Setting the Communications Policy Agenda for the Next Administration

Photo from Flickr user Mike Mozart and used under Creative Commons

For the past thirty years, the Aspen Institute has convened an annual conference that has focused on topics related to communications policy. Each year, participants, including regulators and other policymakers along with scholars and representatives of telecom companies and public interest groups, have met to address a specific issue and develop recommendations for constructive action around that issue.

The 31st annual Aspen conference took place several months before the 2016 presidential election. Given this timing, it seemed appropriate for this year’s convening to explore the key communications issues that will face the incoming administration and develop an agenda for action on these issues. Of course, the two candidates have sharply differing views on a wide range of topics. Even though communications policy has not been the focus of much discussion during the campaign, their approach to this topic is likely to differ as well. Still, it was possible to identify some big issues that will demand attention in the near future no matter who wins the election, and to propose promising approaches for dealing with them.

Providing a Back Azimuth
The conference opened with a speech by FCC Chairman Tom Wheeler providing his perspective on the current state of and the future challenges for communications policy. While noting that we are living in a time of network-driven “opportunity and reshaping,” Chairman Wheeler began by looking back to the advent of two earlier technologies — the railroad and the telegraph — which “combined to make the mid-19th century a still unmatched period of network-driven upheaval” that disrupted the lives of millions of Americans. Wheeler also said that period generated creative responses that improved the people’s quality of life. He then suggested that we can use this past experience as a “back azimuth” to help chart a path forward in the present.

Wheeler identified five basic components of a “Network Compact” that have defined the “responsibilities of those that built and operated networks: access, interconnection, consumer protection, public safety, and national security.” After recounting the FCC’s recent actions in each of these areas and acknowledging that many have been controversial, Wheeler outlined the critical importance of domains, and explained that what the FCC has done will provide the “back azimuth” for the next stage in communications policymaking. (Read the full text of Chairman Wheeler’s speech here.)

Current History
To provide context for the conference discussions, Kevin Werbach of the Wharton School at the University of Pennsylvania provided a quick tour of the current tech landscape and highlighted some of the policy issues that are likely to need attention in the near future. He noted the appearance of new network-based digital technologies and business models that could challenge existing regulatory schemes. For example, while cable and cellular are now the primary broadband access providers, new players are emerging: The dominant digital advertising platforms, Google and Facebook, which are largely exempt from traditional telecom regulation, are becoming access providers in their own right, while OTT (Over the Top) providers are creating new business models for content delivery. At the same time, algorithms are becoming more powerful and pervasive, threatening to embody discrimination in new forms and intrude more deeply into personal lives, and requiring a rethink of traditional approaches to protecting privacy. Meanwhile the emergence of autonomous vehicles and the Internet of Things will create new issues by intermingling networks with real-world objects in new ways. And a deeply disruptive technology such as the blockchain distributed ledger (the basis for crypto-currencies like Bitcoin) will offer powerful capabilities that will bring new regulatory challenges.

In attempting to identify the key trends that will shape the policy agenda, some participants suggested that as we reach the limits of Moore’s Law, we might be “getting near the top of the technology curve” and entering a period of comparative stability. Others suggested that we may be at a point of diminishing returns on tech, in which factors like improving usability, affordability and reliability will loom larger than increasing raw performance. Yet others cautioned that we are inevitably limited by current knowledge, and further surprises undoubtedly lie ahead.

Still, whatever today’s unknowns may be, the “known unknowns” related to telecom policy (e.g., the transition to next generation 5G wireless networks) would be sufficient to fill the agenda of any new administration. Among the big questions that will need to be addressed are:

  • Are traditional approaches to regulation becoming outdated in a broadband Internet world or can they be adapted to accommodate new realities?
  • Is it time – 20 years after the 1996 Telecom Act – to update telecom regulation? How feasible is such an effort in the current polarized political environment? What can be accomplished within the existing framework?
  • Where does competition ensure robust markets and where is it lacking?
  • What is needed to support robust private investment? To encourage continued innovation? Are there areas where public investment is needed?
  • What services are essential and which are not? Which services deserve to be subsidized?
  • How can the U.S. maintain global leadership in telecom and tech?

The Next Telecom Agenda
The participants agreed to forbear from confronting the formidable challenges that would be involved with any attempt to broadly reform telecom regulation. Instead they focused on issues that are already under active consideration or are likely to arise in the near future. Participants developed recommendations related to three main topics: ensuring inclusion and expanding opportunity for all citizens; encouraging continued investment and innovation; and creating a trust environment online to protect citizen’s digital lives.

  1. Promoting Inclusion and Opportunities
    The group started from the premise that ensuring full participation in the rapidly growing digital economy is not only important for those who may be left out, but also for society as a whole which would benefit from having everyone connected and active online. As the percentage of households without broadband access has declined from 30 percent to 10 percent, the digital divide has diminished, but it has not disappeared. FCC Commissioner Mignon Clyburn asserted that there is a clear correlation between the “persistent poverty” that exists in 353 counties in the U.S.[1] and the lack of access to high quality broadband in those communities. We also know that non-adopters of broadband tend to be rural, older, and less educated, which suggests that there may be multiple causes for non-adoption.
     

    The group recommended three types of actions to overcome the persistent digital divide. The first addressed the need to expand access to broadband, particularly in rural areas where fully 40 percent of the population lacks access compared to just 4 percent in urban areas. (The next set of recommendations included a proposal for how to fund this expansion.) The second focused on the problem of affordability and included several specific recommendations to increase the effectiveness of the federal Lifeline program, and encourage greater state-level innovation. The third set of recommended actions was intended to spur adoption and use of broadband — particularly among those who don’t see the Internet as relevant to their needs — by expanding and improving the online availability of government services of particular interest to current non-adopters. Finally, to raise awareness of the economic opportunities for businesses offered by next-generation telecom services, the group recommended that the next administration undertake a “quick” update of the 2010 National Broadband Plan, with particular attention to articulating the potential benefits for key sectors of society such as health care, education, energy, and economic opportunity.

  2. Supporting Innovation and Infrastructure
    In this area, the group articulated a win-win objective that entailed “spurring both innovation and investment simultaneously through initiatives that create jobs, capture lost opportunity costs of not making necessary infrastructure investments, and solidifying U.S. global communications and technology leadership.” To accomplish these related goals, the group recommended the creation of a new public-private partnership to support basic scientific research on advanced wireless and other technologies, to be funded with a portion of the proceeds from the government’s spectrum auctions. And to provide the substantial funds that may be needed to accelerate building out the next-generation broadband infrastructure (especially new 5G wireless networks that are likely to represent the core telecom platform for the future) the group called for the creation of a “21st Century Infrastructure Bank.” This entity could issue bonds to pay for socially valuable capital investments. The bonds would be funded by receipts from the Universal Service Fund and guaranteed by the Fed to ensure a low interest rate. Private companies would be strongly encouraged to contribute their own capital in order to provide a significant multiplier effect.

    The group also made recommendations about providing tax incentives for investments in infrastructure, and highlighted the need for a concerted effort to ensure that sufficient spectrum is made available to sustain the growth of new wireless services. Finally, the group called on the U.S. government to decisively confront a new wave of international “neo-mercantilism” designed to give foreign competitors an unfair advantage over American firms. To do so, they recommend the creation of a new White House Directorate of Trade and Competitiveness.

  3. Building a Trust Environment
    The final set of recommendations focused on the continuing challenges posed by threats to cybersecurity and privacy. The group noted that concerns about these issues are no longer confined to just the tech sector but affect virtually every individual and every corner of the economy. It also noted that U.S. industry efforts to “lock itself down” to defend against cyber threats run the risk of isolating us globally. Such moves could also jeopardize government access to information important for national security. What is needed is a path to rebuild trust between industry and the government, which will require a new level of openness and collaboration to deal with these issues.

    While the private sector has developed mechanisms to identify and promote best practices in countering cyber threats, the government has unique capabilities, such as diplomatic measures or economic sanctions, that it can bring to bear on the problem. To address problems related to insufficient coordination, it was recommended that the new administration along with Congress should convene a blue-ribbon public-private group to map what the current activities of key entities, identify gaps, and recommend improvements to shore up security.

    Similarly, in the area of privacy, the participants called for creation of a broad stakeholder group to deal with key issues and work toward building a unitary framework for privacy protection that is both comprehensive and comprehensible.

Seeking Black Swans
Before the conference ended, the participants considered the possibility of the occurrence of an unanticipated event — a black swan — that would have the ability to reshape the telecom policy agenda by altering the urgency of addressing some items or introducing entirely new issues. Blair Levin described five different kinds of black swans:

  • Macro-economic – e.g., a big recession that depresses demand and discourages capital investment, or passage of a new tax bill that stimulates a boom in investment.
  • Micro-economic – e.g., industry realignment due to one or more big acquisitions, or a major shift in the balance of competition within a market.
  • Technology breakthrough – e.g., a powerful tech innovation or a new entrant who introduces new capabilities that change a market configuration.
  • Incident – e.g., a “cybersecurity Pearl Harbor” or a natural disaster that results in a prolonged network disruption, shaking public confidence in the digital economy.
  • International event – e.g., a sharp increase in anti-American Internet policies abroad or foreign interference with U.S. satellite operations.

Though the probability of any one of these events happening may be low, it is not at all unlikely that some such event will occur during the next administration that will cause a re-ordering of policy priorities. But whether or not a black swan appears, it is certain that the next administration will have to address an extensive and urgent telecommunications policy agenda.

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