Techno-Regulation

Remember when Congress pre-empted state and local regulation of wireless rates, and the FCC declined to impose rate regulation or require tariff filings? Now just five years later, many wireless carriers are wondering why, despite new competition from PCS and E-SMR providers, regulatory burdens have increased rather than decreased.

Maybe it is because instead of regulating carriers' core relationship with consumers, such as rates and terms of service, the FCC has turned its attention to the technology itself. The FCC cites public interest -- enhancing competition, improving public safety and providing access for more Americans -- as the reason for this regulatory trend. But there are four emerging technology trends on the policy frontier that should be monitored closely.

The quest for greater access to new technologies and features. Recent and pending proceedings demonstrate that savvy consumer groups and law enforcement officials have pushed traditional access rights to new levels. In designing wireless E-911 implementation rules, for example, the FCC recognized the importance of consumer access to emergency services and mandated deployment time frames for new location technologies. Similarly, the FCC's ongoing proceeding to implement Section 255 of the 1996 Telecom Act stems from the disabled community's desire to obtain greater access to services and equipment. In addition, the current battle over CALEA demonstrates law enforcement's desire to access digital technologies to facilitate electronic surveillance.

2. The double-edged sword of "technology neutrality." A second policy debate in the technology arena concerns the FCC's desire to remain "technology neutral" in resolving important competition issues such as interconnection, number portability and customer proprietary network information (CPNI). Despite convergence, technology deployment differs among wireless, wireline and cable services. Although technology neutrality may be an appropriate long-term competitive goal, the FCC should assess whether this framework is helping or hurting the evolution of wireless to wireline competition in the short term. Carriers have raised specific technical problems in translating number portability and certain CPNI requirements to wireless networks, and they question the need to impose additional burdens on a more competitive industry.

3. Growing interference concerns. Recent FCC decisions allowing greater service flexibility and new licensing structures have brought technical innovation but also have mounted interference concerns, particularly at service-area boundaries. Geographic area licensing, "overlay" licensing of unused spectrum surrounding incumbent providers, and new sharing arrangements between satellite and terrestrial services have strained the current system. As quality of service becomes an important competitive distinction, FCC staff members complain that interference matters take up their time and resources.

4. The mire of intergovernmental coordination on these new issues. The proliferation of new technology issues has extended the FCC's traditional domain to encompass the jurisdiction of other government agencies. Health and vehicle safety issues affecting wireless carriers involve an alphabet soup of regulators. The public safety community and federal law enforcement agencies are active participants in the E-911 and CALEA debates, and many other agencies are involved in Section 255 issues.

The need to coordinate agencies and to import expertise from outside the FCC has brought proceeding delays and has affected its ability to put an issue to rest.

The impact on wireless carriers has been more negative than positive -- regulatory uncertainty, delays, new regulations and costs, or "unfunded mandates." Regulators also face the dilemma of handling a new breed of policy issues. And it is too early to gauge the impact on consumers and the general public.

When asked about this trend, FCC Commissioner Michael Powell cited "techno-phobia" and "techno-utopia" -- people fear new technology and want to constrain it; at the same time they expect it to solve all of their problems. Regardless, resolving these issues will require a delicate balancing of competing interests -- privacy, public safety, access to technology, cost of service, speed of deployment -- as well as a keen understanding of the underlying technology.

Farquhar is a Hogan & Hartson attorney. Previously, she served as FCC Wireless Telecommunications Bureau chief. Her e-mail address is mg7@dc2.hhlaw.com.