You are here

Why Future Federal Communications Commission Oversight Hearings Should Explore Sunsetting the Agency

Op-Eds and Articles

There’s another Federal Communications Commission (FCC) oversight hearing underway in the Senate Commerce Committee, with most of the time being spent on doings with which the agency ought not be engaged at all.

Given the need to spur economic growth and to address crumbling critical infrastructure besides, congressional leaders should be mounting a large scale effort to liberalize all our great, overly regulated, and “silo-ed” infrastructure industries, of which communications is just one piece. How much richer our society could be if they could work together (transportation, electricity, pipeline, water and so on) rather than apart to optimize rights of way and invest in, expand and reinforce our greatest large-scale commercial assets.

Instead, legacy sandboxes are played in, and federal economic regulatory agencies like the FCC are being, not restrained by oversight, but given a platform to justify expanded power and new “programs” with little pushback from overseers–who seem not to see a big picture.

The Federal Communications Commission (FCC) was created 83 years ago, allegedly, because of the scarcity of airwaves and the need to protect the public interest.

Alas, natural monopoly never arose in the highly competitive early telecommunications era that included phone calls over barbed wire and competing networks. In classic regulatory capture, the federal government granted artificial monopoly power in telecommunications to powerful players that left consumers with one company for decades.

We might have had aesthetic problems with lots of wires, but never “natural monopoly.” That is the legacy of the Federal Communications Act. The same thing happened across network industries, which is why it’s against the law for you to run an extension cord across the street and “compete” with the power company. There exists a protected monopoly there, not a natural one. Likewise, I fear emergent ”yet-to-be” network industries like drone deliveries and autonomous vehicle proliferation will face extraordinay regulatory predation since governments already control the corridors (the roads and airways) when locational technologies should be preparing for the job.

Wireless communications (also delayed by FCC in that technology’s early years) and the Internet have broken even artificial monopoly power down, making a broadcaster and film-maker out of everyone, and lessening the need for the FCC to play much of a role in anything apart from ensuring spectrum gets properly allocated.

But this agency has ambitions. Its recent endeavors include imposing “net neutrality” (which Republicans for many years have failed to stop or to articulate a argument against its premises); imposing price controls in business broadband data services; excessive privacy and information-sharing regulations for broadband that at the outset were redundant with Federal Trade Commission efforts and private solutions; and cable set-top box regulation. The FCC has pursued cable à la carte requirements, media ownership restrictions, and regulations on indecency and video game violence portrayal. It likes to bring antitrust challenges, delighting in blocking needed infrastructure transactions. The agency even undertook a foray into journalism standards with a “Future of Media” proceeding and an outrageous, anti-First Amendment “Multi-Market Study of Critical Information Needs” asserting authority over newsroom fairness.

The agency is gigantic, and as an independent agency escapes even the limited regulatory review by the White House Office of Management and Budget that executive branch agency rules (sometimes) undergo. (See “The Federal Communications Commission Should Take a Selfie” on its hundreds of rules and billions in costs).

As the Federal Register balloons and agency regulations and guidance and other “regulatory dark matter” proliferate, the grabby mentalities of many federal agencies seeking to hold on to power are increasingly a problem. Barriers inside specific industries, and across industry sectors, need to be coming down fast. We get the opposite. This is “oversight”?

I and many others have called, in general regulatory liberalization campaigns, for such reforms as congressional approval of agency actions; for removing a rule for every new one implemented; for a bipartisan regulatory reduction commission; for sunsetting of rules; and for a regulatory budget, all of which should apply to FCC.

There’s no justification for man-made economic regulation of the sort FCC pursues, and the residual bits that may persist because of legacy disruption (not because of the free market, which the agency preempted 83 years ago) can be addressed by a general non-industry specific regulatory body like the Federal Trade Commission—or the states.

It has now been 11 years since a CEI collegue and I published Communications without Commissions: A National Plan for Reforming Telecom Regulation. The commission has only sought to grow since then. Here is the still-fresh reform agenda a new Congress and administration ought to pursue:

(1) Set regulatory boundaries

Preemption – Analyze which governmental authority—federal or state—is best suited for a regulatory role (if government regulation is required).

Prevention – Restrict the FCC’s jurisdiction by creating a “firewall” that would prevent it from regulating Internet Protocol-based services and new technologies.

(2) Revisit rationales for economic and social policy regulation

Eliminate Economic Regulation – Rules that regulate prices and access need to be phased out entirely.

Divest Social Policy – Social goals like universal service should be disentangled from industry-specific taxes, price controls, technological mandates and other economic regulations.

(3) Reform the Federal Communications Commission

Restructure – Eliminate FCC functions that could be performed by other agencies

Reform Spectrum – Provide the FCC with a clear mandate to get spectrum into the market

Tuning in to the Senate Commerce Committee FCC oversight hearing today, nothing comes close, with needed cross-industry reforms ignored in favor of forays into things like 911 coverage (that would not be an issue if FCC hadn’t stalled competition for so long), and universal service funding that could be handled without industry specific taxes.

There’s always next time, Commerce Committee.

Originally posted to Forbes