Baker Says Exempting Wireless Wouldn’t Eliminate Her Net Neutrality Qualms

FCC Commissioner Meredith Baker said she remains open-minded about net neutrality, but she questioned whether a compromise can be made to gain her support by removing the application of rules to wireless. Baker, who joined the commission in July, told us she’s pleased with the approach of the National Broadband Plan toward spectrum. Baker also called for a quick review of all deals before the FCC, including Comcast-NBC Universal, limiting conditions to those directly involved, and helping broadcasters in small- and mid-sized markets in the media ownership review.

There has been persistent speculation that Chairman Julius Genachowski would try to pick up Baker’s support for net neutrality rules by addressing her concerns about applying them to wireless. “I worry because I think networks are all becoming hybrids,” Baker told us in an interview Wednesday. “I think if you start siloing wireless as opposed to wireline, what do you do when you actually look at the way a network operates? … It sounds like an answer but I am actually not sure that technically it works.” She added, “How many networks are pure wireless networks? None."

Baker said she would make good on her promise to keep an open mind on net neutrality. “We all believe that we want to have an open Internet with the free flow of lawful information” and “none of us believe that there should be any anticompetitive behavior,” she said. “That’s a big step. When we started the network neutrality discussion, we didn’t even really know how to define network neutrality.”

Baker said she has worked hard to understand how networks work. “We have had more technical meetings on the ways that networks operate since I got here,” she said. “I have diagrams from all kinds of different companies” and FCC engineers. Baker said she has seen no evidence of a problem that requires regulation.

Baker said she has concerns about an order on Harbinger Capital Partners Funds’ acquisition of SkyTerra that allows leases of SkyTerra’s MSS spectrum but not to the two largest U.S. carriers without special permission from the FCC (CD March 30 p1). From a “holistic” view, the commission “allocated too little terrestrial spectrum and too much satellite spectrum,” she said. “How do you incentivize that to be more efficient and go toward the terrestrial spectrum. Incentive auctions are a great way to do that.” On the provisions that apply in effect to AT&T and Verizon Wireless, Baker said, “What’s troubling to me is I haven’t seen the record.” She added, “To impose some sort of restrictions on there without having a fulsome record I think is premature."

Baker said she has “a little bit of an issue taking Ancillary Terrestrial Component and making it terrestrial component on unauctioned spectrum."

"I realize what we're trying to do here with this is enable broadband to 260 million users across the United States, and we're basically taking spectrum that’s not being used and putting it to a more fulsome use,” Baker said. “But I think that those are big policy decision. I think a better way would be to just be honest about the fact that some of this satellite spectrum would be better repurposed as terrestrial spectrum."

Baker called the spectrum section of the National Broadband Plan a “good chapter” that works through national needs in an intelligent way. “I don’t know how much spectrum we're going to need, but it’s clear we're going to need more spectrum for the mobile broadband industry,” she said. “Is it 500 MHz that we need?” she asked. “I don’t know the answer. I think no matter how much spectrum there is, we're going to need more."

The FCC, with the NTIA, will need to do more than find additional spectrum for broadband, Baker said. “What I've been doing since I came here is really calling for a comprehensive plan so that we can look at the short term, the medium term and the long term. There’s no silver bullet. I think we have looked in the hat and there’s no rabbit in there. I think we need to take all roads to kind of be able to achieve the next generation of innovation that we want in this space."

Finding additional spectrum, making spectrum use more efficient and encouraging innovation, including greater use of secondary markets, must be parts of the approach, Baker said. “As far as efficiency, I really mean better receivers, smarter antennas, more femtocells, dynamic spectrum. How do we encourage these cognitive radios out therethat haven’t necessarily made it into the commercial market?"

Baker believes that some Defense Department and other government spectrum probably can be shifted to commercial use. “It’s not just DOD. It’s the entire federal spectrum users, whether it’s the Department of Energy or the Department of Interior, which uses spectrum to measure rivers, obviously, the Department of Transportation and the FAA."

Baker said she supports the plan’s proposal for an auction of the 700 MHz D-block. The plan has run into significant criticism from APCO and other public-safety groups. “I think it’s a really tough issue,” she said. “If there was only one right answer, we would have already solved that problem. I think that the important thing is to get these networks built out and to get this spectrum used and to have public-safety interoperability. … How much time are we going to wait for another natural or manmade disaster to come along to really make us get this public safety interoperable network?"

Baker said she regrets that public safety groups are opposing the proposal. “It would be nice if we could all jump on board and have unification on this,” she said. “We continue to try to please them and will continue to try to work with them and make sure their needs are met. … Obviously we want their needs to be met. We want public safety to have a unanimous voice as well, and that’s not exactly where we stand, either."

Baker seeks “merger-specific” conditions on all deals to come before the regulator, because “policy discussions” belong in “policy dockets,” she said. “Time in merger review is important, and I've really expressed that view to the chairman. We need to do our job within the time frames that they've given. Untimely dragging this out doesn’t help anyone."

The FCC’s quadrennial media ownership review ought to keep in mind markets other than the largest ones affected by cross-ownership deregulation in the last review, because smaller areas are being hurt by the “economic crisis,” Baker said. “We really need to worry about the small- and mid-sized communities. We are in a hard economic time, so that makes some of these media ownership questions more important for the people who are participating in them.”

Baker had praise and criticism for FCC outreach efforts. She likes the “openness” of webcasts dealing with media ownership, the Future of Media Project and net neutrality. “To have participation from across the country, as opposed to just the FCBA Washington bar, I think is actually a really good thing for communications law,” she said. It’s “really useful and helpful in gathering different perspectives and data” and makes for a better record and final order.

But “I also don’t think that the FCC has jurisdiction over journalism, and I'm concerned about that outreach effort,” Baker said, adding praise for the head of the futures effort, Steve Waldman. Waldman said he couldn’t comment right away. “Journalism is, like many things, an industry in transition, and as we all struggle with what the digital transition means to jobs and the availability of information on the Internet,” Baker said. “I think we need to let these things shake out before we start actually trying to send a government bailout to them.”

This FCC has a sense of inevitability that USF and intercarrier compensation reform “actually might get done this time,” Baker said. It may not be easier, but “I think there’s more of a sense that we really need to do this,” she said. The issue during the period that hatched the Missoula Plan compromise wasn’t as ripe as it is now, she said. “I actually have real optimism that we're going to move forward on real reform here, but the fact that it’s a phased reform over a period of time is making a lot of mid-size and rural carriers more comfortable than they have been before."

Baker identified the Lifeline and Link-up programs as the easier issues to tackle in beginning the 10-year repurposing of USF and intercarrier compensation. Hopefully the FCC “will pick some of the low-hanging fruits that have broad agreement and [then] work on some of those that are going to have a little more thorny issues that have really thwarted us for over a decade,” during the next two years. With 95 percent of U.S. homes wired for broadband, deployment has been successful, she said. “What we really have is an adoption problem.” The low-income programs are good programs, but the “rural health program has been one I think we'd all like to see be more fulsome."

As an advocate for economic regulatory incentives, Baker agrees with the broadband plan’s proposed research and development tax credits, but said there’s more that can be done. Economic incentives “for companies and for individuals is probably one of the most important parts” of the broadband roll-out. “It’s not necessarily always the price point of the broadband itself, sometimes it’s the hardware,” she said. The broadband plan’s suggestions for Congress to enact “dig once” incentives for pole attachments and rights-of-way also “go into the formulation of how to quickly and more comprehensively and cheaply roll out broadband,” she said.