- The Washington Times - Thursday, January 22, 2009

ANALYSIS/OPINION:

OP-ED:

With the arrival of a new administration, Kevin Martin ends his tenure as chairman of the Federal Communications Commission and will be succeeded by Obama campaign technology policy advisor Julius Genachowski. Like his predecessors, Mr. Martin has been both pilloried and praised for everything from his policy calls to how he ran the agency. However, when history evaluates Mr. Martin’s time at the commission, conservatives and all Americans should credit Mr. Martin for his commitment to competition based on market principles.

For tactical reasons, Mr. Martin may sometimes have deviated from the strictest conservative tenets. But those deviations reflected the realization that to promote competition in the long run, an effective regulator must know when to give up a little to get a lot. In this, Mr. Martin scored some notable successes. To illustrate the point, let’s examine three examples of how he promoted the nation’s long-run interest in delivering competitive broadband services to a growing number of Americans.

Consider Mr. Martin’s decision to promote genuine intermodal competition between traditional phone companies and the cable industry - a notion that was mere hyperbole when he took office in 2001 as an FCC commissioner. First, as a commissioner and then as chairman, Mr. Martin focused on removing legacy common-carrier regulations. Moreover, he expended great political capital to reform local franchising rules that preserved cable’s government-protected monopoly in the video marketplace. By understanding the important link between video and broadband, Mr. Martin’s efforts spurred cable and telcoms to invest in next-generation networks and compete vigorously in each other’s markets for a “triple play” of services.

Mr. Martin also helped assure continued private-sector investment in broadband networks by fending off onerous network-neutrality legislation and regulation. The first major attempt to impose network-neutrality regulations appeared in when the FCC sought to auction the beachfront spectrum made available by the transition to digital television. Traditionally, spectrum is auctioned on an unencumbered basis to allow the auction winner to put the spectrum to its most efficient use. However, some left-leaning members of Congress, a few business interests and liberal groups brought pressure on the commission to impose onerous “open access” requirements on the spectrum.

In a pure Machiavellian maneuver, Mr. Martin effectively saved the wireless industry from across-the-board network-neutrality rules by winning agreement from his FCC colleagues to carve out a discrete block of encumbered spectrum for a test of the open network concept in the marketplace. Verizon won the right to develop this “open network” spectrum, but the largest and most valuable of the frequencies auctioned were left free for market-based development. By giving up a little bit, Mr. Martin’s carve-out blunted the push for industry-wide network-neutrality regulations.

A second big network-neutrality case came with a complaint against Comcast for allegedly throttling BitTorrent, a “peer to peer” (“P2P”) file-sharing technology, to reduce congestion on its network. Again, Mr. Martin found a politically astute way to assert FCC authority and show that could reach a reasonable outcome without an onerous “bright line” net-neutrality law.

In a bow to Comcast critics, Mr. Martin initiated a public inquiry that encouraged interested persons to file comments or appear at two public hearings to make clear their concerns. In the end, Mr. Martin simply rebuked Comcast for failing to properly disclose its network management policies to consumers and ordered it to modestly modify its practices. While the tempest initially appeared to be an opportunity to advance the net-neutrality agenda, it is important to recognize that not only did Mr. Martin thwart attempts by his Democratic FCC colleagues to add a new “non-discrimination” principle which could severely hamper the way network operators efficiently manage Internet traffic, but his deft maneuver eased the pressure for legislation by showing swift FCC responsiveness under existing precedent.

Overall, the proof of Kevin Martin’s tenure at the FCC is in the pudding. Consumers are rapidly embracing broadband, with another 1.3 million newly signing up for service in the third quarter of 2008. Broadband revenue is expected to grow by more than 13 percent a year through 2011. Even amid recession, the telecommunications industry is continuing to invest in network equipment at a time when other sectors are facing bankruptcies, declining production and weakening sales.

The vitality of the telecom sector is due in no small measure to the pro-competition policies implemented by Mr. Martin’s FCC. Yes, Chairman Martin may have deviated from time to time from free-market libertarian orthodoxy. But he will hand off a telecom sector that is in better shape than when he took office and is poised for continued growth that can help lead America’s economic recovery.

Conda V. Conda, former domestic policy advisor to Vice President Cheney, is a telecommunications policy consultant for Navigators Global LLC. Lawrence J. Spiwak is president of the Phoenix Center for Advanced Legal & Economic Public Policy Studies.


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