Regulatory Status of VoIP in the Post-Brand X World

During the past several years, the Federal Communications Commission has engaged in a series of rulemakings to determine the regulatory status of Voice over Internet Protocol (VoIP). The Supreme Court’s Brand X decision clarifies that even if the FCC’s determination conflicts with that of a court, the FCC’s judgment holds sway as long as the decision is reasonable. We believe that VoIP should be classified as an information service, rather than a telecommunications service, for several reasons. First, the Internet Protocol nature of VoIP technology means that it functions like an information service, rather than a telecommunications service. Second, in the Telecommunications Act of 1996, Congress clearly sought to bring competition to all communications markets; encouraging the development of VoIP by classifying it as an information service comports with congressional intent. Third, economic analysis demonstrates that subjecting VoIP to the full panoply of regulation under Title II of the Telecommunications Act would significantly reduce consumer welfare. Fourth, the FCC’s own experience shows that, if the FCC believes that some selective regulation is necessary, it has ample authority to impose targeted regulation without subjecting VoIP to all regulations that affect telecommunications services

Why and How Independent Agencies Should Conduct Regulatory Impact Analysis

Independent regulatory agencies face increasing pressure to conduct high-quality economic analysis of regulations, similar to the regulatory impact analysis conducted by executive branch agencies. Such analysis could be required by evolving judicial doctrines, regulatory reform statutes, or executive order. This article explains how regulatory impact analysis can contribute to smarter regulation, documents the current low quality of such analysis at many independent regulatory agencies, and offers a blueprint that independent agencies can use to build their capacity to conduct objective, high-quality analysis

Restoring Internet Freedom as an Example of How to Regulate

Thomas Lambert’s How to Regulate urges regulators to diagnose the extent and causes of the problems they seek to solve and consider the benefits and costs of alternative solutions. It also warns that government officials are affected by the incentives and knowledge constraints they face, and regulations should be designed to mitigate this problem. The Federal Communications Commission’s Restoring Internet Freedom order provides examples of these principles in practice. In its assessment of blocking, throttling, paid prioritization, and other general business conduct of broadband providers, the order first utilized economic research to identify the extent and causes of the underlying problems the FCC sought to solve, then selected alternative solutions tailored to address the problems. In deciding whether to classify broadband as a Title I information service or a Title II telecommunications service, the FCC took note of regulators’ incentives under Title II to extend regulation to include regulation of prices, unbundling requirements, and other types of regulation that the FCC had imposed on telecommunications carriers in the past. Reclassifying broadband under Title I reduced the risk of expanded regulation that would expropriate broadband firms’ sunk investments

The Future of Regulation

This paper discusses the prevalence of regulation in the U.S. It provides the necessary background information on the process for creating regulations, how scholars can measure the increase in regulation, and the different types of regulations. This paper then goes on to discuss the five major recent trends in regulation and the implications of these trends for the future

Buried Online: State Laws That Limit E-Commerce in Caskets

Consumers seeking to purchase caskets online could benefit from the Supreme Court’s 2005 decision that states cannot discriminate against interstate direct wine shipment. Federal courts have reached conflicting conclusions when asked whether state laws requiring casket sellers to be licensed funeral directors violate the U.S. Constitution’s Due Process Clause. In Powers v. Harris, the 10th Circuit even offered an unprecedented ruling that economic protectionism is a legitimate state interest that can justify otherwise unconstitutional policies. In Granholm v. Heald, however, the Supreme Court declared that discriminatory barriers to interstate wine shipment must be justified by a legitimate state interest, and states must present real evidence that the discrimination is necessary to accomplish their policy objectives. The Court conducted a fact-intensive analysis which concluded the states had failed to make a persuasive case in favor of discrimination against out-of-state wine sellers. Examining the economic evidence, we find that state laws which impede electronic commerce in caskets would almost certainly fail a Granholm-style factual analysis. This implies that such laws could be held unconstitutional under the Commerce Clause, if a plaintiff brought a challenge similar to the one in Granholm. Our analysis also suggests that the laws are vulnerable to an Equal Protection or Due Process challenge if courts consider whether evidence actually supports the state’s defense

David versus Godzilla: Bigger Stones

For four decades, U.S. Presidents have issued executive orders requiring agencies to conduct comprehensive regulatory impact analysis (RIA) for significant regulations to ensure that regulatory decisions solve social problems in a cost-beneficial manner. Yet experience demonstrates that agency RIAs often fail to live up to the standards enunciated in executive orders and Office of Management and Budget (OMB) guidance. The Office of Information and Regulatory Affairs (OIRA) oversees agency compliance with the executive orders, but OIRA is about half the size it was when it was established in 1980. Regulatory agency staff outnumber OIRA staff by a ratio of 3600 to 1. We suggest four managerial changes that could increase OIRA’s leverage: (1) Define what counts as success when an agency adopts a regulation and link this to the agency’s strategic goals, (2) Use budget recommendations to enforce analytical requirements and achievement of agencies’ Government Performance and Results Act (GPRA) objectives, (3) Combine regulatory budgets with agency budgets, and (4) Reward results, not activity

Talking the Talk, or Walking the Walk? Outcome-Based Regulation of Transnational Investment

Today, individual U.S. retail investors have virtually limitless opportunities to invest their money, with a notable exception: they cannot directly invest in securities of foreign issuers and still be protected under U.S. law. This missing opportunity deprives U.S. investors of the ability to fully diversify their investments and also imposes undue costs and risks upon investors seeking to invest directly overseas. This Article shows that a Securities and Exchange Commission ( SEC ) policy of mutual recognition of foreign regulatory regimes that achieve investor protection outcomes comparable to those of the SEC would solve this problem. A foreign issuer or other entity seeking to access U.S. capital markets should be permitted to substitute compliance with its home country\u27s investor protection regulations for compliance with U.S. regulation, as long as it agreed to submit to SEC antifraud jurisdiction in its dealings with U.S. investors. The foreign entity would thereby not have to comply with federal securities law to have access to individual U.S. investors, as is currently the case. Similarly, U.S. entities should be permitted to enter foreign markets without subjecting themselves to a second layer of regulation on top of what the SEC already requires. Under an outcome-based approach to transnational investment, U.S. companies could then opt for foreign regulation and sell securities to U.S. investors as foreign-regulated issuers, as could foreign entities with respect to their home regulator. Allowing firms to choose a regulator from the set of nations with comparable investor protections would intensify the regulatory competition already taking place around the globe, and help to ensure that such competition serves the interests of investors