Regulatory Parity and Other Misgivings

Any child knows that you can’t treat all water the same. Wading across a stream, navigating a river and sailing an ocean are very different things. Everyone knows that you cannot apply the same rules to mines, shorelines and forests. Just because they are all land doesn’t mean they are the same. This bit of common sense occasionally eludes communications companies.

Ever since the beginning of broadcast regulation, radio licensees have argued that they should be treated just like newspapers. After all, they said, they are both in the communications business. Fortunately, the courts could be relied upon to answer: Broadcasters are given a free federal license to use public property (the spectrum) to communicate. Newspapers do not require a license to use their printing presses or paper or ink.

Well, they’re at it again. This time they have a fancy new name for it – "regulatory parity." And it’s not just the broadcasters – all the communications companies are joining in this new variation on an old theme.

I first heard about regulatory parity when a former FCC economist, Michael Katz, laid the idea out before a group of us at a conference about five years ago. I could see the industry representatives licking their chops. They had only recently convinced mainstream media, and thus most of the rest of us, that creating rules on behalf of the industry was "de-regulation," while creating rules on behalf of the public was old-fashioned regulation.

Five years after Katz introduced the idea, Rep. Fred Upton (R-Mich.), chairman of the House Subcommittee on Telecommunications and the Internet, is telling reporters that in revising telecommunications legislation "the ‘bottom line’ was to achieve deregulatory parity." Upton is calling for four hearings focused on Internet services and hopes to introduce legislation by the August recess.

The simple underlying premise behind regulatory parity is that because telephone, cable and broadcast companies are competing to provide consumers communication products they should be treated equally. Why should broadcasters suffer the burdens of license obligations? The cable companies don’t have this problem. Why should cable companies suffer the burdens of local franchise commitments? The broadcasters don’t have to report to local communities. Why should telephone companies have to share their infrastructure with competitors? The cable companies don’t have to. And, of course, what the industry means by regulatory parity is getting rid of rules they don’t like.

Any serious examination of the laws applied to telephone companies, broadcasters and cable companies will reveal a complex set of rules arising from very different political and legal histories, different economic structures, different engineering challenges, and different jurisdictional relationships. As Sherille Ismail demonstrated in his article "Mapping Regulatory Treatment of Similar Services," Katz is not comparing apples and apples; there are so many important differences between broadcast, telephone, and cable companies that the simple notion of similarity quickly falls apart. Intelligent policymaking does not mean ignoring real distinctions and treating everything that seems similar as though it were the same.

In the Senate, the chairman of the Senate Commerce Committee, Ted Stevens of Alaska, has not embraced "regulatory parity" as the goal of the Senate’s re-examination of the Communications Act. Sen. Stevens has instead announced a series of "listening sessions" before holding formal hearings. Sen. Stevens understands the importance of communications services to his rural constituents. He has long been a champion of universal service, distance learning and public broadcasting. Unfortunately, Sen. Stevens now seems to view legislative action regarding telecommunications services as limited to marketplace considerations. In a recently published article, Stevens writes:

the new common denominator should be what’s good for the American consumer and innovator. We must find the proper balance to make the best communications forms available to all Americans — rich and poor, rural and urban — while promoting freedom and creativity for those who seek to provide such communication to our market. In the end, when we find the proper balance and update what currently exists, the marketplace — the consumer — will determine what succeeds.

Unfortunately, Stevens fails to mention the needs of children and parents who are not always well served by the marketplace. Nor does he mention the needs of public schools or libraries or nonprofit medical centers. Perhaps most disturbing is his failure to mention the needs of citizens as distinct from the needs of consumers.

Sen. Stevens should open up his "listening sessions" to Americans whose concerns about communications have not always been well served by leaving it up to the marketplace.

Mark Lloyd is a senior fellow at the Center for American Progress.

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