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House Committee: Convergence is Common in Communications Industries, So Why Not Regulatory Convergence?




WASHINGTON, May 27, 2014 - The House Energy and Commerce Committee recently released a white paper that seeks public comment on competition in the communications and technology sectors, as well as what role the FCC should have in regulating the sectors.

The paper pointed to a rapidly evolving digital landscape in the 21st Century and questioned whether communications law can keep up with the change.

Among other things, the paper noted that mobile and wireless have surpassed traditional communications. The number of wireless subscriptions (305 million) have grown to over three times the number of switched access lines (96 million).

Multichannel video programming distribution, or pay TV, has seen a significant shift as well: "Cable's share of [pay TV] subscribers fell from 59.3 percent … at the end of 2011 to 55.7 percent at the end of June 2012, while … DirecTV and DISH Network and telephone MVPDs (i.e. Verizon FiOS, AT&T U-verse, and CenturyLink Prism TV) gained both video subscribers and market share."

Even radio has seen innovative and competitive ways to deliver content to listeners through services such as Pandora and Spotify.

The paper concluded that these once-differing mediums are reaching a convergence and are becoming more "functionally equivalent" as time goes on. Yet the existing structure of communications law creates an “inconsistent approach[]” for the purposes of regulatory enforcement.

Regulatory policy should reflect the competitive conditions of the market it is addressing. As discussed in the first white paper, in its current form, the Communications Act consists of seven titles: general provisions, common carriers, provisions related to radio, procedural and administrative provisions, penal provisions and forfeitures, cable communications, and miscellaneous provisions. Each of the titles governs a specific sector of the communications economy with inconsistent approaches to definition and regulation. The practical result is that sometimes providers of functionally equivalent services – whether technologically or from the consumer perspective – are regulated in drastically different ways. The platform-specific reports issued by the Commission annually on the competitive states of wireless, video, and satellite industries echo the “siloed” approach of the current regulatory framework. By dividing the overall regulatory scheme into separate titles based on specific network technologies and services, the Communications Act fails to contemplate or address the convergence and evolution of services in the modern digital era and the impact on the state of competition in the communications ecosystem.

A variety of questions were raised for public response. Some of them include:

  • "How should Congress define competition in the modern communications marketplace? How can we ensure that this definition is flexible enough to accommodate this rapidly changing industry?"
  •  "Some have suggested that the FCC be transitioned to an enforcement agency, along the lines of the operation of the Federal Trade Commission, rather than use broad rulemaking authority to set rules a priori. What role should the FCC play in competition policy?"
  • "What regulatory construct would best address the changing face of competition in the modern communications ecosystem and remain flexible to address future change?"

The public was encouraged to respond to the questions. The deadline is June 13, 2014



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