Friday 4 November 2011

The US regulatory view: ODPO gets lunch with FCC Commissioner Robert McDowell

It was a surprise for a fledgling policy group to get an invite to lunch with a senior US regulator.

The Federal Communications Commission is the US version of Ofcom - on steroids! There are over 1,500 television stations, compared to the UK's handful, plus a host of radio, telephony and data services.  Spectrum allocation and competition questions arising from spectral scarcity (there isn't enough resource to meet the market demand, and the resource available needs to be carefully managed) form a big part of the FCC's job.

Oh, and they regulate taste and decency on broadcast TV channels.
"Most US residents think of the 38th Super Bowl when you mention the FCC, but dealing with incidents like Janet Jackson's wardrobe malfunction is such a small part of my job it's hardly worth a mention."
Commissioner McDowell's approach to regulation seems firmly aligned with our view at Open Digital: regulation is blunt and costly, always has unintended consequences, and should only be enacted when evidence of consumer harm or market abuse can be established.

We joined Big Brother Watch, Policy Exchange, COADEC and representatives from the Tax Payers Alliance for a 2-hour discussion over lunch, where the Commissioner asked as many questions about EU and UK communications policy as we did about US policy.

Although not strictly in the FCC remit, privacy and the EU "cookie directive" featured prominently, with most participants hailing the law which forces all websites using cookies to request permission to store cookie data as misguided and a somewhat extreme example of regulate first, ask for market evidence later.

"Usually the market sorts itself out," said McDowell, referring to a separate problem - one of market dominance in the telecommunications sector, exemplified by Apple and the early exclusive contracts when the iPhone first launched.

"When something new comes along, we have to allow a bit of time to see how the market will react. And it did, with Droid, Android and Samsung's Galaxy. And now we don't have exclusive iPhone ties with network operators."

In his view, Commissioner McDowell thinks the biggest online threat comes not from market abuse but from government attempts to control the network.  And regulation aimed at controlling the market sets the precedent that control is OK - a precedent that will be exploited by all who want to control the internet for whatever purpose.

The Commissioner extended the market analogy to privacy.  Although Martin Cooper, inventor of the mobile phone, and friend of Robert McDowell, believes that the loss of privacy in the digital age is a foregone conclusion, that's not to say privacy and data protection issues aren't highly relevant.

Consumers - the market - should punish companies who don't respect their privacy, etc.  But I note there is an added problem with complex issues such as privacy and data protection - the consumer often doesn't understand how their data is to be used, making it impossible for them to make informed choices on who they trust with their data, but that's definitely a topic for another day.

Another topic covered was spectrum allocation.  Against a backdrop of delays (and, we heard yesterday, more delays) to the auction of UK spectrum to allow new fast 4G mobile mobile data services, the FCC has looked into allowing more unlicensed use of radio spectrum, especially so-called white space.

Traditionally, licensing is required to prevent multiple users clashing on the same bit of radio spectrum. Technology such as WiFi minimises the risk by checking for interference before transmitting.

Now, newer wireless data technologies could be allowed; again, without the need for a license.  These would operate in the unused spectrum between TV channels, so-called white spaces, and allow fast data links over hundreds of yards to operate, providing some back-fill for rural broadband not-spots.

Ofcom is planning similar for the UK, in 2013, but there are concerns over delays, especially given Ofcom's track record of late, and - although the equipment would operate without a paid license fee, there is a view that some central system would be needed to prevent clashes, and concerns remain over who would be eligible to operate such equipment.

Also discussed were internet service providers and their obligations to provide child protection filtering to prevent access to pornographic content, and the issue of "paid tweets" and companies who pay people with a high social capital to promote their products on their blogs and social media streams.

Neither issues fall fully into the FCC remit; whilst the FCC regulates taste and decency on public TV channels, it has not formal control over internet content, and - given Robert McDowell's views on internet regulation - this Commissioner would rather keep it that way.  I'll blog a bit more on differing attitudes to parenting and the internet on each side of the Atlantic later.

Similarly on the issue of commercial influence over social media superstars.  Although the issue nominally falls under the Federal Trade Commission (FTC), Mr McDowell has a view:
"Someone hands you a flyer in the street, you don't expect it to announce who's paid for it.  You expect it's advertising something."
Again, the Commissioner thinks we need to look first at the harm, and whether society and the markets have a solution, hinting that our perceptions of the new social medium will catch up.
"If someone wants to highlight the dangers, the risks, good.  It makes people aware that this sort of thing is going on, helps the consumer make informed choices.  But do we need regulation?  Show me the evidence there is a problem and it's not going to go away on its own."

@JamesFirth

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