The companies that own the old copper telephone networks are chomping at the bit to transition to Internet Protocol so they can carry not only voice service but also data, video, etc. For example, AT&T’s new 45 Mpbs U-Verse service is nine times faster than Netflix’s recommended HD streaming rate.
Why hasn’t the FCC already commenced a comprehensive proceeding to [address consumer protection concerns] and move forward on the IP-transition before it is too late? … I’ve previously wondered whether the FCC is stalling to preserve its jurisdiction, practicing the fine art of avoiding a disruptive truth, attempting to protect particular competitors, or some combination of all of the above. My greatest fear, however, is that the FCC’s inaction on the IP-transition is part of an emerging pattern of practice at the agency in which it uses its regulatory leverage to extract concessions through non-public negotiations from private companies who are seeking regulatory relief…. For such tactics to be maximally effective, however, the FCC must wait as long as possible to take meaningful action. Perhaps the FCC believes a particularly lengthy delay in the IP-transition is necessary to soften up the ILECs before the FCC makes an offer they can’t refuse?
He’s right to be worried. The FCC has a long track record of using any opportunity it can find to extort concessions from companies outside the normal regulatory process – and thus outside the supervision of the courts. The “agency threats” model is standard operating procedure when it comes to transaction review. It’s a variant on the “You never want a serious crisis go to waste” mentality. As Rahm Emanuel said, “it’s an opportunity to do things you could not do before”: