Remarks, Former Commissioner Michael J. Copps

REMARKS OF FORMER FCC COMMISSIONER MICHAEL J. COPPS
F2C CONFERENCE
SILVER SPRING, MARYLAND
MAY 21, 2012

Thank you, Jim Baller, for your warm and generous introduction. When I think back to the earliest stages of trying to get a genuine broadband strategy developed for our country, the first name that always pops into my head is Jim’s. I remember so well his visits to my office, his conviction that this could in fact be done in spite of an atmosphere at that time that was not very encouraging, and his vision for what such a strategy should contain. His was a truly formative voice; he has been a champion for broadband; and we owe him—all of us—a tremendous debt of gratitude.

David Isenberg, what an impressive conference you’ve put together. I’m honored to be here. So many movers and shakers, so much expertise, and so much ground that you’re covering. And it’s a good thing because that ground just keeps moving and shaking. There’s a good idea one day, and the next day—or what feels like the next day—it’s being sold for billions of dollars. People always say new and exciting things at this conference and they’re constantly coming up with great ideas, so I know I’ve got my work cut out for me.

Well, there are a lot of exciting things going on. A fully reconstituted FCC with two obviously very talented new Commissioners. Efforts to reform—or deform—the FCC, depending upon how you look at them. Putting together a regime for incentive auctions to free up much-needed spectrum. Turning Universal Service reform into reality. The Courts getting ready to opine on big ticket items like network neutrality and indecency. Amid all this, innovation and technology will continue to transform communications and change our lives and present issues that perhaps we haven’t even thought about yet. FCC watchers, of whom I am one now, will have a fascinating time following all this; and FCC doers, of whom I am not one now, will be as challenged as any group of Commissioners has ever been.

I think back to how our lives have changed over just the decade I spent at the Commission. Communications rocketed to the forefront, transforming how we lived our lives every hour of every day in a new digital world. I think the best description of how much they changed our lives came from my friend Shelley Palmer when he said that we—you and I—are all zeros and ones now. That’s who we are, how technology treats us, and how others often see us. That’s where we live huge blocks of our lives, so I don’t think Shelley was very far off the mark. Think what life would be like if any of us in this audience had to go back and rely on the tools of the pre-Digital Age, having to forage with the Neanderthal communications tools of the 1990s, or, worse, the pre-historic 1980s. How do you think all that quality of life stuff would be working for us? We’d be lost—about as helpless as little Charlie Copps, my seventh grandchild who was born last week. We are, my friends, digital dependents. Instead of calling this the Digital Age, perhaps we should re-label it “The Age of Digital Dependence”.

Yet the old historian in me—and you can emphasize either of those two words—reminds me that the more things change, the more they stay the same. Try as we might to talk about new issues facing the Commission, the old challenges just keep coming back. In fact, they never go away. They may come in different wrappings and with new semantics, but they’re really not much different. It’s still all about protecting the public interest. In telecommunications, that means getting advanced communications out to all our citizens—reasonably comparable services at reasonably comparable prices. From there, Congress made plain the need for consumer protections, competition among providers, and protecting the safety of the people. In media, it‘s still about promoting diversity, localism and competition and making sure people get the news and information they need to be fully-functioning citizens. These were the challenges of 1934 and 1996 and they remain the challenges of 2012.

What’s changed, however, is that it’s so much more difficult to meet these challenges in 2012. To be sure, it was never a slam-dunk, but we have ourselves in a predicament now where we won’t overcome these challenges without some major changes. And making those changes is piled high with difficulty.

Here’s my take on why this is so.

First, 30-plus years of misguided public policy short-changed our communications infrastructure. I can speak most familiarly about the years after 2001 because that’s when I had a front-row seat on it all at the FCC. I came in expecting to help shepherd start-up and struggling phone companies—some facilities-based, some not yet—to competitive viability. We spent months and years debating UNEs, switches, leasing local loops, and CLECs. We processed Section 271 petitions, case by painstaking case, on the premise and the promise that letting the big guys into long-distance would be accompanied by opening local markets to competition. In the end there were some competitive successes, but not enough to justify the claim that there was anything approaching real industry competition. Competition was under attack—no great surprise—from the big phone companies and—to me a bigger surprise—from an industry-compliant FCC that was more interested in blessing consolidation than it was in invigorating competition.

Now, in 2012, there are those who say “nice try” to those of us who pushed to realize the competitive goals of the 1996 statute, “but it didn’t work, get real with the new world, and back the hell off.” Well, I don’t believe the statute permits throwing in the towel like that, and I hope our new Commissioners won’t either. I am not here today to say we can turn the clock back to the days of yesteryear, but I am here to say that the Commission still has the obligation to promote competition—and that we have, in fact, numerous opportunities to give innovators and competitors a fair shot to challenge incumbents for the benefit of consumers. There is much more to be done before anyone throws in the “nice try” towel.

Better spectrum policies can reduce barriers to entry and incent competition. Unlicensed spectrum, database-driven spectrum access, and smart radio technologies are tools that can further competition. Clear requirements and enforcement on data roaming are important. Another tool should be action on special access. More access at lower prices would fuel significant telecom growth. The potential of special access reform for backhaul, competitive wireless, local governments, schools and universities, and small business is huge. Special access as presently constituted is a multi-billion dollar disincentive to competition and, in my judgment, a serious drag on the deployment of badly-needed telecommunications infrastructure. On another front, we should be looking at how other countries are deploying broadband and the policies they use to make it happen. We were quick to dismiss facilities sharing, for example, but if we can’t figure out how to incent competition through other means, then revisiting this option might yet be necessary if hugely expensive communications infrastructure is going to work to the advantage of all parties, especially that of consumers—and especially if we can’t jump-start competition any other way. It’s something that should remain on or near the table.

And, of course, vigorous anti-trust enforcement is always critical to competition. Anti-trust hasn’t been the strong suit of many recent Administrations, but Department of Justice and FCC action on the proposed ATT/T-Mobile transaction showed life where some had thought the oxygen was long gone. Now, with the proposed Verizon-cable deal, another canary is sent into the coal mine to see if the oxygen is still there. Why this deal should be so much more difficult than ATT/T-Mobile is difficult for me to understand. No matter what you call it—cabal, cartel, collusion, conspiracy in restraint of trade—I don’t see how anyone can claim that reducing competition in both wireless and wireline somehow advances the well-being of consumers.

Some will say we should just recognize telecom as a natural monopoly. About three-quarters of these people will also advocate wiping away anything that looks like government oversight or—the dreaded word—regulation. The other one-quarter would accept the monopoly but advocate imposing the oversight needed to protect consumers; good luck to them in the current Washington environment.

So far this may sound like a lot of Washington-speak and regulatory arcania, but it goes, I believe, to the epicenter of the challenges our country faces. We mostly agree by now, I think, that broadband is indeed the front-and-center infrastructure of the Twenty-first century. It is dynamic and opportunity-creating to an extent greater than any of the nation’s numerous earlier infrastructure challenges. It is part of the resolution of almost every big problem confronting us: creating jobs, making America more competitive in the global market-place, providing better health care, decreasing our energy dependence, stopping environmental degradation, educating ourselves and our children and grandchildren, and opening the doors of equal opportunity to all.

But let’s remember that earlier generations had to respond to infrastructure challenges, too. Turnpikes, roads, bridges, harbors, canals, railways, highways, and electricity. Not to mention plain old telephone service, too—these were all infrastructure build-outs. Each one of them was a huge challenge in its own time. And each one of them helped jump-start the economy; each one created thousands of jobs; each one contributed to making our people more productive and our country more competitive.

(A brief aside that I hope you will permit a former Commissioner who feels no longer constrained to limit his presentations to communications: It is beyond reprehensible that we have let so much of that earlier infrastructure decay and rot. Visitors from overseas often can’t believe what they see when they come here. Second-rate roads, collapsing bridges, dysfunctional transportation, ancient utilities—the investments that powered us to prosperity and to first-among-the-nations standing—going to seed. Unattended and under-invested, our infrastructure under-performs. That means America under-performs and we all suffer—not just a bumpy ride down a shoddy road, but a stalled economy producing too few jobs. If we can’t maintain the basic infrastructure bequeathed to us by earlier generations, then tell me please upon what we are supposed to build Twenty-first century American prosperity.)

Putting aside my aside, let us return to broadband, where we have to both build and maintain. Let’s hope we do a better job here. When I arrived at the Commission’s famed portals in 2001, the United States was in the vanguard when it came to broadband penetration. This was not surprising—the Internet was invented here and got its start here. Fast forward 11 years later and we’re Number 12 or 15 or 20 in the world. Some would quibble about which ranking is correct—but none of them is anywhere close to where your country and mine needs to be. I don’t say this because I want us to be able to pin a ribbon on our chest and brag about our number-one status. I say it because we’re not coming back—America is not coming back—unless and until we get this infrastructure right.

The reigning wisdom in 2001 was don’t worry, be happy, the market achieves all things. That premise has always been a mystery to me because I never really quite “got” how business would go out and build broadband where there was no business case for it to do so. Why should we expect it to? That wasn’t how those roads and bridges and canals and railroads and highways usually got built. Why would broadband infrastructure be different? Those earlier infrastructures were generally built with significant private sector-public sector partnering—private sector innovation and enterprise fueling the engines of construction, but guided by a public policy vision of where the country needed to go and some incentives to help get it there. Public-private partnering. But the dispensers of the reigning 2001 wisdom, even though they saw themselves as defenders of the American Way, went instead with a curious hands-off marketology that ignored the past and thereby short-changed the future. For eight frustrating years—more than that, really—while other nations built their broadband infrastructures, the Commission busied itself with legalistic legerdemain, reclassifying services, deregulating, and blessing almost every industry consolidation proposal that came our way—and there were a lot that came our way. We took our eyes off the prize, forgot the lessons of the past, and America paid a price it should never have had to pay.

Both the public and the private sectors failed us—and I would say in that order. I’ve already mentioned the public sector short-fall. On the business side, one of those things that stay the same in history is the driving thrust of business to grow, to consolidate and to control markets. Believing that doesn’t require you to buy into some “good guy-bad guy” theory of history. It’s part of the energy of capitalism and a force that inheres in that very system. Entrepreneurs take risks to grow and the economic gains can produce great social progress. But the corollary is that society takes risks by encouraging business to grow and, unchecked, industry concentration can cancel out many of the benefits. A principal obligation of sound government is to retain some balance so that the system is serving the needs of the nation.

Right now the balance isn’t there. It’s been upended, first, by the undisciplined power of money in our politics and, secondly, by the inability of the public sector to exercise anything approaching adequate legislative or regulatory oversight. The influence of money has always been a problem for our politics and so it will always be. But as someone still fascinated by the study of history, I cannot think of another era in the annals of our past, including the notorious Gilded Age of the late Nineteenth century, where such huge and usually undisclosed piles of money have so eviscerated our public dialogue and stopped needed reforms in their tracks. Public disclosure would help, but only real limitations on the money itself can ever solve this problem. I’m not talking about couriers delivering envelopes of cash to the powers-that-be—although sometimes it comes pretty close to that—but I am talking about a political climate in Washington and the statehouses where money wields outrageously excessive power, and where access, if not consciously denied, is the end result of a system where money has the inside track. And I am talking about a business climate so dramatically changed from what it used to be that stock-holders trump stake-holders too much of the time. Workers and local communities have a right to expect more, but the reality is they have lost standing and clout in this unforgiving multi-national corporate age. When investments are decided on the basis of how the next quarterly report plays on Wall Street rather than how they will benefit the company’s totality of stakeholders, we ask for trouble. And, very often, trouble is what we get.

In the broadband age, the power of unregulated marketology and the disinclination of government to do much about it lead to an unprecedented historical irony. We have available to us the most open, dynamic and opportunity-creating technology ever devised, but its wings are clipped. Less and less are a thousand points of invention and innovation controlling out technology future, while more and more the models of consolidation and bottle-neck control threaten it. This is not to deny the many good things happening out there, but it is to note that the system we have is making it harder for those good things to deliver their full potential. The struggle for an Open Internet is a new chapter in a very old story. It’s the story of gate-keepers and toll-collectors who have always been there when new technologies or businesses come along. Again, that’s something we should expect. It is also something we need to protect against. To put our heads in the sand on this one would have serious long-term consequences. For most of my decade at the FCC, we at least knew who the gate-keepers were. But as I noted some years ago, the gate-keepers of the future may not be the same gate-keepers we had in the past. I believe there is significant action the Commission can take under current authority to protect against the harms of broadband bottle-necking. But I also believe that we are long overdue for a deeper and more serious national dialogue about how to ensure that the Internet itself doesn’t go down the same road that so many of our earlier communications industries traveled.

“It’s not a problem,” some will say, “it will all work out.” Yet a week seldom goes by when there isn’t a dispute about openness, pricing, privacy, the perils of search… you can add to the list. We have already had numerous specific cases and complaints. And we know, by the nature of business enterprise itself, that the quest for absolute control is always going to be there. Again, why would broadband and the Internet be any different? By now it should be clear to all with eyes to see that this is an issue deserving a better public dialogue than it’s been receiving. And let’s resolve here and now that when we have that debate, we won’t allow it to be hijacked by those whose only argument thus far has been to say it’s about “regulating the Internet.” It is about freedom from bottlenecks and making sure that when the business imperative of control raises its head, we have already seen to it that consumer and competitive safeguards are in place. We cannot wait to do something until the power has grown beyond our ability to rein in. We know the wages of that sin already. So how much better off we’ll be if we have some guidance and rules of the road already in place.

“Wow, 20 minutes into his speech and he hasn’t mentioned media yet,” some of you may be thinking. The good news is I have only a few minutes left to talk. You know what the bad news is! But actually, my remarks lead inevitably to media or, as it should be more aptly designated for purposes of this speech, information infrastructure.

When we first started talking seriously about developing a broadband strategy in 2009, the news and information implications of broadband, and the inextricable ties of new media to traditional newspaper, radio, television and cable media, were not immediately apparent to everyone at the FCC. We made some progress, though, and the National Broadband Plan certainly teed up the issue. But meeting the challenge goes far beyond recognizing the challenge.

Here is the challenge: making sure that every citizen has the news and information he or she needs in order to make informed decisions. This is the premise and prerequisite of self-government. It is a democratic (that’s a small “d”) imperative that dates back to the Founding Fathers. Different tools and technologies are at play nowadays compared to then, but making sure that our information infrastructure keeps us informed is the ceaseless imperative. Back in Washington and Jefferson’s time the infrastructure was post offices and postal roads to ensure the circulation of newspapers throughout the growing young country. They took the challenge seriously—subsidizing this effort was the largest national expense after defense and it employed the majority of people in government. Today’s information infrastructure is very different. It is a slowly-evolving hybrid of traditional and new media with most of the news—over 90% by most counts—originating from the newspaper and TV bureaus. That kernel of news gets puffed and popped a million ways on the Internet, but the original reporting is done by a precious and dwindling few. It’s not old media vs. new media—we have one media environment, it will continue its hybrid nature for still many years, and we need to consider it as a whole, even while it constantly changes. The Internet is capable of nourishing our civic dialogue and enhancing the town square of democracy—paving it with broadband bricks, so to speak. Exciting innovation and experimentation are already occurring there and even some successful business plans. Not the kind of business plans necessary to sustain journalism on the level we once knew it in the traditional media, but promising nevertheless. Barriers to entry are low, links are ubiquitous, and we can all be participants once online. But let’s be candid—the promise of new media, its potential to sustain a viable information infrastructure, is nowhere close to being realized.

This should be at the top of your list of concerns as citizens. What we have now is a paucity of facts amid an avalanche of shouted opinion. A shortfall of substance amid buckets of fluff. Important stories not just untold, but undiscovered. Investigative journalism hanging by a life thread, denied the resources needed to hold the powerful accountable. Thousands of reporters walking the streets in search of a job rather than walking the beats in search of a story. Glitzy infotainment masquerading as news. Homogenized music and culture stomping out regional and local artists. Diversity groups depicted in caricature when they are not being completely ignored.

Part of the reason we have all these issues I have broached this afternoon is that we are fast losing our reputation as a news literate people. If there is one great need we have right now it is to become again a news-literate society, understanding and engaged in the substance of public issues and armed with the facts to make good decisions. Without a media that can dig for facts, cover the beats, and separate hard facts from bloviated opinions, our chances of mastering the many deeply serious challenges this country faces are downright dismal. There are really tough problems facing us right now. They go to the heart of reinvigorating our economy, ensuring good livelihoods for our citizens, and making sure we are once again the land of opportunity. There is no guaranteed happy ending here. There aren’t even great odds—unless we begin to understand the mountains America has to climb to redeem its still great promise.

So, to me, getting our information infrastructure right is Step Number One to getting our democracy right. My greatest regret after more than 10 years at the Commission is that we are not further along on the road to getting this done.

For those of you who ask me what I’m going to be doing in my post-FCC life, I have no intention of letting these issues go. They are going to determine what our future is, what our nation will become. I continue to hope the Commission, which is doing such good work on so many fronts, will at long last step up to this issue which has been festering for over 30 years now. My aim is to help it along, no longer from the inside out but from the outside in. At the grassroots, where people live. And where an increasing number of them—and I see them wherever I go—have a sense that something is amiss, that they’re being short-changed when most of their political information comes from negative and usually anonymous Super Pac ads, and they ask whatever happened to their local news bureaus and their local music and culture. Forty years in Washington have shown me that good things can happen from the top down. That’s still true. But very often in our history the systemic stuff that actually enhances democracy and moves us forward begins at the grassroots. It gathers power community by community, spreads sometimes slowly but ineluctably across the land and, finally, gathers unto itself the force to be no longer denied. I believe that’s what needs to happen on these issues. So out there is where you’ll find me.

Finally, just a word of congratulation to Jessica and Ajit now that they’re official Members of the FCC. I watched your confirmation hearing and heard Chairman Rockefeller tell you, movingly and eloquently, how critically important and how daunting these posts are. How well I remember him telling me that, too, and it resonates more powerfully with me today than ever. These are issues that will make us or break us. I know you’ll do your best and that your best will be very good. And I’ll be pulling for your success in overcoming these challenges. Who knows, if you really succeed I can turn the lights out at Motel 6 and come on home.

Thank you very much.