Policymaking Must Respect Constitution

Policymaking Must Respect Constitution
April 1, 2007

Randolph J. May

Randolph J. May is President of The Free State Foundation in Potomac, Md. (read full bio)

More than a decade has passed since Congress passed the Telecommunications Act of 1996. It is time to engage in a radical rethinking of communications law and policy.

Much communications policy thinking continues to rest on foundations that run against the grain of our constitutional culture.

I do not argue here that particular laws or policies violate current constitutional jurisprudence. Rather, I contend that in today’s competitive, fast-changing digital communications environment, radically different from the staid, generally monopolistic analog era in which the counter-constitutional culture was born, heightened respect for values derived from the Constitution would be a good starting point for reforming communications policy.

Neutrality and Free Speech

First consider network neutrality. Proposed neutrality mandates would prohibit broadband Internet service providers (ISPs) such as Verizon or Comcast from taking any action to “block, impair, or degrade” the ability of subscribers to reach any Web site or from “discriminating” against the content or applications of unaffiliated entities. A popular formulation prohibits broadband ISPs from preventing subscribers from “sending” or “posting” any content.

Government mandates requiring broadband ISPs to make their networks available for carrying or posting content they might prefer not to carry or post implicates ISPs’ free speech rights. Under traditional First Amendment jurisprudence, it is as much a free speech infringement to compel a speaker to convey messages against the speaker’s wishes as it is to prevent a speaker from conveying messages.

Those still wedded to analog-era paradigms do not grasp the notion that government-imposed “neutrality” mandates might violate the First Amendment. They cling to twentieth century broadcast and common-carrier regulatory paradigms.

Under the broadcast model, on the theory that broadcasters use the electromagnetic spectrum, a claimed scarce public resource, it is deemed permissible to curtail broadcasters’ free speech rights in ways the First Amendment does not tolerate for non-broadcast media. Thus, the Supreme Court sanctioned the notorious Fairness Doctrine, which required broadcasters to cover controversial issues in a balanced (read: neutral) way.

Under the common carrier model, on the theory telephone companies operate in a monopolistic environment, their rates and terms of service are controlled by the Federal Communications Commission (FCC). As long as carriers are allowed to earn a “reasonable” return on their investment, such government control is considered constitutionally permissible.

ISPs Are Not Common Carriers

Today’s digital broadband ISPs are neither broadcasters nor common carriers under the Communications Act’s classification scheme. They are private businesses that have invested billions of dollars building high-speed communications networks. The FCC has classified broadband ISPs as unregulated “information service providers” and repeatedly determined they operate in a competitive environment.

Under those circumstances, efforts to impose neutrality mandates akin to broadcast-like speech restrictions and common carrier-like nondiscrimination mandates become constitutionally suspect.

Merger Review

Now consider the AT&T-BellSouth merger.

The FCC’s merger review process has been criticized for many years on different counts, including that it substantially duplicates the efforts of the Justice Department and Federal Trade Commission.

But a particular feature of the Communications Act adds to communications policy’s counter-constitutional milieu. The act delegates authority to the agency to consider whether a proposed merger is in the “public interest.” This vague standard means no more or less than what three of the five FCC commissioners say it means on any given day.

The standard’s problematic nature was evident in the FCC’s handling of the AT&T-BellSouth merger. With such unconstrained authority in the agency’s hands, merger applicants often are forced to enter negotiations with commissioners to win approval in any timely fashion.

Regulation by Negotiation?

In the AT&T-BellSouth case, with one of the three Republican commissioners recused, the two Democrat commissioners refused to approve the merger unless the applicants “voluntarily” accepted net neutrality regulation that both Congress and the FCC have refused to impose industry-wide. And they “volunteered” to reduce rates for certain high-capacity circuits, even though the FCC already had deregulated those rates. Both concessions are likely to deter new network investment.

The applicants volunteered other conditions, such as repatriating 3,000 currently outsourced jobs, which have nothing to do with any claimed anti-competitive impact of the merger. If these unrelated conditions have any merit at all, the FCC should consider imposing them on all industry participants in generic proceedings.

In short, FCC merger reviews too often deteriorate into an unbecoming process of behind-the-scenes midnight negotiations not befitting a government committed to constitutional ideals of due process and constrained bureaucratic discretion.

It may be understandable that in an era of limited competition, communications policies were adopted that strained constitutional norms. But in today’s era of information abundance, there is no reason to allow such counter-constitutional strains to persist.


Randolph J. May (rmay@freestatefoundation.org) is president of the Free State Foundation. This article originally appeared in The Washington Times.

Randolph J. May

Randolph J. May is President of The Free State Foundation in Potomac, Md. (read full bio)