Protection Payments: Licensed vs. unlicensed radio rights

I have just realized the blindingly obvious: the main value of a radio license is the right not to be interfered with, rather than the right to transmit.

This claim should be testable by establishing the degree to which the protection against interference influences the prices of licenses sold at auction. I’m working with Johnny Chan at the University of Washington to generate some results in this area. It’s certainly true anecdotally; M2Z has argued that T-Mobile knew its AWS-3 license, which had an adjacent band which would generate more interference, was worth less and so paid less at auction.

Proponents of license auctions charge that unlicensed allocations mean that “people” (they’re thinking of Google and Microsoft) are getting something without paying for it. It’s true that users of unlicensed radios don’t pay for a license, and it’s also true that both kinds of licenses confer some permission to operate a radio.

But there’s a big difference: a licensee can stop others from interfering with their operation, whereas an unlicensed user not only may not interfere with licensees, but also has to accept interference from all comers.

The big difference between an exclusive-use license and an unlicensed regime is excludability rather than autonomy, to use terminology I defined in an earlier post (Protecting receivers vs. authorizing transmitters). (Regarding a property, exclusivity means an owner can control what other people do, while autonomy allows an owner to act without hindrance.)

However, since radio licenses are defined in terms of transmission rights rather than receiver protections, what’s being sold is autonomy rather than exclusivity.

In practice there is a gamut of license types, with increasingly strong excludability rights: from unlicensed, to licensed by rule, to secondary licenses, and then primary licenses. The more excludability you get, the more a license should be worth. We’re planning to do regression analysis on US auction results to see if this is the case.

If, as we’re working to show, the main benefit of a radio license is protection from interference rather than the right to transmit, then current radio policy is misconceived in focusing on transmit rights rather than receiver protection rights. While it’s true that defining transmit rights implicitly defines the receiver rights (again, see Protecting receivers vs. authorizing transmitters), not making receiver rights explicit guarantees downstream conflict, as the M2Z/T-Mobile argument over AWS-3 has shown.

A view on the policy making stream

BusinessWeek writes that IBM is pushing “stream computing”, which is processing incoming information on the fly rather than putting it in a database first, and then mining it.

I’ve been trying to mine information in the FCC’s Electronic Comment Filing System (ECFS), the repository for all interactions that petitioners have with the agency. The BW story got me thinking what one could do if updates to ECFS were easily accessible on the fly, along the lines of the proposal by Ed Felten and colleagues that government should expose underlying data rather than creating portals.

One could do a lot with just the metadata, that is, cover information on who submitted a document to ECFS. A little extra processing to, say, extract information from the filed documents on all the people present in a meeting, would add a great deal of value. One could also extract information about what topics are being discussed by doing semantic analysis of comments and reports of meetings between petitioners and the agency.

Some things researchers (not to mention commercial information providers) could do with this kind of intelligence:

Track the ebb and flow of meetings related to a particular proceeding

Be notified when a specific company, company in a coalition, etc. reports a meeting with the agency, and see it in the context of other meetings by opponents and allies

Put a watch on the meetings in a particular bureau of the agency

Track the personalities – who’s meeting with whom, who hasn’t been seen lately, who seems to be a rising star. I’ve been told that John de Figuieredo predicted the importance of William Kennard before he was tapped for the FCC by noticing that he was in a lot of key lobbying meetings. (Caveat: I may have misremembered the characters in this anecdote. Please correct me if you know better...)

Given time series information one could develop leading indicators for when a proceeding was heating up, or when something big was brewing.

Of course, the Garbage In, Garbage Out Rule applies; if petitioners file late, or misrepresent their interactions (i.e. lie), all the stream computing in the world will be for naught. We may need a suggestion I heard from Bob Pepper, a former FCC staffer now at Cisco: make petitioners warrant that their submissions are true, on penalty of perjury. Curiously, there is apparently no requirement for petitioners to tell the truth, and no penalties if they lie.

The “business ecosystem” subtext

A feature in the new Christian Science Monitor on restoring the Galápagos to their state before the invasives arrived – rats, dogs, lizards, and especially humans – suddenly revealed to me why the “business ecosystem” rhetoric makes me uneasy.

Here’s the key passage:

“If an ecosystem is a community of life forms that have evolved together and achieved equilibrium, then the restoration of that ecosystem begins with the removal of everything that upsets the balance.”

Users of the “business ecosystem” metaphor perhaps aren't even conscious that their goal is equilibrium, but I’ve now realized that it’s a foundation of this world view. Everybody needs stability in their lives, even when they also crave novelty; this is particularly true for large technology companies.

Catastrophe is as much a part of complex system behavior as continuity, but it's something we'd rather not think about too much. Radical change is bad news for incumbents - and it's bad for all of us when the "incumbents" are rare plant and animal species on the edge of extinction - but it is good news for newcomers trying to make their mark and change the world.

P.S. Here’s the quote in a little more context:

Certainly, reconstructing nature is a prospect fraught with contradictions. Can it really be natural if it is created by human design?

Cruz and fellow conservationists operate on a simple formula: If an ecosystem is a community of life forms that have evolved together and achieved equilibrium, then the restoration of that ecosystem begins with the removal of everything that upsets the balance. And so, somewhat paradoxically, the conservation of Galápagan ecosystems inevitably starts with a meticulous campaign of eradication. Animals introduced by people must go. Once the slate is wiped clean, native species, some of which continue to exist only in captivity – like Lonesome George, the iconic giant tortoise who's the last of his breed – can be reintroduced. Then the community, a system of checks and balances honed to perfection over time – of grazing tortoises and plants, birds and seeds that need each other – can reestablish.

Visualization Literacy

Bommarito and Katz’s visualization of Senate campaign contributions is a wonderful demonstration of the potential for making large amounts of government information accessible.

Having focused successively on campaigns to improve literacy, then media literacy, then design literacy, compelling work like this suggests that the time may soon come for "visualization literacy": the skills a citizen needs to evaluate the information presented via data visualizations.

Maps are a long-established visualization tool. They may purport to be value neutral, but of course are not. Depending on who’s paying, some maps show churches, and others show hotels. Every map embodies decisions to show some things and hide others, which means that every map is trying to persuade us to see the world in a certain way.

In the same way, more recent data visualizations have a more or less hidden agenda by virtue of their choices of what to show, and how to show it.

Looking deeper, the data being visualized is itself a subset of all possible information, and its collection is based on a model of the world that entails various biases. Data has an agenda, not only in what was collected, but in how it was gathered, and how it is categorized.

Finally, the interface that one has to use to access the data ("interface" as the set of commands and messages, not the visuals) has an agenda. If software code implements an architecture, as Larry Lessig would have it, then the code interfaces place bounds on the architecture. Even if all data were accessible with a given interface, some things will always be easier to do than others. This biases not only the data that is represented, but also the ways in which it is represented.

Information at every level – from data selection, to interface calls, to visualization – comes with an agenda. By the “if I can imagine it, it’s already been done” rule, seminars in the semiotics of visualization have surely already sprung up.

Update 4 May 2009:

Courtesy SiliconValley.com, here's a recent example of how maps carry meaning: Historical maps of Japan from Berkeley's East Asian Library collection that were offered as layers that could applied in Google Earth have had to be sanitized to remove references to burakumin villages. David Rumsey, who oversees the Berkeley collection, acknowledged, "We tend to think of maps as factual, like a satellite picture, but maps are never neutral; they always have a certain point of view."

Lessons From Software For Patents, vs. Solving the Software Patent Problem

Software patents may be going the way of network neutrality: an arcane policy problem once the preserve of a small circle of wonks is becoming a politicized slanging match. In both cases an esoteric but important research question has become a point of leverage for certain interest groups. In both cases the subject (“network neutrality”, “software patents”) is at best poorly defined, typically has multiple possible meanings, and at worst is so vague as to be useless. And in both cases, the poster child is the small-time innovator, while the sugar daddy is a big money player minimizing costs (e.g. content providers who love net neutrality, and VCs who hate software patents).

I was fortunate to attend the Silicon Flatirons conference on Evaluating Software Patents last week. The legal scholars there agreed that there were many, incompatible ways to define software patents, and the practitioners agreed that even if a definition were stipulated, they’d find a way around any additional burdens imposed by its use.

However, good arguments were made that software has added something new to the intellectual property mix. None of the following attributes of software are decisive, but together they point to changed dynamics:

There is a very high likelihood of infringement when producing a software-based product since so many patents are implicated in any application

There is a large group opposing software patents (whatever they are) because it undermines their business model, notably the open source / free software movement

Unlike many other inventions, software can also be protected via copyright

A very large proportion of current patent applications involve software

Software-related products are more intangible than traditional mechanical inventions

Programmers as a community are more hostile to the use of patents than other inventors

As I understood the observations of the legal scholars (John Duffy, Mark Lemley, and Michael Meurer – apologies for lumping their views together) it didn’t matter if “software” patents weren’t a definable category; new legal doctrines were required to address the new problems raised by software. For example, a rapidly moving industry like software has a more pressing need for a high standard of obviousness than earlier technologies of more placid times; and the problem of inadvertent infringement needs to be addressed on its own terms, and not just for “software” patents.

Prof. Lemley also pointed out that over the last three years, the courts have fixed most of the problems that have been grist for the debate. Legislation and reform of the patent office will be a long time coming, and we shouldn’t – and don’t need to – wait for them.

The lesson generalizes: rather than tie new methods of governance to the particular technologies or industries that give rise to new problems, one should abstract the problems and solve them generically. Now if only that had happened with network neutrality…

Two-way transparency

“Transparent government” is the watchword these days – but it’s the transparency of the proscenium arch. The curtain has been drawn aside a little and we can watch the players, but they care little and know less about what’s going on in the audience. The groundlings aren’t asked to shape the play.

It’s important for citizens to be able to see into government; but it’s just as important for government to understand what citizens want. And in a democracy, it’s most important for citizens to influence government.

Web 2.0 is giving participatory democracy a fillip, as online social networks are drafted into energizing voters. However, much of the “we’re listening to you” is still theater: citizens are asked to submit YouTube videos, and a select few are played to simulate that someone is paying attention.

It’s not (just) that politicians don’t want to listen; making sense of the individual opinions of thousands or millions of people is very hard to do in a nuanced way. The dominant method is still counting noses, whether in an election, an opinion poll, or keeping track of how calls from constituents are splitting on a contentious issue. Potential knowledge is boiled away, leaving only numerology at the bottom of the pot.

Advanced computation can help make sense of citizen input. Semantic analysis tools developed to filter spam, mine search queries, collate machine-submitted bug reports, and extract signals intelligence can be applied to provide a narrative. Old technologies should be still be used – and used more intensively. Regulatory agencies should poll citizens, and not just depend on lobbyists and lawyers to tell them what’s important. ICT can also turn citizen input from a burden to a blessing if it becomes a cost-effective way to leverage democratizing innovation into innovative democracy, using all the social networking and idea market tools of Web 2.0.

Ecosystems: sustainability or innovation, pick one (at a time)

Business folk, particularly those in IT, love the ecosystem metaphor (perhaps erroneously). One of the reasons, I realized listening to Pamela Passman on a panel at the Silicon Flatirons annual conference, is that it provides validation to both incumbents and challengers. Passman advocated creating a healthy internet ecosystem, and emphasized the importance of both sustainability and innovation. [*]

Both of these are characteristics of ecosystems, but not, as I understand it, at the same time. For example, mammals could only start rise after the extinction of the dinosaurs, prompted by a massive meteor strike or large-scale volcanism. The innovation that led to Homo Sapiens resulted from a catastrophic breakdown in ecosystem sustainability.

The adaptive cycle model developed by Buzz Holling and his collaborators has ecosystems constantly cycling through four stages: exploitation or growth, a mature conservation phase, a catastrophic release, and finally reorganization leading to new growth. To take the example of a forest: a fire, drought, or insect infestation triggers the breakdown (release) of the intricate and productive biological web that had been established during the preceding conservation phase. This sets the stage for reorganization, during which species that had been excluded in the prior conservation phase move in. As they become established, exploitation of open niches leads to growth. Eventually, we reach another conservation phase. Everything settles down; all the niches become filled, and the network of connections between biomass and nutrients becomes increasingly tight. This is a stable and very productive stage, from the point of view of resource utilization and biomass production. However, the tight linkages make it fragile to sudden release, starting the cycle again.

Ecosystems therefore oscillate between stability and innovation, swinging through repeated crises. By focusing on the appropriate phase, both incumbents and newcomers can see themselves in an ecosystem view. During an exploitation/growth phase, which we have with the Internet at the moment, newcomers are validated by looking back to the preceding reorganization phase which led to their rise, and (re-)emerging incumbents look forward to the impending conservation phase during which they will reap their reward.

What does sustainability mean in this context? Certainly not eternal stability, since that’s not possible. At best, it’s management the ecosystem to limit the severity of the release phases while still generating enough restructuring to allow innovation.

The moral of this story is that ecosystems talk hides but does not end the endless tussle between newcomers and incumbents. Wise governance needs to find a way to extract the social benefits of both, while recognizing that each represents the eclipse of the other.

Note

[*] Shane Greenstein had a great paper at the conference on what makes for "healthy" behavior in the internet industry; forthcoming in the Journal on Telecommunications and High Technology Law. For a brief summary, see Rocky Radar

Evolved to revere teachers

I’ve been keeping an ear on an interview with an Aikido teacher that S. has been listening to. Shaner Sensei frequently points out and marvels at the insights and skills of the teacher that founded this particular branch of the art.

The meditation technique I’m learning is also built around a charismatic teacher, in spite of himself; he keeps rejecting “gurudom”, and focuses attention on the practice. But this teacher, in turn, deeply and publicly reveres the teachers that preceded him.

A predisposition to teacher-reverence is probably in-born. It’s easy to construct an evolutionary biology Just So Story to explain it. Learning is clearly adaptive, and our genes encourage us to engage in it by making learning pleasurable. Since one learns better when one trusts the teacher, our genes predispose us to revere teachers and put them on pedestals.

Like all behaviors, this has risks as well as benefits. Along with the ability to surrender ourselves to a teaching that brings benefit, comes a proclivity to give ourselves over to people who lead us into evil or oblivion. The problem is that it’s hard to know where a path leads when embarking on it. If one really knew the end-point, one would already have completed the journey. Teacher reverence will therefore continue to beckon us onto both good paths and bad.

This argument goes through with minimal changes for leader-worship. It probably also has a basis in evolutionary fitness, and is also double-edged. I wonder whether one is related to the other? Both are based in respect for a leader, though the purposes (learning and inter-group conflict, respectively) are different.

Note: The image above is a statue of the founder Swami Vishnu-devananda at the Sivananda Ashram Yoga Ranch. It comes from slide show in a story on spiritual retreats in upstate New York by Shivani Vora, “The Simple Life”, The New York Times, 12 December 2008

FCC Reform paper

My recent posts on reforming the FCC (here, here, here and here) culminated in a short paper for a conference on this topic in DC on 5 January 2009. I also spoke on one of the panels (video).

Voting within the Margins

Al Franken seems (for now, at least) to have won the Minnesota Senatorial election by 225 out of a total of about 3 million ballots cast: a margin of 0.0001, or 0.01%.

This margin of error is tiny; it's of the same order as the difference in length of your car between a day that's freezing and one that's in the 80's. (See here for steel's coefficient of thermal expansion if you want to check my math.)

This is so small that the result is a toss-up for all practical purposes. Presumably, however, society cannot accept that election results are random; we have to pretend that certainty can be had.

The margins of error of the voting process are sometimes larger than the margin of victory of the winner; this was certainly the case in Minnesota. Philip Howard of the University of Washington found seven such cases in the 2004 elections ("In the Margins: Political Victory in the Context of Technology Error, Residual Votes, and Incident Reports in 2004," 1/6/2005, PDF). He used three ways of thinking about error in an election: technology error, residual votes, and incident reports. For example, Howard cites a 2000 Caltech/MIT which found that the error rates for a large variety of vote counting processes were all 1% or more. (Recall that the margin of victory in Minnesota was one-one hundredth of this: 0.01%) He concludes: "In each case, the electoral outcome was legitimated by elections officials, not the electorate, because in very close races the voting process cannot reveal electoral intent."

In Minnesota, with all the recounts, many of those errors were removed. But there are many kinds of randomness in an election beyond the measurement: someone absent-mindedly ticking the wrong box, someone else deciding at random not to vote on a given day, or people who mistake one candidate for another. In the end, we just don't know the answer, and a coin toss (whether overt or hidden) is a fine way to decide the result. If it was a bad choice, the electorate can throw the bum out next time.

William James, consciousness, and the non-existence of spectrum

We've just started another wonderful Teaching Company course: Daniel Robinson on Consciousness and Its Implications. He quoted from William James's essay Does "Consciousness" Exist? (1904), which reminded me of my spectrum preoccupations:

"I believe that consciousness, when once it has evaporated to this estate of pure diaphaneity, is on the point of disappearing altogether. It is the name of a nonentity, and has no right to a place among first principles. ... For twenty years past I have mistrusted conscousness as an entity: for seven or eight years past I have suggested its non-existence to my students, and tried to give them its pragmatic equivalent in realities of experience. It seems to me that the hour is ripe for it to be openly and universally discarded.

"To deny plumply that consciousness exists seems so absurd on the face of it — for undeniably thoughts do exist — that I fear some readers will follow me no farther. Let me then immediately explain that I mean only to deny that the word stands for an entity, but to insist most emphatically that it does stand for a function." (My italics.)

The distinction between entity that doesn't exist, and a function that does, applies equally well to spectrum. (I outlined my argument regarding spectrum in Newton, Leibnitz and the (non?)existence of spectrum; for more detail, see my article De-situating spectrum: Rethinking radio policy using non-spatial metaphors.) To mash-up William James:

To deny plumply that "spectrum" exists seems so absurd on the face of it — for undeniably "signals" do exist — that I fear some readers will follow me no farther. Let me then immediately explain that I mean only to deny that the word stands for an entity, but to insist most emphatically that it does stand for a function.

In other words, the proper subject of both psychology and wireless regulation is behavior and its results. This becomes all the more important as radios become more sophisticated.

A simple example: in the white space proceeding, the FCC specified different maximum transmit powers for different kinds of unlicensed radios, but required that they all avoid wireless microphones using the same detection sensitivity. This doesn't make engineering sense, since the radius of interference for weak radios is smaller, and they therefore do not need to detect microphones at the same range as strong radios. Their detection therefore doesn't have to be as sensitive. A more efficient alternative would be for the unlicensed radios to vary their detection sensitivity depending on their transmit power. The "usable spectrum" is therefore a function of the behavior of the radios concerned, and not just frequencies.

In a similar vein, the boundary between "spectrum licenses" is not really -- or not just -- a frequency, as it might at first sight appear. (Let's leave aside geographical boundaries.) There is no sharp edge, with a radio allowed to transmit any power it wishes "inside its spectrum", and none at all "outside". Instead, there's a gradation of decreasing power for increasing frequency difference. There isn't a boundary where one thing ends and another begins; rather, the boundary is a behavior. This underlines that spectrum, like consciousness for Henry James, isn't an entity, but rather a function.

Factoid: Vista is worth negative-$150

According to Silicon Valley Insider, Dell is now charging customers $150 to downgrade from Vista to Windows XP. According to the story, Dell started charging customers an extra $20 to $50 for a downgrade to Windows XP in June, and by October, Dell's XP premium was up to $100.

Not a happy product if people will pay large amounts to avoid having to buy it.

And I thought that old joke about "first prize is a week in Palookaville, and second prize is two weeks there" was just a joke. . .

Forever blowing bubbles

In a Wall Street Journal op-ed (PDF) Paul Rubin* suggests that bubbles and crashes are a natural part of capitalist markets. More to the point, the very factors that have recently increased the efficiency of markets – notably the internet – have also facilitated the formation of bubbles.

Technology is double-edged, as always: the internet facilitates both the functioning and malfunctioning of markets. Of course, the difference between function and malfunction is in the eye of the beholder. As John Sterman famously said, “There are no side effects—only effects.”

While this is a perennial problem, the internet may have caused a qualitative change in the degree of interconnection, which leads to significantly less resilience. Note the paradox: The internet is more resilient as a communication system, but it causes the systems that use it to be less resilient.

The corollary is that regulators face an impossible task: one can’t eliminate the downsides of the internet without simultaneously eliminating the benefits.

My study of the complex adaptive systems literature leads to the same conclusion:

• more interconnected systems are less resilient
• crashes are healthy, because they allow new entrants to flourish
• the regulatory task is not to avoid crashes (this just makes the eventual correction worse) but to manage them

As if the regulatory job weren’t tough enough, the political challenge is even harder. “This should never happen again” are the first words out of a politician’s mouth after a catastrophe. That’s what people want to hear, but it’s not realistic – and not desirable either. It will surely happen again, and it’s necessary for renewal and innovation. Managing crashes includes both reducing their severity and mitigating their impacts.

[*] Paul Rubin is a professor of economics and law at Emory University and a senior fellow at the Technology Policy Institute. He served in a senior position in the Federal Trade Commission in the 1980s.

Factoid: more computers than people in Israel

According to a country ranking of computer ownership published in the 2009 edition of The Economist’s “Pocket World in Figures”, there were 122.1 computers per 100 people in Israel in 2006.

Russia was in the same league as Namibia, with 12 computers per 100 people. The US, Britain and Australia were at 76 per 100 people.

Reforming the FCC: New Organization

The recommendations I outlined in Reforming the FCC: New Capabilities will only bear fruit in a suitable institutional setting. This post suggests some organizational responses to the challenge of managing 21st century communications in the United States.

In-house expertise

All participants in a complex adaptive system, including regulators, have to innovate to keep pace with ever-changing circumstances. However, change carries risks. The system will adjust to new rules as soon as they are promulgated, and there’s no way to turn back the clock.

The variability and unpredictability of adaptive systems means there cannot be a single, fixed, optimal strategy. The only viable approach is continuing learning and adaptation. As society and technology change ever faster, the institution has to learn faster and plan better. The FCC needs to be a learning organization which adapts at a much faster rate than was required in the past.

The FCC needs to have a strong, in-house basis for understanding the state of play, and anticipating developments. This is necessary both to make smart decisions about how (and whether!) to intervene through rule making, and to make smart/robust rules. Learning and planning are tied together through simulation and other safe-to-fail experiments.

Simply depending on the adversaries in proceedings to provide technical information is not sufficient; even if the input were not biased, one would still need in-house expertise to make informed choices. The Commission has this level of expertise in wireless technology, but perhaps not to the same degree in internet/web technology. Staff can make nuanced judgments about the likelihood and mitigation of radio interference, but has less experience judging network management claims, the implications for consumer privacy of data aggregation and behavioral advertising, or the most effective way to implement law enforcement surveillance on the internet.

With strong in-house capacity, the FCC could make effective use of outside consultants, which have employed too rarely in recent decades. It could also find ways to exploit the goodwill and expertise of volunteer experts in academia and society at large.

The multiple uncertainties of adaptive systems mean that every institution needs a long memory. Slow variables are often the ones that trigger radical change, but they can only be observed with prolonged attention. The institution needs a strong, constantly renewing base of career officials that can bridge across the terms of political appointees. There has been a renewed awareness in recent years of the degree to which the tenure of career professionals can be vulnerable to political processes.

Individuals matter. The interlinking of activities at various layers of a complex system means that in-house entrepreneurs (and reactionaries) can have disproportionate influence, particularly when a system is in flux. It’s important to foster independence and adaptive management skills, particularly in the American setting where top leadership is politically appointed, and changes frequently. Secondments like Chief Economist and Chief Technologist are an important tool, and should be complemented with fellowships from industry and academia at middle and entry levels in the organization.

New Structure

Developing an open, adaptive and principles-based approach to policy making, and building the capacity to perform new functions, will require changes in the institution’s organization.

The FCC is currently organized, in large part, to reflect the Titles of the Communications Act(s): the Wireline Competition Bureau is responsible for wire-based telephony; the Wireless Telecommunications Bureau oversees spectrum, including cellular telephony; the International Bureau covers satellite and international matters; the Media Bureau regulates radio and TV services. However, the mapping to statute is not exact, which suggests that organization by Title is not a necessity: a re-organization does not require a new Communications Act.

Such a structure cannot effectively address questions that cross industry boundaries – which, in the 21st century, is most of them.

A more effective and stable structure would be organization by policy mandate. This would replace the industry-oriented bureaus by departments with responsibilities for (1) public safety, (2) consumer protection, (3) the protection of culture and values, (4) economic vitality, and (5) the raising of revenues – regardless of industry or technology.

The rudiments of such an organization already exist; the Public Safety & Homeland Security Bureau is responsible for public safety across industries. Other bureaus would have to be split up among domain-oriented departments. The responsibilities of the departments replacing existing bureaus would include:

1. Public Safety: Access to emergency services, law enforcement surveillance, data retention, and child safety


2. Consumer Protection: Privacy, fraud, fair trade terms, access for those with disabilities, device certification, universal service, digital inclusion


3. Culture & Values: Control of speech (obscenity, violence in media), advertising rules


4. Markets: Economic vitality, anti-trust, allocation of resources (numbers, spectrum), market analysis


5. Revenue: Taxes, fees, levies, subsidies

No reorganization is perfect, or without cost or risk. However, there are many benefits of this re-arrangement:

• An alignment with policy mandates will be more stable over time than one based on technology or industry segmentation, which is in constant flux.


• An organization structures by public interest mandate would require and enable the Commission to take a big picture approach in every case, and not limit staff to supervising or nurturing a particular, soon-to-be-obsolete industry category.


• It would weaken the ability of incumbents to dominate all rule makings applicable to them by focusing on a single bureau.


• A department focused on market issues would highlight the complements, overlaps and conflicts between the FCC and FTC in the anti-trust area.


• The inclusion of spectrum allocation issues within a department charged with maximizing the economic value of national resources would call the question of the divided FCC/NTIA management of spectrum in the US, and may provide a path to the long-term resolution of this inefficient anomaly.

Enhancing capabilities like contingency planning, data analysis, and simulation could also lead to restructuring the Offices that serve cross-organizational roles. For example, a modeling group might logically be housed in either the Office of Engineering & Technology (OET) or the Office of Strategic Planning & Policy Analysis (OSP). One can make a case that combining the two Offices would reinvigorate staff in both. Both are tasked with providing expert advice, but OET focuses on radio engineering, while OSP houses lawyers and economists. The necessary cross-disciplinary work will be easier to accomplish in a single organization, even though inter-disciplinary incomprehension may be an obstacle in the early days. An invigorated cross-Commission data collection and analysis operation would be housed in OSP (or its successor), rather than distributed across the industry-oriented bureaus.

Is now the right time?

One needs to ask not only how to reform, but whether.

Reform is a phase in the adaptive cycle: it is the reorganization that follows the crisis of a release phase. (See Reforming the FCC: Etiology for a summary of the adaptive cycle.) While release and restructuring is necessary for the long-term health of a system, it can be painful.

Reform necessarily dissipates the capital accumulated during growth and maturity; it is not something to be embarked on lightly. Is now the right time to reform the FCC?

The goal of wise management is to keep disruptions from flipping a system into an undesirable state, while encouraging the innovation and experimentation that comes with reorganization – not vainly trying to stop restructuring from happening at all. Delayed re-organization amplifies the eventual crisis, increasing the risk of landing up in an unhealthy state; too frequent or premature re-organization never allows the full accumulation of the potential that can fuel the next restructuring cycle.

An accumulation of governance problems is not sufficient to drive a paradigm shift, as Thomas Kuhn demonstrated in the context of scientific revolutions; there needs to be a better alternative. Do we have a better alternative? I don’t know, and complexity science suggests that there’s no way to know for sure. The only way to find out is to try it.

Are the risks acceptable? One of the prices to be paid is that tools that one needs to manage the system are disrupted during reform. For example, trust is an important ingredient of self-regulation, which will be important in the new approach – but trust requires stability, which is reduced during a reform. Fortunately, industry is in a relatively stable phase at the moment, which can accommodate and smooth over disruption at the Commission level. This gives the FCC an opportunity to change while not endangering the stability of the whole system

A new Communications Act might trigger reform, but that is neither necessary nor likely. Congress will be the last to change in the face of the complexification of communications. Members, particularly influential ones, are typically long standing office-holders with entrenched patrons and perspectives. They will resist the threat to their patronage entailed by a re-organization of regulatory action. When they do act to reform, it will probably be in response to an existential threat to a powerful old-line industry – which will tend to entrench, or at best resist attempts at blurring, existing ways of doing things.

Re-organization will therefore have to be driven by the Chairman, with all the risks (and opportunities) of a process that depends on a single big ego. The choice of a new Chairman will therefore have far-reaching consequences for the effectiveness of the organization.

Conclusions

There is no a priori limit to the number of true statements one can make about a complex, adaptive system, and many of them will be at odds with one another. The role of a regulator is therefore not to establish the ultimate truth as the basis of a correct decision, but rather a never-ending quest to make the best possible call given what can be known at a given moment.

This reality has become more visible and more pressing as the stable world of 20th century communications gives way to the flux of the 21st century internet/web. Even while understanding grows that the FCC’s influence is limited, there is no doubt that it still has great influence, and important responsibilities. The addition of new techniques to its repertoire and a corresponding restructuring of its organization will be essential to wielding its influence wisely, to the benefit of citizens.

The new approach proposed here is premised on dynamics that affect not only the FCC, but all actors in the communications system. These arguments, and all debates about how to reform the FCC, therefore also apply to the broader question of governance of 21st century communications.

Further reading

Weiser, Philip J, “FCC Reform and the Future of Telecommunications Policy” (forthcoming, to be presented at Reforming the Federal Communications Commission, 5 January 2009)