 90s certainly Going Forward, there is much more of this idea of whether or not legislation should have a Predictive Value what if you dont get it right, obviously, number of examples about that. But back in 1934, that wasnt the name of the game at all. The name of the game was let us basically import some aspects of other pieces of legislation. Lets combine radio and telephony, put them under the aegis of a simple agency. Lets appoint originally seven commissioners who will be nominated by the president on a bipartisan basis. One will be designated the chairman and those people and obviously, the bureaus and the staff will essentially be in charge of developing that inbred expertise about predicting the future, operating in the environment. So, rob, i wanted to just get a sense, since you obviously sat in that position for a number of years, from from sort of an operational standpoint, i mean, do you think the fcc or an agency like that has fulfilled the function of developing that level of expertise or is it sort of an Impossible Task because no ones sitting in washington essentially can understand all those parameters . Yes, to your core question, which is theres a lot of expertise at the fcc. I want to give a shoutout to my former colleagues there. 1600 of them, engineers, economists, lawyers, plenty of those. And other professionals. And who are very dedicated Public Servants and do their job very well. That doesnt mean the policy calls are always right. But it is a tremendous agency. By the way, for those of you wondering, the fcc makes money for the american taxpayer through spectrum auctions and administrative fees and a net gain. But its impossible to as we have just been discussing, to guess where the market is going. And i know the term Net Neutrality will come up, let me be the first to use that term. In that debate, and we dont have to get sidetracked on that, i know we are not talking about that as much today, in that debate, going to be a problem, if the fcc is the dog that catches the bus and wants to have jurisdiction over that space, it is going to find it which becomes mother may i permission seeking and in the dynamic internet space when there are amazing Success Stories and another Success Story to . Snuff out competitors quickly, very difficult for the s. E. C. To stay ahead, nor should it, in my view. You know, Going Forward, i think if we have a tell come rewrite, certainly, i was there with chairman upton and chairman walden about ten months ago when they launched that effort to examine it solicit white papers and ideas, some people in this room submitted a few, thats good very good exercise to have. The act is 18, 19 years old now, a lot changed, let alone since 1934 and only very minor amendments to it like the spectrum act of 2012 and some others. Good bill, big bipartisan bill, by the way, have to reeks am minute it for the silos, oops, i throw my pep ought, the silos that were just thank you, just discussed in terms of what we didnt talk about in 1934 about 1934, different titles regulate based on the different types of Technology Used at the time, title two is corps based, copper based, analogue, when the telephone operators had the manual switch boards and head phones and it was switch only. With now a number of components to it, you have over the air broadcast, satellite, mobile, you know, Wireless Services as well, you have title vi is coaxial cable or Video Service and now, you know, the consumers demanding a convergence, the number one screen, my kids, ages 7 through 13 is there mobile screen in. This is changing everything, whims, we have huge leaps in developments in wireless, spectral efficiency and developments in wireless, youre going to see so much more disruption between licensed and unlicensed uses of wireless. A phenomenal time to be not just a consumer of content but information and consumers being generators of contempt and information. The barriers to entry are the lowest in Human History and literally change willing the world and improving the human condition around the world. None of this was envisioned in 1934 and very little in 1996. That wasnt that long ago, back when my hair was black. If is time to rethink this, federal spectrum, federal government occupying maybe 80 by some estimates, the best spectrum and what can we do to get the federal government to relinquish the spectrum, something secretary irving knows a lot b know a bit about your days back in the commerce. Larry, you were there, obviously, all there in 96, larry was one of the principal architects of the telecom act and clearly, come also from the hill, so had a real sensitivity in terms of congress. Maybe talk a little bit about the early days of thinking about revising the communication act of 1934 in probably the most dramatic way its been done since, which is the telecom act of 96. Coming from the hill, what were some of the things that the hill was concerned about and how do you begin to think about that in terms of being in an administration, obviously developing policy, with i then could be implemented by an independent agency . If you look at the hill and youre a historian at all, look at how things work, 1934 to 1954, 56, television and radio changed a little bit but relatively little change to the communication ability and then court cases, technology started accelerating. Basically, the fcc in my opinion, was really doing right in the 40s and 50s was universal service, a core principle what do we need to do to make sure people have tell phones and then true monopoly in those days, that rates were fair. The 60s and 70s, cases we wont get into, computer one, computer two, lots of things in terms of new technologies, how we connect to the network, what we were trying to do in 96 was stay in front of technological change. And what we also trying to do make sure that we understood the Important Role of the Justice Department and want it to be a role in the Justice Department but make sure that innovators and plane news find innovation, not fiats. We believe the days of natural monopoly were over. Believe that innovation was going to rise, not recede. And when i think most members of the hill wanted to protect consumers, promote competition, direct investment and get a lot more innovation into things we thought were going to other people. We were right on most of those instances, we were wrong as to,would happen, but what we wanted to do was, you know, if you think about the 96 act one way, from 1996 was day we have seen between 1. 2 and 1. 5 trillion of investment in our infrastructure and seeing this between 60 to 100 million billion dollars every year going to our infrastructure. Most of that was unleashed because we did some things with deregulatory and we did believe that competition and dual or trimodal competition was going to be more beneficial, that was not where we were in when i got on the hill in 1982, 83. We kind of saw be this aisle of broadcasting, be this aisle of cable and be this aisle of telephony. And many people would receive Telephone Service at home over their cable system or the companies would be wireless competitors as much as wire line competitors or the Television Systems would have the spectrum all of a sudden try to sell and do other things within and make more efficient use because 90 of americans receive television from something other than overtheair broadcast signal and trust me, most people in this room, when i got a television, over rabbit ears attached to my television set. Even if you look at cable, look at the last three weeks, announcement, whats happening with netflix and their stock going up, hbo saying we are going to go extra cable and go over the top and then cbs over the top again, five years, i bet you the media landscape will be markedly different than it is now. How, i cant tell you. But i know i watch more television on my ipad than i do on my television at home, mostly because im on the road. If i want to catch one Downton Abbey and pbs, give you a plug, starting again in january, more than likely to see it here when i want to and nobody in this room believes thursday at 8 00 to turn on cosby, racing home to see Appointment Television is completely dead. I saw jane the virgin, another great show, starring a young latina, a hit with 1. 8 million, 1. 8 Million Viewers thats a hit. 1. 8 million would not have kept you on for 1. 8 online and television, 1. 8 million. Across 1. 8 wouldnt have got you would have been canceled the day after you got a 1. 8 million share, but now, thats enough. The economics are changing and regulate verse to figure out twice not stifle that change but give consumers what they want, which is more of that change. Can i be brief . And just radical. I want to be radical. Get the conversation going, if you want to ask how if i were king for a day and rewrite the communication act, i would have charge i call a very skinny fcc and i realize once it gets to congress that they are going to Christmas Tree and add things to it, but i would start with a very minimalist role for the fcc, recognizing scarcity is gone, that we have digital instead of analog. I have two roles for the fcc, one is they can finish and expand their spectrum options and they run that, okay . Because competition, the more competition, thats good thing. The second thing is i would have them adjudicate disputes over over discrimination by Network Owners in favor of certain content providers, they do this right now for video and i would extend this to broadband. So for example, i will give you an example, comcast owns nbc. If comcast is favoring some of nbcs rivals, all right, because they own nbc, thats not right, all right . These an abuse of their discriminating. Thats Unlawful Discrimination and the fcc now has power to stop that. You could stop that same kind of thing in the internet world, all right, where you have, you know, take cup of the broadband providers and discriminating in favor of certain content, and let say, for example, they offer a 15megabit package and they are discriminating against certain sites based on the certain speed and i would have them administratively stop discrimination. End of statement. Thats it all right. So, basically, in my fcc, they have Something Like 1700 people that work for them now, i think borderline, all right . I could give them a report writing function to sort of, you know, tell us about the future of communication and all that. I mean, we are talking about several hundred people. And i dont think we need big fcc anymore. 600 lawyers . Whatever. We dont need these people. Larry will pile on, add these things. I will start this. Im gonna start there and thats how i rewrite the act. Can i dove tail into that real quick . Actually, you know, with discrimination, as you say anticompetitive discrimination, discrimination is a loaded term means Different Things in different contexts, Network Engineers actually necessary if you want that movie youre downloading to be uninterrupted and unartifacted and unfrozen. That would be frozen. Voice bits and email bits arent thats discrimination, you like that right . Thats the good kind. But federal trade commission, let me put a plug in for them, first of all, like to point people to some of the speeches even keeled. Even keeled, speeches, articles and stuff theyve written. The federal trade commission actually prevent that type of discrimination from happening in an anticompetitive way in favor of its own content. And the content of others. The mantra, there are laws already on the books that exist that deter that behavior and would cure it if it actually ever happened. And its not happening. Not happening in any kind of systemic market failure way. The trial lawyers would have a field day with the contract, all sorts of state attorneys general. Theres a whole arsenal, a huge quiver of legal arrows that would be launched against Internet Service providers if they wanted to go in that direction. So keep that in mind. You cant do it under section 5 of the federal trade commission act. By the way, back to the point is expost, or after the fact regulation to slow. Federal trade commission operates pretty much all the rest of the economy, not quite all the rest. Certainly complex areas, dynamic areas whether its software, internet search, things of that nature. Its there. And, you know, operating systems and all the rest. And manages that actually, those sectors of our economy are the best in the world have been and will be so for years to come. Can i interject one quick thing and let you get back. Im going to be very clear and ill respond to section 5 in a minute. The only reason i would keep the fcc involved in this, they do a lot of Different Industries, telecoms not one of them. The Justice Department and the ftc split jurisdiction and telecom is a Justice Department function. The only reason i would give it an administrative role, it would be quicker, i think, to do it than having a bigger investigation. I wanted to get that point in there. You could do it under section 5. I like that concession. No, i could see. No, i could concede that, but i would still and one final thing and ill shut up. I want to make clear i get the fcc and a merger review, back to the Public Interest standard. I give that to the Justice Department. There is no reason why in my opinion we single out the Telecom Industry for special antitrust review and have joint jurisdiction between the Justice Department and the fcc. Now, i recognize theres joint jurisdiction in the banking industry, id get rid of that, too. Theres joint jurisdiction in the transportation industry, id get rid of that, too. Even the ftc or the Justice Department reviews, they review the antitrust implications of mergers. Lets follow that principle. And lets try to streamline our government. And real quick on the substantive expertise, which is ftc learns and evolves over time. And the definition of what is telecom and communications. Especially with marriage connectivity and content is becoming the lines are blurring. From the consumers perspective, the lines are already blurred. That doesnt take any network engineering, some of it, but its easily understandable. And they could take the engineers and hire them from the ftc. Yeah. Okay. So im going to be the contrarian on this one. I dont believe that we necessarily need all the functions that the fcc has. And well have a conversation Going Forward about what is needed and what isnt. Communications weve been seeing is different. Im a Communications Lawyer and started out as a communication lawyer. But most of my life i dont want it to be just a straight economic test as i dont know all the things were doing now we need to do, but a straight economic test, communication it is the life blood of democracy. And there are many instances that policy have been made by the fcc during merger review that had beneficial impact on the nation. And weve got to weigh those things. But when you get the ftc and all you have is spectrum and discrimination. Spectrum management has still got to be done. Universal service. Are we going to leave universal service . Red lining is when you were born poor and in the projects, and running around this country and seeing whats happening with regard to africanamericans, native americans, latinos, with regard to service. Red lining is very real. We have a situation right now in terms of our universal Service Program who pays into them. And you have to think about that hard. Major companies talking about the beneficial benefits impact of networks that have yet to serve a community that has more than 10 black people. How does that happen . Everybody runs around applauding google fiber. I have issues. I was waiting for the first time i was in harvard. Brownsville, new york, or brownsville, texas. Come there. Any brownsville you want to, pick a brownsville, well be happy to see you come. And we have to have these kinds of robust conversations about who serves, who pays, how do we make sure that the system is equitable . And we do we do need to make sure that were looking at communications as different than widgets. That was a conversation we had in the 80s, in the 90s. Theyre very Different Things. I want a strict antitrust with regard to which widgets being manufactured. When youre talking about ideas, currency, how many people involved in this as possible and innovation as free flowing as possible, you need a little bit more. Do we have too much regulation now . I could make some arguments. Ive seen some things done that are a little bit unnecessary. I had a huge problem a minute ago we were talking about the fcc brings money back to the to the treasury. Back in the 90s, i was a lone voice saying, hey, look, we should never have budget drive policy. And we were so concerned about the options of driving revenue, we werent looking at the policies and were we doing the right things in terms of how were getting the speck truck out into the marketplace making sure policy implications were involved in the discussions. When we had a huge budget deficit, the only thing people were worried about, can we get that spectrum out . And as a steward of the federal government spectrum, i wanted to make sure that national security, aviation, that other things were met. Now, federal government has way too much spectrum, but lets have a balanced conversation about it. Now were going to spectrum sharing. The fcc has a role in spectrum sharing. Whats that going to look like . So there are lots of pieces to this fcc puzzle, gets most of them right. We need some tweaking. But lets go back to kind of first principles. National security, universal service, diversity of voices, competition. If we can come up with fcc that works for all of us. Im concerned that the antitrust analysis would be too would take some of the whats the word . Some of the discretion out of their hands. And i think a little bit policy poorer for that. Just a quick point in support of a skinny fcc idea, which is if you look at the innovation, lets say the past ten years or so, where does it come from . Its come from the least regulated parts of the industry. So, again, lets look at smartphones, the app industry. Those are the least regulated, right . And thats where the most innovation and investment has been and where the most consumer benefit has been and where consumers are stampeding to enjoy it. So the world is different from how it was ten years ago, 20 years ago or 80 years ago in the 1934 act. Its much more dynamic. Wireless is changing that equation dramatically. And so i think we need to take a step back from the social engineering or the industrial policy Public Interest type standard here and kind of let the market go. Youve had more democratization not because of any industrial policy or government plan other than getting more spectrum in the marketplace, but in 2005, people werent talking about the app economy. People didnt know what apps were really then. So, it was post 2007 in a deregulated sector of the economy that has done more to help lowincome areas get Internet Access at a high speed and really revolutionize their lives with new apps and access to information. If you look at the structure about wireless industry, the fcc made very important calls and choices in terms of level of competition were going to have in being an Expert Agency that only it could make. And we would not have the level of competition, innovation, not had the level of investment, but for some calls the fcc made with regard to the wireless industry. I dont disagree they had a role. But the expertise to drive the level of competition. And the pace of innovation that the fcc has. You know, we all talk about coopers law, and most of you heard about but very few heard about coopers law. Who was a genius and somebody we should all know. Morris law is that every 18 months we double the Processing Power at about the same cost. Every, i think its 24 months, we see a doubling of the spectrum efficiency in our Networks Every 24 months, we get a doubling in spectrum efficiency. If you think about what that means and how important that is. What that means is when you use the cell phone the cell phone you used two years ago was half as efficient as the cell phone you use today. That doesnt just happen magically. Folks want to make investments when they know what the rules of the road are. The rules of the road are consistent and to make sure competitive marketplace. Coopers law is important, but so is competition. And im not sure that just the department of justice in an industry this fast paced would be able to do it. On the other hand, i dont want the regulation to be you want them to as my old boss would say, you want one thats steering, not rowing. The runners are running and someone else is making sure when the gun goes off, nobodys cheating. And somebody, you know, the stopwatch at the end of the race. Those are the kind of rules government should play, but no rules for the fcc. Id have to catch we want to give him enough to do to justify that salary. Okay. I wanted to pick up what larry said, which is communications is special and different and part of it is because it promotes an exchange of ideas and conversation. Weve had a spirited conversation here, but we would now like you to join. So for anyone who has a question, if you just identify yourself and also indicate, i want to get as many questions as possible. Please frame whatever youre going to say as a question rather than a speech or commentary or anything else. And we have a couple of people from brookings who will have microphones. And i will identify the people who will be called on and then well proceed from there. So like jeopardy has to be in a form of a question . You bet. Exactly. Whats in the form of a question, stewart. Okay. First question. Youve answered every oh, there we go. Right over here. Thank you very much for this program, and thank you for the comments so far. My question is sorry. I have been in Cyber Security and telecommunications for all of my professional life. What are your thoughts on the role the federal Communications Commission should be playing in Cyber Security for the general consumer . As you know, dhs has that role for Critical Infrastructure the 16 sectors. But i dont know of any agency that really has the responsibility for Cyber Security for the general consumer. Excellent question. Thats a great question. It is a great question. Ill be brief. First of all, the fcc does have actually the creation of a new bureau, which i voted for. Chairman kevin martin, the Homeland Security bureau. But after 9 11 and also hurricane katrina, it became very apparent that fcc needed at least a formalized coordinating body between other Government Agencies, federal, state and local as well as industry and consumers to help facilitate, Public Safety and Homeland Security issues. By the way, the fcc manages the spectrum for Public Safety. Governmental but not what the department of commerce does. So, my personal view is that while the fcc can provide sort of a backup singer role to Cyber Security to advise agencies on how things work, et cetera, that there are a lot of Government Agencies already in the Cyber Security space. And its not, still in my view, not very well coordinated. And we have some big holes. And some day, i think there will be a Cyber Security pearl harbor, whether its from a nation state or just a lone wolf. So, im not sure the fcc is really equipped, its not big enough. Doesnt have that sort of expertise, probably dhs, in my view, would be the best place for that. That was part of its job when it was chartered after 9 11. But i dont think the fcc should have a lead dog role in that but certainly should be part of the broader chorus to help with it. I would think there is a portion that has to be at the fcc because they do have subject matter expertise. I serve on some energy boards, we do need a coordinated effort, across government on Cyber Security because we get millions of pings a day, folks trying to come to our network of our most Critical Infrastructure. Whether its water, bridges, transportation, telecommunications. And no one agency can handle that, not even for consumers. To robs point, we need to be vigilant. If you know as much as he knows and i know about whats happening in terms of pings, you dont sleep well at night wondering what may happen. Can i ask you a question . To use the word, the fourletter word everybodys using in washington, do we need a czar in this area . You asking him or me . Both of you. Ill shy away from the term czar. You do need someone with the accountability and the responsibility. And if thats the coordination of a lot of different agencies and d. O. D. And dhs and the intelligence agency. Theres a lot of Government Agencies involved. So who is in charge, who has accountability . No one is now. Right. Exactly. I wouldnt call it a czar. Having in 2000, we had dick clark for the y2k issues. And hes an interesting personality. Did a great job making sure everybody was focused 24 hours a dayen o keeping us up thats while producing american bandstand. And new years eve. I dont know it would be a bad idea either. I know a little bit too much. And it does youre only as strong as your weakest point. Some cant make the investment to steel up against hundreds of thousands of pings. People are pinging into our networks to figure out how to get in and get out. Theyre not trying, just doing reconnaissance. And they know a lot more about our networks than we want them to know. And we need to be vigilant. Yes. Right over here. Im brian fung with the washington post. Im brian fung with the washington post. This is interesting. Got a couple of questions, actually. Very short. I was talking to someone yesterday who was telling me that one of the big reasons why the telecon act rewrite happened in 96 was because, you know, there were some concerns with the conditions attached to the at t concept decree back in the 80s. Can you tell me if you read it the same way . And the second question for commissioner mcdowell, you know, are there things, we talked a lot about how there was a failure to predict a lot of things that, you know, technologically took place. Were there things during your tenure at the s. E. C. That you feel like you missed or failed to predict . Ill take the first part of your question on at t. No question, that was one force among many. Because when we were larry and i were meeting. This cable telco thing was also a big deal. All right . That was a big driver. And that was independent of the desire for at t for clarity. All right . So, and also the Regional Operating companies. But its clear that the telephone industry, as larry said, the biggest driver in the 96 act was trying to make a Long Distance market competitive which now today seems antiquated. That was a major force, but cable telco was big. And everybody it was a perfect storm because everybody needed something. You had the cable telco, cable wanting Long Distance on the telco side. Cable telco, broadcasters, other things happening in the 92 cable act were incorporated into this thing. You have consumers that were worried about whether it was going to be anarchy or how were we going to be protected . Everybody wanted something and it was really the perfect time to try legislation. But even in the perfect legislation, bob and i met with our colleagues from 1993 until 1996 every Tuesday Morning for 90 minutes for 40 weeks a year. It took us three years to get that bill through. And 90 minutes of the Vice President of the United States time every Tuesday Morning. And thats what it took to get that kind of a bill through, even with everybody kind of wanting it. So, there were lots of pieces, but there was no player who didnt get something that they thought would be of their benefit. Now, at the end of the day, they all benefitted some and some folks benefitted in ways they never assumed they would. None of us saw the reconsolidation of the bills. None of us saw how important wireless would be. None of us saw that the internet would go from, i think when we started the process, 2 Million People online when we started to to and at 56k, so by the time we got finished 2 Million People on the internet in 1993. By 100 million globally, not just the United States. We couldnt see all that. So there was a lot of cut and paste for peoples own economic benefit. And at the end of the day, the American People benefitted because we got most of it right. And just to do a little historical prequel, the 96 act actually started in 1978. And so there was really an 18year process that began at the point where larry and bob and a number of their colleagues began to meet every day about this. In 1978 congressman van dearman from the san diego district in california announced that he wanted to do an attictobasement rewrite of the 1934 act. And so, as the congressman was the chairman of the subcommittee and he announced this as a top legislative priority. He then got the Carter Administration to agree to support and work with him, and what started was a series of what we call option papers. So these are large books now you can access online, which essentially laid out a variety of different options for rewriting of the act. But the main goal there was to do really a toptobottom rewrite as weve talked about today, most of whats been done since 1934 has been relatively piecemeal. Certainly in 1996 is the most comprehensive rewrite of the act. But it clearly doesnt still qualify as this attictobasement type of legislation. So, one of the questions Going Forward is whether or not a new telecom act or new Communications Act, would it be an attictobasement approach . More of a tweaking approach, would it have some of the elements and the principles that we talked about that were in the telecom act of 1996. Second part. Real quick. So i think the commission, well, i was there for seven years, and so functionally under three chairs, right, and two president s and also two iterations of congress. It was a very interesting time and different dynamics to see. I think the commission in general didnt see the need for more spectrum, what the need would actually be. I think that was something. And also the virtues of some unlicensed use of spectrum. I favor exclusive use licenses overall. But unlicensed wireless carriers can find that they can offload congestion there. And i think thats helpful. Also, though, spectrum policy in general, i think the commission failed to see at first the virtues of what we call flexible use policies of spectrum, which is basically to say users of spectrum, go ahead and use it for whatever you want, provided theres no harmful interference. And thats the prime directive for you star trek fans, no harmful interference to others unless its an unlicensed user but other licensees. So the government over time tried to prescribe what type of uses certain frequencies were best for. Sometimes you do need it. Some are better for satellites. Now over the past few years, we found some satellite spectrum is good for terrestrial broad band. Some could be used for tv. That could also be used for terrestial broad band. Allowing for more flexible use. Over my years, we saw corrections to that. You know, overprescribing in general, in trying to engineer markets as a general matter happens a lot at the fcc. And then markets work around that. Or sometimes, like i said earlier, we dont know what innovations dont come to market, thats something thats almost impossible to measure due to a government policy. So theres a lot there, happy to talk to you more about it offline if youd like. One thing thats making me crazy with the fcc is spectrum sharing. Theres an assumption that spectrum sharing works today. And its difficult to make it work. You have this innovation band that everybody talks about, and yet 60 of the market you cant use innovation band and the spectrum sharing is not working. The technologys not ready yet. The markets not ready yet. And i think its actually holding back innovation. If we could get we need to get more focus on what the federal government ive been saying for six years that we need a real inventory of spectrum uses. And even if you have to make some of it black box and folks of a certain clearance now, you need to know who is using it and when they use it, how much a use it and have a sense of whether or not there are better and higher uses for the American People. We have had an abysmal effort at clearing spectrum at the federal level. And weve had an abysmal effort of making folks really focus. Whats interesting is, from what i hear in the street, the Defense Department is better than most of the other federal agencies, which is also state department, transportation department, faa, whole bunch of folks in there getting that information from them is a very, very difficult process. And, you know, as a guy who used to run that office, i know where some of the bodies are buried. I keep trying to tell folks, you need to get the spectrum inventory. And no one will force that spectrum inventory. Congress hasnt forced it. The white house hasnt forced it. Industry hasnt been able to get them to do it. And i cant for the life of me talking about a 1 trillion plus opportunity, why we cant figure this out. Do you know where jimmy hoffa is buried . Dont know that body. New jersey. Every time cruise does his dance. No. Im an intern here, actually. I want to thank you for coming. I had a question about the app economy. Extremely unregulated at this point. A recent New York Times article said nearly 40 of those working in Silicon Valley thought there was a large bubble in that part of the economy. And with apps like uber and air b b Respective Industries of transit and hotels, a large area that needs some sort of regulation or at least some sort of action. I wondered if the what role the fcc might have in that or other agencies. Thanks. Ill be really quick. So, you know, the great thing about the app economy there are entry barrier is so low. Kids in grade School Writing apps. And great ideas being formulated right now. Theres going to be some brand here in the next four to six months that will ubiquitous that none of us have ever heard of. People are predicting theres a bubble, there might be Certain Companies that have a limited life span based on their business plan. And im not going to comment specifically on those. But i think that will continue to be a very dynamic part of the worldwide economy that brings untold consumer benefits. And there are all sorts of thins we cant even imagine right now. And im very, very excited and bullish and optimistic. And i would agree with that and i dont see a role for regulation. And we can all say the same thing. The concept of the fcc regulating uber or air b b, that keeps me up more than a Cyber Security does. That is a profoundly bad idea. And no Legal Authority to do so. Exactly. Bad idea. I want to talk about the courts because theyve been sort of lurking in all of this. But usually legislation, and particularly what the fcc does, gets reviewed by the courts. And so id be interested in your viewpoints whether or not that balance needs to be changed. Obviously, what weve seen in repeat years and i know rob can tell us from the inside, is a great sensitivity in terms of whether or not a Major Commission decision will essentially be appealed, what happens after the appeal. One question is, in new legislation, should there be a different balance thats struck both in terms of how courts review this right now . In fact, the courts review under a different act, called the administrative procedure act, 1946, which essentially applies to the fcc, but it applies to all independent regulatory agencies and essentially says the agency needs to act in a way that is not arbitrary, capricious or otherwise in accordance with law. Thats the appellate standard thats applied now. But it is applied across the board through this other piece of legislation. Theres no magic. You could have a new Communications Act which essentially says, we will have a new standard for appellate review in this particular area. So id be interested to know a little bit about the balance between the courts and the particular sensitivity, obviously, that the commission has to courts potentially overturning what the commission does. And ill try to be brief. Excellent question, by the way. So, its part of our democratic system. You know, we have three branches of government. One can argue the independent administrative agencies, our fourth branch, and we can argue the constitutionality of that. But thats for the next brookings event. But so you have the legislation regulation litigation cycle. And it seems all lawyered up, by the way, this is an argument against or before the fact regulation, as well because of the time that takes. But it is all part of due process. If you have to distill the apa down to two words, its due process. Was there due process given and abuse of discretion by whatever administrative agency. And thats very, very important. Because these administrative agencies, look, i was an unelected washington bureaucrat. Im a recovering unelected washington bureaucrat. But appointed by the president , confirmed through the senate. But i cant be removed unless through impeachment by the senate and thats never happened at the fcc. So, you can be called before congress and yelled at. They could congress can limit your funding, but it is easy in a way for the fcc to go off its congressional tether. For it to be unbounded. For there to be no fence around the fccs authority. And that becomes oligarchical. S. A. T. Word there. Do you want that . Is that really democratic . Its multi. So you need court review occasionally or all the time maybe to put the fcc or other agencies, executive branches, as well, back in their boxes, and because the authority really lies, should lie under our constitution in the hands of the directly elected representatives of the American People. And thats congress and the president. And thats why when we make new law, Congress Passes a bill, president signs it or vetoes it or Congress Overrides that veto. Its a very important part. It can be very frustrating. As a commissioner, when i was writing concurrences or dissents, i was mindful that somebody was going to appeal this no matter what we do, so lets help the law clerks understand whats going on here. So its part of its part of the process. I know bob has to leave in a couple of minutes. I wanted to at least pose a question we could all talk about before bob departs, which is picking up on what larrys talking about, the perfect storm that helped create the 96 act. In the future, if we do have a new rewrite, some revision of the Communications Act, why do you think the elements of that perfect storm might look like . What forces might drive legislation in this area . Well, i know we dont want to utter this magic word Net Neutrality, but ive got to. Theres scenario in which people advocating Net Neutrality dont get satisfied in one way, shape or form. Im not predicting anything about what the fcc is going to say. Even if the fcc, for example, agrees with the Net Neutrality crowd there ought to be a special title and be regulated, thats going to be challenged in court, all right . And or the fcc has to decide whether to allow whats called paid prioritization or faster service. Even as a common carrier, for example, you can still have reasonable discrimination. And you can imagine the Broadband Companies that can be on the losing side of this decision going to the fcc and petitioning them and saying, hey, wait a minute, its reasonable for us to charge a higher rate to netflix that has 30 of the traffic on the internet more than anybody else. One scenario is, we dont have satisfaction over the Net Neutrality. And then the that becomes a political movement. And the people would go to congress and say, weve got to fix the act somehow. To put this into the act. Once there is at least one train moving in that direction, other people kl then jump on and add their own things and you get a rewrite of the act. Thats one scenario. Another scenario, suppose republicans take over congress. Yeah. The senate. The senate. Well, yeah, thats right. The other one. All right. So they get the senate and obviously they dont have the presidency. But imagine a scenario in which they win the presidency in 2016 and theyve got both houses of congress. And, by the way, im not a republican, all right. Even though ive advocating a skinny fcc. But i think a lot of republicans would advocate a skinny fcc and sort of a oneparty rule kind of government 016, maybe that becomes something that the republicans push, because theres no one to beat on it. So, you imagine some scenarios that could do this. Im just teeing it up for my colleagues here. They can probably give you some more scenarios. So ill start and i think were pretty close to a place where people im not necessarily as far along the fcc skinny line. But i think the process needs to step up. You have mergers that sit there for years, you know, and its uneconomic its wasteful to have this amount of time. Folks are a little tired of that. Weve got to figure out what is the right regulatory model for the internet . And i hope itll be as minimal as possible. Because i think what we do in the United States has huge impact on how the rest of the world looks at how they do the internet. Some people that do the internet really bad and will look at an overly regulate regulatory model here and look at a way to leap frog or boot strap themselves into internet policy we dont want them getting into. I think youve got some real issues with regard to spectrum. All of those issues are trillion dollar issues. We have a massive issue with regard to universal service. Our universal service, system we have now has to be rethought and reconfigured and want to make sure everybody in this country has access. Think about a network, 5g telecommunications. What are the right ways to get investment there . We went from 56k to the average person getting 10, 12, in the United States, im getting 100 at home. Thats a pretty big leap going from 10 to a gig. Thats an even bigger leap. And one of the things we need to see in terms of the investments in the markets, there are lots of players who have lots of interest in seeing us get this right. We want a faster fcc, a smoother fcc, we want an fcc that is the silos we looked at before in an analog world. You tell me who is a broadcaster, a cablecaster, teleco and you tell me what roles and does it make sense to have them all silo into a different bureau at the fcc . All of those areas need to be rethunk. We will think about reforming the fcc. With regard to silos, but also keeping first principles. Whats the fcc there for . Its there to promote competition, not competitiveness, but competition to the benefit of consumers. People sometimes get competitors and competition confused. Its competition, not competitors. Advocating for competition will benefit consumers. Universal service, make sure all of us have access and benefit of the great networks. Secure networks, making them as secure as they possibly can and redundant as they possibly can. Those are the kinds of benchmarks, diversity, access to network. Really should be all about. If we have those kind of discussions. We start with first principles. I say take the whole act. What would we do . What would the act look like if were starting fresh, how we should start the process. Im a hack as much as a wonk so i know well never get a complete rethinking of it. But i think from the wonk part of me, what do we want this to look like . The hack part says, okay, lets look at the Political Part to get as close to nirvana as possible. Thank you. The last word and then ill reserve the last word for myself. Sure. So i think that the original question was, what has to happen in order for there to be a rewrite . Well, with elements well, i think for the interested parties, there has to be at a minimum nothing to lose as they enter that process for them to support legislation and a maximum, something for them to gain. And thats going to be very, very difficult as you pointed out. It was a multiyear, multidecade, 78s the longest ive heard. I always marked it from 1984 from the with the breakup of at t. As the beginning of the 96 act. But we can go back to 1978, certainly. Took years for that, highly complex. And that was not a fundamental rewrite of the 34 act. 34 act is this foundation, this bed rock foundation, for which all the subsequent acts that larry mentioned, you mentioned, were built upon. Cable acts, satellite acts. You know, everything. Its all been built on top of the 1934 act. So if you want to dig up that foundation, thats going to take a lot of work. Theres a lot for Different Industries and parties to lose by doing that. Theres the devil you know and the devil you dont know. If youre an industry player. In a way its better to have the certainty of the law even if you dont like it so you know how to build around it, live with it somehow rather than through a new law, which then goes through that legislation litigation cycle i talked about. So if a, youve got to pass the bill and signed into law, that can take years. B, its got to be litigated no matter whats in there because fcc or somebodys going to start implementing it. Then what happens . Thats uncertainty as well. If you can think in terms of consumers, i always like to start thinking about consumers, what are they benefitting from today . Where the hockey puck, where the futures going to be, nobody can predict. I think weve all agreed. But so whats going on today and how do you address systemic market failure. I hope that would be part of the conversation. And then there will be resources like spectrum. I think the fuel for rewrite would be federal spectrum. Theres a lot of agreement in terms of federal government needs to relinquish its spectrum. You can have carrots and sticks for federal users to do that, incentives and disincentives and deadlines and such. And that could be the fuel and the glue for an act. But that at the same time, that idea could spin off on its own. As we saw this with a spectrum act of 2012, big bipartisan support for that. As well as the dtv act. So, its all possible, but very, very difficult and an uphill battle. Well, as we blow out the candles on the 80th birthday cake, my wish in blowing out the candles is that the conversation continues. And obviously, i think as weve illustrated today, this will be a continuing conversation. Hopefully, a good part of that conversation will take place here at brookings. Id like to thank our wonderful, wonderful panelists. Bob, who left, bob mcdonwecdowe y everyone who has been here today. Thank you so much. I just want to make sure you all know that any comments i made were purely mine, did not reflect any organizations i belong to, any boards i sit on, any clients ive had or personally have or have lost over the last 90 minutes. Ditto. That would apply to everyone else. Thank you so much