Regulatory Restraint: The Road Less (and Better) Traveled

Regulatory Restraint: The Road Less (and Better) Traveled


In a year in which Kanye West simultaneously announced his presidential bid for 2020 and retroactively endorsed Donald Trump after admitting that he, himself, didn’t actually vote in the presidential election, 2016 has seen American politics and policymaking turned on their proverbial heads. With no shortage of drama to close out the year, the California Public Utility Commission (“CPUC”) will vote on Thursday to accept or reject a 152-page proposed decision put forth by outgoing Commissioner Catherine Sandoval that would subject telecommunications providers to unnecessary oversight and investigations.

Stakeholders familiar with this proceeding have expressed concern that it is overboard and expands the scope of previous inquiries that CPUC has been making into the telecommunications industry. Likewise, there’s further concern that this kind of decision fails to take into account the vibrant and competitive marketplace that Californians currently enjoy. Some are even worried that if the Commission approves this proposed decision that it could, in fact, jeopardize continued investment and innovation in the space at the same time that it requires regular consumers to foot the bill for additional regulatory proceedings.

Earlier this year, given the rapid pace at which the technology and telecommunications sectors are evolving and innovating, the Commission’s own President Michael Picker told legislators in Sacramento that he questioned whether the Commission should be involved in regulating the telecommunications industry any longer. Since making his statement, precious little has happened that would support President Picker, or any of the other Commissioners, to believe more proscriptive rules on this industry would benefit consumers.

Now, it would certainly be a mistake to read President Picker’s remarks or the recent election of Donald Trump as America’s next Commander in Chief as a referendum against regulation.   It bears noting, however, that there may be better suited and more consumer-friendly ways to address the perceived harms Commissioner Sandoval ostensibly hopes to remedy as she prepares to depart the Commission.

The recent stance taken by the Federal Communications Commission – the nation’s foremost authority on telecommunications regulation – may be instructive on this point. Acknowledging the massive seat change about to take place at the federal level, the FCC has chosen to cautiously abstain from passing judgment on several “controversial” regulatory proposals, which, if voted on today, could result in harrowing litigation and potential reversals of Commission precedent under the Trump Administration. There’s value to this tact that the CPUC should heed.

There appears to be growing consensus that the CPUC should not rush to judgment in adopting Commissioner Sandoval’s proposed decision. Not only would doing so unearth previously decided cases and cost tax payers money to revisit, but adopting antiquated rules meant for the era of rotary phones and a land before dial-up is not in line with the goals of a forward thinking, consumer-first, innovation agenda.

The Commission has an important decision on its hands, and this close to the New Year, Californians are likely wishing for a forward-looking outcome, rather than something that attempts to revisit and resurrect relics of the past.