More on Influencing the FCC

In my recent post on network neutrality and the Google-Verizon joint proposal to the FCC I mentioned some reasons why it is acceptable and even positive for industry players to take these actions. There is more to be said on this topic of industry meeting with and potentially influencing the FCC that go far beyond the narrow issue of network neutrality. It is a topic that extends beyond FCC, the US and the telecommunications industry, and is applicable to other government regulators. This makes it worth a brief discussion.

The first thing to understand is the structure of the FCC. At the top are five Commissioners, where the tradition is to have three, including the Chairman, affiliated with the party of the Administration, and the other two affiliated with the other party. This arrangement is easy to maintain in an effective two-party system, only requiring resignations, re-assignments and appointments soon after a presidential election. The departments are roughly aligned with the industry segments as defined with law or by regulatory regime, and these change from time to time as the law, policy and the industry itself changes over time. The bureau Chiefs which oversee each department are senior civil servants that are typically non-partisan (somewhat akin to a Deputy Minister in the Canadian government). Within each bureau, the staff is a mix of career civil servants and professionals who usually have a limited tenure in the agency. These professionals, often young lawyers with strong academic credentials, accept the lower public sector wages for the experience and the opportunity to build connections that will aid them in their careers beyond the FCC.

There are technology professionals in the FCC, as there must be, but although they are intelligent and have decent credentials their knowledge tends to gets stale over time since they are not actually building "stuff". Engineers within the FCC do important technology planning work and provide an internal knowledge base to enable the FCC to better understand the new technologies that frequently emerge, and the implications of the technology on the statutes and regulations. Even though the FCC is responsible for type acceptance of a wide range of electronics and transmission equipment, most of the testing itself is done in the private sector, leaving the FCC to set and manage the testing criteria.

The above description isn't completely accurate -- there are many exceptions to what I've said -- but it provides a glimpse into how the organization operates. It is based on my own past dealings with the FCC in both formal and informal interactions, and especially the many people I met there. I am happy to say that the quality of the people was always excellent. The politics and the rigid processes they must operate under can often make it seem that they are all a bunch of buffoons or lining their pockets with contributions from industry, but that is emphatically not what I saw. They have a tough job in navigating political and industry minefields that accompany every serious issue before them. Regrettably they need their large legal staffs since Congress and the Communications Act keep them on a tight and short leash, and because so many of their orders get appealed to the courts.

Although the FCC tries to keep its regulations technology neutral, that is not always possible; sometimes they must specify technical operations and specifications to remove ambiguity and to deal with current problems. For example, they will order that two carriers must interconnect their networks at a certain meet point, the responsibilities of each to do so, and what features or capabilities that they must provide to each other, but they will not specify which standards or protocols or physical layer technologies they must use. Despite this, without knowing what the technology is capable of, its longevity and cost, and each carrier's particular situation, even this level of description can be problematical.

This is one good reason among several for the FCC to not only listen to the industry but to invite that level their input. This is as true for network neutrality as it is for network interconnection, type approval, application throttling, provision of calling number identification, and a host of other important issues the FCC must deal with. Their own engineering staff can assess the input received to supplement their own research and hopefully make better decisions. Sometimes the politics overrides the technical discussion, such as happened with power-line broadband when the push for competitive alternatives had policy urgency, but can also come from industry lobbying of Congress. It's all fair game.

The FCC can also be flexible in cases where they want to promote new technologies but lack the rules for type acceptance or products are presented which fail to meet existing criteria. By approaching the FCC with good technical arguments they will loosely interpret the existing regulations or explicitly grant exceptions, provided that higher objectives such as "doing no harm" to the networks or other services can be maintained. I would classify this as a positive example of industry influence of the FCC (which is handy since I've done this more than once myself).

The following list summarizes what I believe are some of the good reasons for the industry to influence the FCC:

• Explain new technologies to the FCC, and apprise them of industry progress on standards and technology agreements, so that they are prepared to assess new products and speed approval (or rejection). If the technology meets a need, this benefits consumers in addition to the industry.
• Notify them when rules they propose would have undesirable consequences on carriers' networks or businesses, or their customers, and suggest specific alternatives that allow the FCC to still meet their policy objectives.
• Propose solutions to difficult policy objectives, including solutions that favour the company or industry sector making the proposal. The FCC is smart enough to discern good from bad proposals, and in any case they must put new rules proposals out to public comment. They will also invite opposing parties to make their views known so that there is balance; however, it must be acknowledged that if the political pressure is strong this may only be done for appearance sake).

Despite all this pleasant talk about the good aspects of industry input, bad regulations can still result, or good regulations with poor enforcement. As long as the process remains transparent, public oversight is possible, either directly or via their elected representatives. I do know that the FCC was always diligent in making sure that all presentation material in one-on-one meetings is on the public record; if you try to not provide written material they will demand it so that they do have something to place on the record, even if the actual discussion does happen to drift off in another direction. I think the process works quite well. When meetings and material are kept off the record, that is the point at which you may need to worry about industry influence.