In what could be a preview of Biden administration technology policy, three former Democratic policymakers are recommending the creation of a new independent federal regulatory agency - the Digital Platform Agency (DPA) - to oversee Big Tech’s expanding presence in American business and life. The agency would focus on promoting interoperability and “responsible data practices,” according to the “New Digital Realities” proposal by Tom Wheeler, Philip Verveer and Gene Kimmelman, published last week by the Harvard Kennedy School’s Shorenstein Center think tank.
Although the 62-page paper makes scant reference to “communications” or “media, its implicit message – especially coming from three men who spent most of their careers around the telecom industry – carries strong signals about the impact that Silicon Valley’s new technology giants have on telecom. They cite “the enormous power of data control in the hands of a limited few tech platforms” and focus on the limited competitive landscape that is evolving. Their report envisions DPA as a “federal agency agile enough to handle the oversight of data abuses and gaps in competition policy, while being capable of establishing corporate duties that promote fair market practices.”
Acknowledging concern about creating a new federal regulatory regimen, the authors explain that “digital technology has become critical to address many of the challenges our nation faces.” The report contends that a new agency is needed, rather than just “bolt on authority to an existing agency” because old agencies are saddled with “cultural commitments” and “legacy precedents.”
DPA would be built upon a “new congressionally established digital policy” that would avoid rigid utility-style regulation.” It would supersede the “existing regulatory agencies [that] … bring with them decades of operational and jurisprudential precedent that inhibits the ability to address the dynamics of the new digital marketplace.” The authors contend that an “agile approach to oversight built on risk management rather than micromanagement” would lead to an “enforceable code of conduct for specific digital activities.”
To validate the need for a new oversight agency, the authors charge that the “dominant digital companies” have made their “own rules and imposed them on consumers and the market.”
“Internet capitalism" should be grounded in "public interest expectations,” they argue, suggesting that DPA would be able to sue companies – similar to the role performed by the Consumer Financial Protection Bureau.
'Not a Replay of Industrial Era'
The “New Digital Realities” report is laden with tech-centric examples, such as how Artificial Intelligence could blow away traditional industrial and operating models, which filter throughout the economy.
“American policymakers’ reluctance to impose regulatory oversight has, in large part, been the result of the digital companies’ successful campaign to portray government regulation as stifling their ‘permissionless innovation’ and the wondrous products that have resulted,” the report contends. “At the federal level there has been no meaningful legislation addressing new technology since the Telecommunications Act of 1996, which principally dealt with networks, not platforms. Regulators are stuck with statutes that not only are from a pre-platform era but also are based on industrial era assumptions rather than policies that reflect internet era realities.”Wheeler, Verveer and Kimmelman insist that, “It is time to assert that there must be governmental oversight of the digital platforms. It is no longer acceptable for the companies to make their own rules.”
And they emphasize that public oversight of digital platforms “cannot simply be a replay of what worked in the industrial era.”
The report laments that, “For the last two decades digital companies have successfully sold the notion that government oversight of their activity would stymie innovation. The success of this lobbying has allowed the companies to maximize benefits to investors through the denigration of personal privacy, consumer rights, and the supposedly all-American concept of competition and competitive markets.”
“The failure to protect the public interest in such matters has added to the destruction of the public’s trust in government as Americans observe the inability of their representatives to do anything about obvious harms,” the report concludes.
It accuses the dominant digital platforms of becoming “governments unto themselves with the ability to impose their own set of rules on economic activities and consumer choices.” It also laments “the Silicon Valley mantra ‘move fast and break things.’” That approach has “failed to take into consideration the consequences of such actions.”
No Sense Yet of Where Proposal Goes
Despite the blue-ribbon Democratic credentials of the authors, there is no buzz yet on how or if it will play in Washington’s turbulent, unknown 2021 landscape. As such, it is a passionate, fact-laden trial balloon with high powered professionals pulling its strings.
Wheeler was the former FCC Chairman and an advisor for the Obama Presidential transition; earlier in his career he served as CTIA and NCTA president and a venture capital executive.
Verveer was Deputy Assistant Secretary of State for International Communications and Information Policy in the Obama administration; earlier he served as Chief of the FCC’s Cable TV, Broadcast and Common Carrier Bureaus and prior to that was the first lead counsel in the Justice Department team that led to the Bell System break-up; he also worked at the FTC and in private practice.
Kimmelman, currently a Senior Advisor at Public Knowledge, an activist policy group, had been president/CEO of Public Knowledge and prior to that was Legislative Director for the Consumer Federation of America. He also served as chief counsel for the Justice Department’s Antitrust Division and as Chief Counsel and Staff Director for the Antitrust Subcommittee of the Senate Judiciary Committee.
They acknowledge that the “dominant digital platforms have and will continue to oppose the imposition of competition in the digital market.”
Their report characterizes such stances as “opposition to the creative dynamism that produces economic growth and good jobs.”
“The dominant companies that grew out of dorm rooms and garages today choke off the ability of new innovators to do the same thing.”
The report contends that a new agency is needed, rather than just “bolt on authority to an existing agency” because old agencies are saddled with “cultural commitments” and “legacy precedents.”
“The DPA should have a ‘digital DNA,’” they insist, rather than the “analog DNA” that pervades existing regulatory units. This would require commissioners and staff “with specialized technological experience and capabilities.” It cites the early days of the FCC, the Nuclear Regulatory Commission and the Commodity and Futures Trading Commission as historical precedents of agencies built with special skills and talents. The report envisions hiring computer scientists and appointing commissioners with demonstrated expertise in the management of the digital environment.
They even go into details about the potential structure of DPA: it would be headed by three presidentially appointed, Senate-confirmed commissioners, one of whom will be Chairman. The Commissioners should have staggered five-year terms and no more than two commissioners may be members of the same political party.
“The prevailing practice of appointing former congressional staffers to commissioner posts should be avoided absent the appointee having digital experience beyond Congress,” the report argues.
“’Digital DNA’ also means that in establishing oversight of the internet platforms it is insufficient to repurpose statutory expectations established in the industrial era,” the report emphasizes. “Digital market activities require marketplace expectations built around digital technology and its capabilities.”
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Contributor Gary Arlen is known for his insights into the convergence of media, telecom, content and technology. Gary was founder/editor/publisher of Interactivity Report, TeleServices Report and other influential newsletters; he was the longtime “curmudgeon” columnist for Multichannel News as well as a regular contributor to AdMap, Washington Technology and Telecommunications Reports. He writes regularly about trends and media/marketing for the Consumer Technology Association's i3 magazine plus several blogs. Gary has taught media-focused courses on the adjunct faculties at George Mason University and American University and has guest-lectured at MIT, Harvard, UCLA, University of Southern California and Northwestern University and at countless media, marketing and technology industry events. As President of Arlen Communications LLC, he has provided analyses about the development of applications and services for entertainment, marketing and e-commerce.