Former FCC Chair Reed Hundt: Issues the next president faces in technology
October 31st, 2008
Daniel Eran Dilger
A presidential debate on technology policy organized by the New American Foundation turned into a simple interview after John McCain’s chief economic policy adviser (the man who called McCain the inventor of the BlackBerry), Douglas Holtz-Eakin, failed to show. Barack Obama’s representative, former FCC Chairman Reed Hundt, did attend and offered some perspective of what technology issues the next president will face.
The US has dropped from a worldwide position of being fifth in broadband to now being around twentieth. When asked by Wired moderator Nick Thompson how an Obama administration would act differently to restore America’s position in broadcast access, Hundt talked about “the most broad-based campaign in history,” an active community of three million created at low cost by Obama. “All campaigns will be like this in the future.”
Hundt talked about broadband technology availability as a social issue. He referred to ideas and decision making coming up from below, and said universal broadband is required for universal community, “the best way to see what they’re saying in real time.”
When asked about reclassifying broadband as a right, in the same way that universal telephone service was made available to everyone in the country with a high subsidy to rural users, Hunt noted that in the 1930s, universal telephone service was set up using a regulated monopoly. Long distance was priced high and helped pay for local service. The assumption at the time was that 90% of the people were calling people within 3 miles.
That assumption has changed. Today, using the Internet, people do not limit their conversations to their neighbors, but rather find community and information from all over the world. There is no analog to local and long distance service. That requires rethinking how to deploy broadband, and Hundt noted, “where there’s a will there’s an efficient way.”
Asked, “you think there wasn’t a will during the last eight years?,” Hundt answered, “absolutely not.”
He cited Michael Powell, son of former Secretary of State Colin Powell, who President Bush appointed chairman of the FCC in 2001. Powell ridiculed the Clinton administrations’ use of the phrase ‘digital divide’ to refer to limited broadband availability in the country by saying, “I think there is a Mercedes divide. I would like to have one, but I can’t afford one.”
Powell advocated a libertarian philosophy of deregulation of communications which resulted in media consolidation, but Powell’s tenure is probably best known for promoting the FCC as an indecency police force, famously fining CBS for the 2004 SuperBowl halftime “wardrobe malfunction” that exposed Americans to a brief flash of Janet Jackson’s breast, and throwing a series of fines at broadcasts that captured obscenities from Bono and Howard Stern. Powell also positioned the FCC as a copyright cop by promoting the problematic Broadcast Flag in TV hardware.
Hundt contrasted Powell’s view that “saying broadband is universal is like saying everyone should have a Mercedes,” with the view that “we think it is the way to have a community, Republicans and Democrats, that everyone is a part.”
Decisions on Information Privacy.
Asked if the federal government should set up regulations to cover information privacy, Hundt spoke of the value and risks involved with “extremely private files” such as health care records, which individuals need to keep secured, but want to have easy access to themselves, such as if they were seriously injured while traveling and needed to upload their medical records to emergency room workers.
Hundt said the current administration doesn’t “have an idea what the goal is,” but that the problems are not difficult. He said the current administration “perceived all problems as nearly insurmountable and every big problem as unsolvable.”
However, as Hundt noted, complex technical problems “don’t have to be decided at the top. They can come up through the same process that Barack built his campaign.” He also noted that they “shouldn’t be decided by one person in the new administration.”
Hundt essentially expressed the idea that complex technology solutions shouldn’t be handed down from government but rather be compiled by a consensus of informed contributors who come from various fields in the same model as open software or an Internet Engineering Task Force.
The event moderator noted that information is getting more accessible and more open, citing San Francisco’s BART transit system, which presented an open API to its transit info that third parties can interface. Why can’t the same be done with the Department of Education, SEC, and with other government agencies?
Hundt noted that would be an issue addressed by Obama’s plan to set up a new chief technology officer. Right now, he said, “you can’t get good information about broadband from the FCC.” Hundt then incredulously asked, “The best information about broadband in the US comes from the OECD?” The Organisation for Economic Co-operation and Development is based in Paris, France.
To make government information more available, Hundt said, “first, gather the information that would be useful for everyone to know. Second, it doesn’t need filtering. It needs to be able to be mined by anyone. That information is a public good,” citing the observation “information wants to be free.” We “affirmatively want to increase consumer welfare by sharing,” Hundt said.
“Take any regulatory agency. the first question is: at what point are the authorities who are accountable for the mission, at what point should they be launching their ideas for the public? In general, the answer is a lot earlier than you’ve seen in this administration,” Hundt said.
“In fact, in this administration, everything that I know about has been an idea that was virtually encoded with a purpose that was obscure and a method that was sneaky. We need to have all of this be above board, because we need to actually trust in the processes of collaboration that produces really terrific results.”
Later in answering audience questions, Hundt pointed out a specific example, noting that Bush’s Bailout plan was originally “cooked up in secret,” but after being exposed to the Internet within just 24 hours, fifteen better ideas, including “really thoughtful input” from universities and economists were presented and “a good half of those ideas” made their way into the revised plan. “And it was so rapid,” Hunt noted.
Another issue of disagreement has been net neutrality. Obama has supported the idea, which says Internet service providers shouldn’t meddle with content. McCain has gone on record of saying that whoever owns the pipe should be able to restrict content, such as preferring traffic to their own partners or blocking sites that don’t pay them fees to be ‘carried’ in the model of cable TV.
Hundt noted that “somebody has to pay for these networks. It ought to be run on a for-profit basis. We’re not about to nationalize broadband networks, not like the Bush administration, which has nationalized insurance, housing and .” He advocated a competitive market between providers and between wired and wireless technologies. It requires “waves of technological innovation,” something the market can best provide. For example, Hundt estimated it would coast “$15 billion to move cable to next stage of broadband.”
One problem is that “nobody’s investing now. Debt markets are freezing.” Hundt said we “need micro-economies that are thriving,” adding technology to the clean energy jobs Obama has talked a lot about already. He also said we “need a mandate on net neutrality, not legislation,” and added that “if the money isn’t flowing nothing is happening.”
Also on the subject of jobs, the moderator said Wired, the sponsor of the debates, had praised McCain for supporting more H1B visas. The moderator said “McCain says we need more, Obama has not.”
Hunt said Obama favors “a temporary increase that is part of a broader review of immigration,” and noted that “most people on H1B do not have an advanced degree.”
Radio White Space.
Another debate topic involves whether the “white space” between digital television channels should be licensed away, opened up to unlicensed use, or not used at all.
Hundt noted that “WiFi came from unlicensed sources,” and innovation “starts with not knowing the right thing to do.” Without citing Obama’s position on the issue, Hundt said Obama’s experimental attitude and modular approach means not expecting you know the answers ten years in advance.
The more spectrum a firm has, the lower costs they have Hundt noted. Unlicensed spectrum means lower prices with lots of competition, and gives each a lot of spectrum. “You don’t want one or two to be spectrum hoarders,” but rather a balance in spectrum ownership on both costs and competiton.
“The FCC established a rule on caps without engaging in any respectable antitrust analysis,” Hundt said.“Last time I looked they had lifted caps on the eve of transactions just enough to approve the transactions. What is this? You ought to be able to look down the road and have a plan that stretches at least four or five years. Get in there and make a plan that’s laid out in public, that stretches down the road four or five, six, seven years so that people in business can plan around it.”
Say and do.
Given that McCain’s representative didn’t show up to the debate, the moderator asked Hundt to point out what he thought were the good and bad parts of McCain’s stated policy. The problem, Hundt said, was that much of what was was expressed wasn’t real.
“He wrote in there that John McCain has fought special interests in Washington to force the federal government to auction inefficiently used wireless spectrum,” Hundt explained. “You know, that’s not what John did. John introduced a bill to ban the C&D auction entirely and give the spectrum to a friend of his. That’s what he did. It’s not that I don’t like him personally, but he didn’t do these things” claimed by his campaign.
Citing another example, Hundt said, “He said he wanted to wire every school and library in America. That’s a good thing, but it’s not what he supported. He voted against it.”
Hundt also explained a problem with dealing with China’s “self reliance” policy, which Hundt said translates to simply “we don’t pay royalties.” In other words, China frequently takes American technology and just clones it. He said America would be a net exporter if our software were being sold to Asia rather than just electronics being imported,“ but that ”we have not pursued it.“
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