By Daniel A. Lyons
Broadband providers have begun abandoning all-you-can-eat unlimited Internet plans in favor of data caps and other regimes that charge customers based on use. Consumer groups, having won the battle for net neutrality, now challenge this shift. They fear usage-based pricing will lead to higher prices, reduced service, and elimination of competition from upstarts like Netflix.
This Article examines the policies underlying the usage-based pricing trend. Compared to unlimited use plans, usage-based pricing shifts more network costs onto those who use the network the most. This can reduce costs for lighter users and make broadband more accessible to low-income consumers. Usage-based pricing may also help reduce network congestion. It can also be used anticompetitively, meaning regulators should intervene to prohibit providers with market power from harming consumers. But otherwise, broadband providers should be free to experiment with different pricing strategies to compete for customers and fund future network upgrades.
By Samuel L. Feder, Matthew E. Price, and Andrew C. Noll
The Supreme Court’s recent decision in City of Arlington v. Federal Communications Commission has largely escaped notice, but is potentially a significant administrative law case. Although the Court granted the case to decide whether an agency should receive deference in deciding the scope of its own jurisdictions—the Court held that it should—the majority, concurring, and dissenting Justices debated a different question that can be traced back to the origins of the Chevron doctrine: whether, prior to affording Chevron deference, a court must first ascertain whether Congress intended to delegate to the agency the power to interpret the particular statutory provision at issue. The majority held that a court need not do so. Such a holding may have potentially significant consequences for administrative law. For example, under Arlington, courts would no longer adjust their level of deference depending upon the importance or nature of the statutory ambiguity in question. And courts may seek to counterbalance the wide interpretive authority given to agencies by rejuvenating other administrative law doctrines, such as the nondelegation doctrine, that place limits on an agency’s freedom of action.
By Reed E. Hundt and Gregory L. Rosston
The FCC has taken three different competition policy approaches: the classic role of regulating terms and conditions of sale, the modern role of using various tools to create largely deregulated, multi-firm, competitive markets, and the laissez-faire approach of believing that unregulated markets, even if monopolized, will produce the best outcome. For the most part, a light-handed modern role has proven successful. The FCC should adopt such an approach going forward with a classic regulatory role as a backstop, and it should articulate clearly its competition policy framework so that firms can understand the rules and compete to provide service to customers in a pro-competitive manner.
Lessons from Google Fiber: Why Coordinated Cost Reductions to Infrastructure Access are Necessary to Achieve Universal Broadband Deployment
By Holly Trogdon
No one can contest that eliminating state and local rights-of-way fees results in lower broadband deployment costs for Internet service providers. After Google Fiber, it may be difficult to argue that doing so leads to savings significant enough for providers to build out broadband infrastructure to those who cannot afford or do not see the value of high-speed service.
Google Fiber can inform rights-of-way policy decisions to support the FCC’s goal of universal high-speed broadband service. This Note argues that if the FCC wishes to meet its goal of universal service, it should engage in efforts to lower costs related to infrastructure access, understanding that as savings increase in the deployment phase, the subsidies needed from the FCC’s Connect America Fund to bridge the broadband deployment gap decrease.
To support this effort, the FCC should not interfere with state and local governments’ control and management of rights-of-way, including fees. Instead of the FCC utilizing its preemptive authority under the Telecommunications Act, this Note suggests a more coordinated approach to cost reduction. The FCC should provide states with educational resources on rights-of-way best practices, an effort that can be supported Congress expanding the FCC’s jurisdiction to collect data on rights-of-way from states. Additionally, the FCC can encourage states to adopt deploymentfriendly practices such as incorporating voluntary timelines, dispute resolution mechanisms, and “dig once” policies into their statutes or deployment plans.
Toward a Fairer, Subscriber-Empowered Multichannel Television Regime: Injecting Substance Into the Good Faith Requirement on Retransmission Consent Negotiations
By Darrel John Pae
Coercive bundling is the practice of conditioning a local broadcast station’s retransmission consent on the carriage of other networks affiliated with the local broadcast station. A market defect results because networks, and the programming they contain, are delivered to multichannel television subscribers without regard to whether those networks are actually demanded. This market defect allows broadcast stations and the media companies owning them to charge higher prices for their networks in a way that is not possible if those networks are offered independently of each other. It also paves the way for inefficiencies in the use of resources by multichannel video programming distributors (“MVPDs”), and harms the ability of smaller MVPDs to compete with their larger, more established counterparts. Meanwhile, subscribers not only are forced to receive programming they do not demand in the first place, they also have to pay increasing subscription fees passed on to them by MVPDs that are coerced to pay higher carriage fees for the bundles they have to accept in procuring retransmission consent. These detrimental effects are inefficaciously addressed by the FCC rules on good faith because the FCC’s review authority is currently limited to the procedural aspects of retransmission consent negotiations. Therefore, the only effective remedy is for Congress to authorize the FCC to oversee the substantive aspects of retransmission consent negotiations. The FCC should then strengthen its enforcement of rules governing the duty to negotiate in good faith and prohibit practices that constitute coercive wholesale bundling.
By Mary Shields
Over roughly the past decade, the number of devices utilizing unlicensed spectrum has grown exponentially. This exponential growth mirrors a growth in the public’s perception of the importance of unlicensed devices. Unlicensed spectrum has also been important for the development and enhancement of telecommunications technology. While the FCC once presumptively protected a licensed operator from unlicensed transmissions causing interference, it has recently issued decisions that favor unlicensed operators over the complaints of licensed operators, likely because of an appreciation of the importance of unlicensed uses.
At this moment, it is unclear in a given case which party the FCC will choose to protect, the unlicensed or licensed operator, as there are no formal rules that protect unlicensed services. In order to ensure protection for unlicensed services valued by the public and to establish a more predictable and equitable means of determining disputes between licensed and unlicensed operators, the FCC should adopt a public prescriptive easement framework to determine the outcome of interference disputes. The public prescriptive easement framework includes consideration of notice, duration of use, and use by the public; these considerations would adequately compare the public’s interest in maintaining an unlicensed service with the interests of a licensee. The results will be more predictable and will ensure the preservation of services meaningful to the public.