The Federal Communications Commission Should Take A Selfie

There are either dozens of federal agencies or hundreds, depending, seemingly, upon the day of the week or whom one asks.

The Federal Communications Commission (FCC ) is not the top dog among regulatory bureaucracies by the number of rules issued–but it’s a contender going by influence.

The FCC merits far closer scrutiny from Congress than it gets, because it wields extraordinary authority over major economic growth engines in today’s economy: telecommunications, the Internet and the information economy generally. By extension, it’s likely to try to wedge itself into influencing such domains as autonomous vehicle communications on land and air, even though Congress hasn’t a passed law giving it such power over emerging frontier sectors.

The FCC is an expensive agency. It spent an estimated $464 million on regulatory development and enforcement during FY 2015. Even more significant is that it likely accounts for more than $100 billion in annual regulatory compliance and economic impact.

The chart nearby shows the FCC’s numbers of final rules in the Federal Register during the past decade, compiled from the National Archives. According to the National Archives’ online database, the FCC’s final rules in the Federal Register numbered as high as 313 back in 2002, then declined steadily during the decade to lows of 109 in 2012 and 90 in 2015 (see hindmost bars in the chart). There had been a bump upward of 32 percent between 2012 and 2014 (from 109 to 144). As of today (August 23) the FCC has finalized 63 rules in the 2016 Federal Register.

The chart also shows FCC’s overall number of rules in the fall 2015 “Unified Agenda” pipeline, as well as its Agenda rules with small-business impacts. (The Unified Agenda is the twice-annual document whereby agency’s present their regulatory priorities, and rules at proposed, final, and recently completed stages. The fall 2015 Agenda contained 3,297 total rules.)

The FCC’s lists 133 rules in the Unified Agenda pipeline. While FCC is surpassed by eight other departments or agencies in this category (see Table 5 in this report), among the so-called “independent agencies,” such as the Securities and Exchange Commission and the Consumer Product Safety Commission, the FCC is the leader.

The 2015 Agenda indicated that 674 rules affect small businesses. The FCC accounted for 99 of these (also shown in the chart). In fact, five bodies—the departments of Commerce, the Federal Communications Commission, Health and Human Services, Transportation and Agriculture—account for 402, or 60 percent, of the rules affecting small business.

Although the FCC has published fewer rules in the Agenda and has finalized fewer than in preceding years, a doggedly pro-regulatory mindset prevails at the commission, most recently seen in the push to inflict utility regulation upon broadband in alleged pursuit of so-called net neutrality. An agency’s rule count is not all that matters, because a handful of rules, such as net neutrality mandates, can have an outsized impact. And with housecleaning rare to non-existent, rules are cumulative.

Today’s vibrant, robust communications, content and app markets are not fragile flowers requiring fine-tuning by government bodies. Communications markets do not exhibit abuses and market failures calling for top-down rulemaking with respect to each and every technological advance. Yet the FCC forges ahead to expand its domain in disregard of the outdated character of its original mandate to police public airwaves characterized by scarcity. Such conditions no longer apply to today’s world in which everyone is a potential broadcaster.

Despite having been rebuffed in federal court following early attempts to impose net neutrality, and despite the concerns of many in a Congress which never delegated such authority to the commission, FCC persisted and won. A January 2014 federal court decision struck down part of the FCC’s open Internet order, but exposed the Internet to even wider FCC regulation—and the commission has responded by altering and expanding its rule, and has now been affirmed in court.

Over recent years, the FCC has also inserted itself into other matters including cable set-top box regulation, privacy and information-sharing requirements for broadband, multicast must-carry regulation, cable à la carte requirements, media ownership restrictions, indecency, video game violence portrayal, and wireless net neutrality. The agency even attempted a controversial foray into journalism standards with a “Future of Media” proceeding.

Of the 3,297 rules in the Unifed Agenda pipeline, 218 are said by agencies to be “economically significant,” meaning they have impacts of $100 million annually. Eight of these belong to the FCC (and are listed at bottom).

Such rulemakings, along with the dozens of other FCC rules in the Agenda pipeline and made final each year, present opportunities for either liberalization of telecommunications (see Communications Without Commissions), or avenues for new central regulatory oversight and protracted legal battles.

The commission, flattering itself, has chosen the latter, seeking only to expand. So far, Congress will not stop or de-fund it, and frankly has no vocabulary for doing so even if it wanted. While the FCC should re-examine itself and the regulatory mindset, there is simply no chance of that happening internally. A future more articulate Congress will have to step in if the agency’s adventurism is ever to be ratcheted down. Apart from allocating spectrum to the competitive marketplace, the FCC’s few legitimate remaining powers could be transferred to a general regulator like the Federal Trade Commission and to the competitive market process itself.

Eight Economically Significant Rules in the Pipeline at the FCC

  • Broadband over power line systems; ET Docket No. 04-37, RIN 3060-AI24: “To promote the development of BPL systems by removing regulatory uncertainties for BPL operators and equipment manufacturers while ensuring that licensed radio services are protected from harmful interference.”
  • Broadband for passengers aboard aircraft: Expanding Broadband and Innovation through Air-Ground Mobile Broadband Secondary Service for Passengers Aboard Aircraft in the 14.0–14.5 GHz Band; GN Docket No. 13-114, RIN 3060-AK02
  • Service Rules for the 698-746, 747-762, and 777-792 MHz Band Ranges; RIN 3060-AJ35: “[O]ne of several docketed proceedings involved in the establishment of rules governing wireless licenses in the 698-806 MHz Band (the 700 MHz Band). This spectrum is being vacated by television broadcasters in TV Channels 52- It is being made available for wireless services, including public safety and commercial services, as a result of the digital television (DTV) transition. This docket has to do with service rules for the commercial services and is known as the 700 MHz Commercial Services proceeding.”
  • Universal Service Reform Mobility Fund; WT Docket No. 10-208, RIN 3060-AJ58.
  • Expanding the Economic and Innovation Opportunities of Spectrum Through Incentive Auctions; Docket No. 12-268, 3060-AJ82.
  • Rules regarding Internet Protocol-Enabled Services; RIN 3060-AI48: “The notice seeks comment on ways in which the Commission might categorize IP-enabled services for purposes of evaluating the need for applying any particular regulatory requirements. It poses questions regarding the proper allocation of jurisdiction over each category of IP-enabled service. The notice then requests comment on whether the services composing each category constitute ‘telecommunications services’ or ‘information services’ under the definitions set forth in the Act. Finally, noting the Commission’s statutory forbearance authority and title I ancillary jurisdiction, the notice describes a number of central regulatory requirements (including, for example, those relating to access charges, universal service, E911, and disability accessibility), and asks which, if any, should apply to each category of IP-enabled services.”
  • Implementation of Section 224 of the Act: A National Broadband Plan for Our Future; WC Docket No. 07-245, GN Docket No. 09-51, RIN 3060-AJ64.
  • Net neutrality “Open Internet” order; Protecting and Promoting the Open Internet; WC Docket No. 14-28, 3060-AK21

Originally posted to Forbes