The Federal Communications Commission is considering whether to revise the policy it adopted – unanimously – to exclude from its automatic roaming mandate requests from mobile service providers to roam in their home markets. “Roaming” occurs when a subscriber of one mobile service provider utilizes the facilities of another mobile service provider with which the subscriber has no pre-existing relationship to place or receive a call. The Commission requires that a service provider accede to roaming requests by unaffiliated carriers except where the requesting carrier has a wireless license or spectrum usage rights in the same geographic area as the would-be host provider.

In other words, there is an automatic roaming right unless both providers have spectrum rights in the same overlapping area, the requesting carrier’s home market. Of course, in that instance, the two providers are free to negotiate a mutually satisfactory roaming agreement on a voluntary basis.

Several mobile service providers and rural carrier interests have asked the FCC to revoke the home market exclusion from the automatic roaming mandate, or at least to revise it substantially to preserve the automatic roaming entitlement. This the Commission should not do. Were it to do so, it would be another instance of the agency looking backwards through the regulatory rearview mirror, rather than forwards.

Recall the reasons why the Commission adopted the home market exclusion only a year ago. According to the Commission, an automatic roaming right in the home market of the requesting carrier “does not serve our public interest goals of encouraging facilities-based service….” The agency says this is because:

“[I]f a carrier is allowed to ‘piggy-back’ on the network coverage of a competing carrier in the same market, then both carriers lose the incentive to build out into high cost areas in order to achieve superior network coverage. If there is no competitive advantage associated with building out its network and expanding coverage into certain high cost areas, a carrier will not likely do so.”

The Commission’s rationale – to encourage facilities build-out by preventing mandated piggy-backing on another carrier’s facilities – is sound. It was this very reason, the deterrence of incentives to invest in facilities, which caused me to oppose for so long the agency’s “Unbundled Network Elements” network sharing regime. The Commission’s UNE network sharing rules were tilted too far in the direction of mandatory piggy-backing on the in-place facilities of incumbents.

There are certainly echoes of the long-running UNE saga in the roaming controversy. In the 1999 AT&T v. Iowa Utilities Board case, the Supreme Court held that the FCC’s UNE rules were unlawful because they required unlimited network sharing. What Justice Stephen Breyer said in his concurring opinion has particular relevance here:

“Nor can one guarantee that firms will undertake the investment necessary to produce complex technological innovations knowing that any competitive advantage derived from those innovations will be dissipated by the sharing requirement…Increased sharing by itself does not automatically mean increased competition. It is in the unshared, not in the shared, portions of the enterprise that meaningful competition would likely emerge.”

Eventually, the wisdom embodied in Judge Breyer’s opinion held sway when the courts forced the FCC as a matter of law to abandon the agency’s overly expansive UNE network sharing regime. The conclusion that the regime discouraged facilities-based investment was central to the courts’ decisions.

To be sure, the facts relating to the UNE regime and the mobile roaming issue are not precisely parallel. But the same underlying principle is at issue in both instances. Mandated network sharing discourages both carriers – the one with the facilities and the one without – from further innovation and investment that lead to more robust competition. The UNE network sharing requirement, in effect, established a regulated resale mandate, and the same would be true with respect to elimination of the home market exclusion, even though the FCC sunset the mobile carrier resale obligation over five years ago.

This does not mean that the Commission might not tweak its roaming rules to allow some in-market roaming entitlement for some limited time or on some circumscribed basis if it determines that some form of narrow relief is warranted on a transitional basis. For example, if the requesting carrier’s spectrum rights are encumbered for some period of time so that, in effect, use of the spectrum by the requesting carrier is not feasible, then some form of transitional relief from the home market exclusion may be warranted.

But in reconsidering the roaming regime, the Commission should not roam backwards by adopting a UNE-style mandatory network sharing regime. When it based the home market exclusion on the principle that network piggy-backing discourages facilities build-out, the Commission too must have heard the echoes of its unfortunate UNE experience.

Going forward, the FCC should stick to principle.

For Louisiana judges, crime does sometimes pay… at the pump. Louisiana’s Times-Picayune revealed today that Criminal District Court Judge Arthur Hunter has been reimbursed for more than $21,000 over the last 3 years to drive back and forth to work.
Although the funds are collected from court defendants’ fees and fines, one might [...]

In a sad reminder that freedom is not free, a group of radical racial sovereignty activists assaulted Iolani Palace staff, broke into both the grounds and the buildings, and desecrated a public historical treasure on Statehood Day, 2008. Led by James Kimo Akahi, an ex-convict claiming to be the King of Hawaii, a group [...]

I was surprised to see the Cleveland Plain Dealer call for Judges to list their Party Affiliation on the ballot. I cannot agree more.
Voters should know as much informtion as apossible about any candidate running for office and which Political Party a candidate belongs to will give voters insight into that judicial candidate.
I hope [...]

In case you did not have a chance to read today’s Wall Street Journal Editorial on the American Bar Association’s Proposal to prevent voters from selecting judges I have posted it below.
The idea that the American people are unabale to particiapte in the selection of the their own judges is very scary!

Wall Street Journal
The ABA [...]

The voters anger and disgust with incumbent elected officials and judges was on full display yesterday in Nevada. Yesterday’s Statewide Primary Election ended with three prominent GOP State Legislators and amazing two sitting judges being voted out of office. These two sitting Judges failed to win their primary elections which means they will not [...]

Last Friday, I moderated a panel entitled, “Net Neutrality Regulation: Perspectives on What It Means and Whether It Is Necessary,” at the American Bar Association’s annual meeting in New York. The program was sponsored by the ABA’s Section of Administrative Law and Regulatory Practice. The presentations, and the back-and-forth exchanges among the panelists, were some of the most interesting and informative I have heard in a long while. The panelists were Marvin Ammori, General Counsel, Free Press; Link Hoewing, Vice President of Internet and Technology, Verizon; James Speta, Professor of Law, Northwestern University; and Joe Waz, Senior Vice President, External Affairs and Public Policy Counsel, Comcast.

Not surprisingly, much of the discussion centered on the FCC’s August 1 action sanctioning Comcast for what the FCC claims to be discriminatory interference with Comcast’s subscribers access to BitTorrent’s peer-to-peer applications. When the audio of this ABA Continuing Legal Education program becomes available later, I will provide a link for those that might be interested. But, for now, I want to highlight two statements by members of the panel that struck me as very significant, and worthy of further attention and reflection.

Professor Speta, one of the nation’s leading telecom scholars, teaches courses in telecommunications and Internet policy and administrative law. He is also a member of FSF’s Board of Academic Advisors. Near the outset of his remarks, Professor Speta declared: “The FCC’s Comcast action is the most significant and controversial assertion of authority by an agency since the FDA’s effort to extend its jurisdiction over tobacco.” In the course of his remarks, Professor Speta indicated that he believes, on occasion and depending on the circumstances, there may be instances of Internet service provider conduct that call for net neutrality-like remedies in the context of post hoc adjudicatory proceedings that sound in antitrust jurisprudence. But he professed considerable skepticism that the Comcast matter presented such an instance.

In any event, Professor Speta’s characterization of the FCC’s action as the most significant and controversial assertion of agency authority since the FDA’s attempt to extend its jurisdiction over tobacco ought to give pause. In that case, even though Congress had regulated tobacco in many different ways for many years — and had considered and rejected legislative proposals to give the FDA authority to regulate tobacco — the FDA proceeded to assert authority by classifying tobacco as a “drug.” Suffice it to say for present purposes that the FDA’s regulatory grab did not turn out well. In 2000, the Supreme Court rejected the agency’s jurisdictional assertion in FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120 (2000). Before the FCC acted in the Comcast case, I argued in pieces here and here that, in light of the changed circumstances since the complaint against Comcast was filed by Free Press, and the uncertainty surrounding the FCC’s “ancillary” authority to regulate the practices of Internet providers, the Commission should have dismissed the complaint without prejudice.

Speaking of Free Press, Mr. Ammori made the second statement I wish to highlight. Near the beginning of his remarks, he said that one of Free Press’s goals is to make communications policy “more political.” Now we all know that, in practice, the FCC, a so-called independent regulatory agency, does not operate consistently in accordance with the theoretical premises of such an agency. The theory of the Progressive-era reformers who envisioned the independent agencies like the FCC was that these agencies, by institutional design, would be insulated from ordinary politics, that their largely apolitcal regulatory decisions would be guided by the institutional expertise of the commissioners and staff.

I am one who has questioned the validity of the theoretical premises of the independent agencies on separation of powers grounds. Be that as it may, query whether it really makes sense to want to make decisions such as “net neutrality” more political. This is especially so when such decisions involve, as they inevitably will, and as they do in the Comcast case, highly technical questions concerning whether certain Internet practices constitute acceptable “reasonable network management” or prohibited “discrimination.” It is certainly worth pondering whether making the decisional process “more political” in cases like Comcast’s enhances the quality of agency decisionmaking. I doubt that Senator Clarence Dill and the other “founders” of the FCC would think so.

Commentary on current events from the leading free-market think tank in Massachusetts.

David G. Tuerck is chair of the Department of
Economics and executive director of the Beacon Hill
Institute at Suffolk University in Boston. Tuerck led a
team of economists at the Beacon Hill Institute in a
series of studies aimed at determining the economic
effects of the FairTax national sales tax proposal.
In this article, he criticizes a recent Tax Notes article
by Bruce Bartlett, entitled ??Why the FairTax Won?t
Work?? (Tax Notes, Dec. 24, 2007, p. 1241, Doc 2007-26563, 2007 TNT 248-33). Tuerck identifies six mistakes made by Bartlett in attempting to identify the distributional consequences of the FairTax. These mistakes,according to Tuerck, arise over Bartlett?s understanding of the price effects of the FairTax, his interpretation of the purpose of the FairTax rebate, and his assessment of the burden of the FairTax on government.

For the third year in a row, The Beacon Hill Institute has found that Massachusetts outranks all other states in terms of its economic competitiveness. Despite persistent worries about population loss, the threat to its high tech base and high housing costs, the state?s economic fundamentals are strong, making it the state most able to sustain a high standard of living for its residents and best equipped to enjoy economic growth over the long term. It reaches this finding in its 6th annual State Competitiveness Report, released on Dec. 19