Innovation

Regulatory Leadership, Investment, and the Marketplace: Helping America Succeed in a Pandemic

Regulatory or legislative moves by federal, state, or local governments that presume to know the direction of invention and innovation often lead to any number of unintended consequences. This is regulatory hubris typically resulting in great disruptions to innovation as the cost, whether in time, risk, or money, of investment in innovation rises. But where regulatory humility is pursued, such as with the current FCC, industry can step up in a big way when it is urgent as during the pandemic and keep America connected.

As the U.S. COVID-19 outbreak began FCC Chairman Pai asked broadband and telephone providers to take the Keep Americans Connected Pledge. Nearly 800 broadband and telephone providers moved to help hundreds of thousands of Americans during a time of need in a public private partnership grounded in leadership not threats or commands. The companies pledged to continue servicing any residential or small business customers regardless of their ability to pay their bills due to the disruptions caused by the coronavirus pandemic. Industry also waived late fees for any residential or small business customers caused by their economic circumstances related to the coronavirus pandemic and opened Wi-Fi hotspots to any American who needed them.

The Chairman encouraged all providers to expand and improve the low-income broadband programs they already had or to adopt programs if they did not have them. Finally, he asked them to relax data cap policies, waive long-distance and overage fees, work with schools and libraries on remote learning opportunities and prioritize the connectivity needs of hospitals and healthcare providers.

Some went even further.  For example, Comcast promised to keep Wi-Fi hotspots open through the end of 2020, months after the Pledge was to end. Verizon automatically enrolled Pledge customers into payment plans. Charter waived a portion of past due balances, and even raised the minimum wage for its workers to $20 an hour, investing in a workforce that can help keep people connected. Others did more as well.

Such efforts were critical to keeping America moving as best it could right when it was needed as government shut down vast swaths of the economy. According to OpenVault, broadband consumption increased by 47% in the 1st quarter of 2020, with more and more people staying at home to work, trying to connect with school, staying in touch with loved ones they could not visit, playing game or watching movies to ease the isolation.

Through it all, critics predicted that the system would buckle, that the peaks in use would crash the system. They were wrong. The system built with private investment increased broadband provision and the industry even took on more responsibility, and still it al functioned. This was made possible because of the decades of broadband industry investment in people and infrastructure. The industry is investing in the now and future as well. For example, CTIA which represents the U.S. wireless communications industry, reports that telecom companies built out a whopping 46,000 new cell sites last year, more than 13% growth in coverage, to make the transition to 5G networks.

These investments were made more likely because of the appropriate light touch approach the FCC has taken for the last few years. Turning away the heavy-handed tactics of years ago, the FCC established a predictable, settled regulatory environment that has made possible the rapid broadband expansion and that has led to customer satisfaction and benefits at a time when we needed it the most.

Long term private investment done under the rigors of the free market along with, when absolutely necessary, no more than light touch regulatory guidance produces success even in the toughest of times. This is the regulatory and legislative model that should be pursued throughout the states and by the federal government. Do not try to dictate the trajectory of invention and innovation which only leads to unintended consequences, rather harness innovation and apply leadership to help people when they need it most.


In Depth: Innovation

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