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.”

Public Knowledge said that there needs to be "aggressive antitrust enforcement" of digital markets dominated by companies like Google, Facebook and Amazon, but that more is needed. 

In testimony for a hearing in the Senate Antitrust Subcommittee on "Competition in Digital Technology Markets: Examining Self-Preferencing by Digital Platforms," Public Knowledge senior advisor Gene Kimmelman said that there is a need for new, pro-competitive regulations, and a separate regulatory agency. 

"By establishing an Agency designed to promote market entry and expansion, Congress could expand competition that will spur innovation and benefit consumers, "Kimmelman said in prepared testimony. 

Kimmelman pointed out that the UK's Competition and Markets Authority interim reports on digital ad markets found that Google has significant market power in search and advertising--no big news there--and that Facebook has similar power over social networking. Again, not a surprise. But Kimmelman said it should "set off alarm bells that we need to assess what antitrust can do, how it needs to change, and which other policy tools are needed to generate robust competition in our exploding digital marketplace."

The Department of Justice and Federal Trade Commission are both investigating the digital marketplace with an eye toward whether antitrust enforcement has gaps when it comes to how edge providers become powerhouses in their relevant markets. 

Online content pioneer Mark Cuban told the Senate Antitrust Subcommittee Wednesday (Dec. 7) that the AT&T-Time Warner merger is pro-consumer and will be necessary for the companies going forward to be competitive with the dominant content providers, Web content giants Amazon, Apple, Microsoft, Google and Facebook.

In his testimony at the hearing about the deal, Cuban said that while radio and TV used to be the big competition for online streaming services, now its app-driven websites and services like Snapchat, He said Facebook is in the dominant content delivery position, saying it was taking over millennials and had become the major alternative to boredom, which used to be the province of TV and radio.

Related: Stephenson: AT&T-TW Would Be Disruptive Cable Competitor

Public Knowledge president Gene Kimmelman countered that all those Web giants weren't charging $200 per month for those apps and that user-generated online content was not comparable to the expensively produced content from a Time Warner.

He also said those businesses are all dependent on the ISP gatekeepers, including AT&T.