Aspen Summit Notebook

August 25, 2004 |Miscellaneous

Digital content is a major driver of the Internet, several speakers here said, and one pointed to the double- digit rise in growth of content distribution on wireless devices. Europe is ahead of the U.S. on downloading files to wireless phones, VeriSign CEO Stratton Sclavos said, but next-generation phones that can download music and video are on the way to U.S. markets. Sclavos said that’s one of 4 growth areas that suggests Internet convergence is upon us. Of course, any copyrighted content distributed to a wireless device will be at risk of piracy. Perhaps CTIA Pres. Steve Largent’s choice Mon. night is not surprising, then: Of 5 working dinners available -- one dedicated to spectrum policy -- he spent the 2 hours at a dinner focused on P2P file- sharing and secondary copyright liability.

Restructuring the FCC was brought up by Progress & Freedom Foundation senior fellow Randolph May, but he had a hard time winning converts to his proposal to move the FCC into the administration and have a single administrator run it, rather than a 5-commissioner independent agency. May was moderating a panel on regulating the Internet’s physical layer and took the opportunity -- with FCC Comr. Abernathy in the audience -- to ask panelists for their thoughts. NCTA’s Dan Brenner seemed to prefer the current configuration. Because it regulates broadcasting issues related to political freedom of speech, he thought an independent agency with both major political parties represented was a good thing. ALTS Pres. John Windhausen noted that in his speech Mon., Chmn. Powell said he'd like the FCC to be more judicial and less political. Windhausen said that would be hard to do if the agency was part of the administration. As for reducing the commissioners to 3 -- Brenner said some rulemakings would be more efficient then -- Windhausen said 2 could be held up in Senate confirmation, leaving the agency crippled. “I guess 5 is where we're at then,” May conceded. In his Mon. speech, Powell made a brief reference to May’s proposal, saying only it was “interesting.”

FTC Comr. Orson Swindle took issue here Tues. with the exemption that keeps his agency from regulating the telecom industry. From the audience, Swindle asked USTA Pres. Walter McCormick whether his industry would be willing to give up the common carrier exemption. If the FCC were eliminated, McCormick replied, the FTC would likely have jurisdiction, as the agency does regarding consumer protection for other industries. But McCormick said “it seems to me to have 2 agencies involved in consumer protection” would be onerous. “I thought it was a thought-provoking question,” Swindle told us after the session. “By far the most consumer complaints we receive involve telecom service,” Swindle said, but when the FTC approaches McCormick’s industry “they raise their hands and say ‘common carrier exemption.'”

Those calling for “network neutrality” really want access to a network without paying for it, said NCTA Senior Vp Dan Brenner here. A wide range of interests -- including MCI’s Vinton Cerf, the Consumer Federation of America’s Mark Cooper, and Stanford U. Prof. Lawrence Lessig -- have called for Internet regulation based on levels, from the underlying layer up to services. Brenner insisted none of his member companies “block bits” with their cable modem services, giving all content equal access. He resisted any suggestion the physical layer should be regulated to ensure there would be no blocking. “Thankfully so far the government hasn’t taken the bait,” he said. (FCC Chmn. Powell has called on all broadband providers to ensure network neutrality, but didn’t say regulations were needed.) Brenner received some support from USTA Pres. Walter McCormick, who said “I am not a fan of the layers concept” outlined in “increasingly tortured academic papers.” McCormick, who came to USTA from the trucking industry, said federal regulators didn’t regulate railroads based on layers, from the rails to rail cars to rail car content. Instead, they said “if you can choose between a truck and a train, you have a choice.”