Higher Standards Regulation in the Network Age
Werbach, Kevin, Harvard Journal of Law & Technology
TABLE OF CONTENTS I. INTRODUCTION II. CHALLENGES OF NETWORK REGULATION A. The Network Age B. Two Stories About Regulating Complex Networks C. Limits of Current Approaches III. STANDARDS AS REGULATORS A. Functions of Standards B. Government and the Standards Process C. Carterfone and Part 68 IV. THE AGENCY AS STANDARDS CATALYST A. Standards Facilitation B. Case Study 1: Network Management C. Case Study 2: White Spaces V. CONCLUSION
Standardization is regulation. As digital networks proliferate, standardized interfaces will define the economic and normative dynamics of markets. open standards, which are created through participatory processes and available to anyone who chooses to use them, are becoming increasingly important. (1) These developments have very significant implications for administrative law. Any model of networked markets that ignores the influence of standards will be incomplete. Legal scholars have begun to examine the relationship between standards and regulation, but only in scenarios where government either defers to or subsumes private efforts. (2) In so doing, they miss the opportunity to use standards as a regulatory tool.
Standards can define the substantive relationships among competitors and partners and even shape the structure of industries. (3) Theorists of regulation recognize that technical standards can serve a regulatory function. (4) Compliance with a standard, even if not enforced with the threat of governmental sanction, is a restraint on private economic activity. standards therefore exert the same kind of pull on unfettered private action as do competitive forces, which may also lead companies to act in a desirable manner from the standpoint of public policy. standardization is a process of cooperation rather than competition. (5)
Regulators should see themselves as participants in the standards marketplace. Administrative agencies should evolve to emulate the best aspects of the private standards-setting process, where adoption is the most valuable currency. By leveraging the power of open standards, regulators can become more responsive and efficient, while promoting important public interest goals of accessibility, investment, and innovation. (6) In particular, administrative agencies can certify standards as safe harbors, avoiding the problems of both command-and-control regulation and private negotiations. (7)
Two current proceedings at the Federal Communications Commission ("FCC") illustrate the value of a standards-based approach. The first concerns the network management practices of broadband access providers; the second involves unlicensed wireless devices that operate on frequencies adjacent to those used by broadcast television. (8) In each case, the FCC has chosen to adopt rules rather than facilitate standards. Instead of viewing standardization as peripheral to its core mission, the FCC should catalyze adoption of open standards that promote its regulatory objectives.
In leveraging standards to achieve its regulatory goals, the FCC would be in line with a broad trend in administrative law. Agencies increasingly rely on privately developed standards. (9) From accounting to workplace safety, industry standards now define substantive obligations that regulators enforce. (10) While usually seen as a form of deregulation or devolution, regulation by standardization can be an effective means for the FCC to implement a positive agenda. The critical elements for the FCC to consider are the procedural context in which standards are developed and the openness of the standards themselves. (11) By certifying open coordination standards, the FCC would give market participants flexibility to implement the best solutions, while promoting competition and open networks.
This Article explains why standardization can address fundamental regulatory tensions in complex network industries and describes how an administrative agency, such as the FCC, can incorporate standardization into its policymaking. …