Issue 12.12 - December 2004
Technology over ideology
FCC chair Michael Powell has confounded liberals and free market purists
Michael Powell completes his fourth year as chair of the FCC in December, and his tenure has not been a quiet one. He oversaw one of the most ferocious public policy battles in FCC history - the fight over media concentration - and he did not hesitate to run the indecency flag up massive-fines hill, hitting CBS for $550,000 and Fox for $1.2 million. He is the FCC head liberals love to hate, and is, in their eyes, one of George W. Bush's first (of many) mistakes.
But to this liberal, there's something important and rare in Powell's legacy that deserves our respect. For in at least two critical domains of FCC policy, he has let the facts push ideology aside. When he was appointed, one media analyst warned, "Beware the rhetorical flashes of brilliance; beneath that is someone who wants to let the market decide at the expense of consumers." The "let the market decide" part was no doubt correct; but liberals like me were too quick to assume "at the expense of consumers."
Consider, for example, spectrum. When Powell took charge, most thought the FCC would quickly launch massive spectrum auctions. The reigning ideology was that spectrum is land, and that markets allocate land most efficiently.
But Powell's FCC quickly sabotaged this idea, in part because technologists pushed him to see that spectrum is not like land: that perhaps the best way to allocate spectrum is to share it, and that perhaps the better market to encourage is not in spectrum itself, but in devices that share it.
Powell knew this was heresy. But without denouncing the party line, he nonetheless set up its demise. Auctions were slowed; spectrum commons were encouraged. The free space in which your Wi-Fi network runs would coexist with chunks of spectrum sold like so much beachfront property. It had the form of a fair fight - "may the best spectrum model win" - but it unleashed a powerful market in technologies that depend upon the commons. This market thus became the natural enemy of auctions.
A similar story could be told about Powell's second surprise: the policy war about broadband "open access." Advocates of open access (I was certainly one) demanded that the FCC require all network owners permit access to their customers. The Telecom Act required this of DSL-line owners; we wanted the same rules applied to cable companies. The reason was not grounded in some Internet kumbayah; open access, we believed, would ensure competition in Internet service. Competition would help protect network neutrality, and neutrality in turn would increase innovation and growth.
Powell had little patience for open access. But as technologists pushed him to see that the end-to-end neutrality of the early Internet was crucial to network innovation, Powell became crucially less laissez-faire. In a speech last February, he outlined his vision of network freedom - not open access, to be sure, but one that requires network owners to offer consumers a neutral Internet. He didn't announce regulations to preserve neutrality. (Commissioner Michael J. Copps, an unalloyed hero in my eyes, wanted that.) But he did threaten regulation if neutrality was compromised. His message was clear: Build the network neutrally or face an impatient federal regulator.
The aim again was to promote the market, but this market plainly benefits consumers. End-to-end neutrality empowers innovation at the edge of the network - where computers connect and applications run. It thus invites application competition and discourages network control. The intervention Powell threatened is regulation of the best sort - designed to encourage competition, even if it limits the freedom of some powerful actors.
In both cases, the surprise is a chair who lives in more than two dimensions - the sort of policymaker that Washington-types can't quite grok. Many liberals continue to confuse Powell with the devil; many enemies of liberals continue to celebrate the ideological purity they believe Powell represents.
The facts don't fit either simplification very well. Indeed, Powell doesn't fit Washington well. He recognizes its game, he has seen its corruption, yet he has honed a skill to fight both the game and its corruption. It is enough to exhaust even Superman. We should not expect anyone to suffer it much longer.