By Kevin Werbach
In this article, Prof. Werbach argues that the FCC and other regulators should rely on and facilitate industry-developed open standards to shape competition and structure network-based marketplaces, rather than craft their own regulations.
Werbach draws on scholarship emphasizing the complexity of network industries, including Manuel Castell’s “The Rise of the Network Society.” He uses this scholarship to argue that traditional regulation and deregulation methodologies are insufficient for the modern “network age.” Although Werbach promotes analyzing telecommunications and internet industries with network science tools, he is critical of Daniel Spulber and Christopher Yoo’s recent attempt to do so in “Networks in Telecommunications: Economics and Law.” Werbach states that Spulber’s and Yoo’s attempt is “exceedingly flat.” Werbach agrees with “cyberlaw” scholars who promote using privately developed technical standards as the optimal regulators of network structure and activity, including Lawrence Lessig and Julie Cohen. However, Werbach is critical of the failure of such scholarship for its narrow view of how such standards are developed and applied.
Werbach argues that the FCC should endorse and police technical standards rather than develop and enforce its own regulations. He undergirds this argument with an examination of the economics of standardization and an analysis of how standards develop and structure marketplaces. He applies his reasoning to two case studies – first the FCC’s Comcast P2P order, and second the FCC’s recent consideration of “white spaces” for wireless spectrum allocation. Werbach also suggests a number of reforms at the FCC, including expanding its technical expertise.