Out of Control Policy Blog

Should we just scrap the FCC?

While Today's Wall Street Journal endorsement of Sen. Jim DeMint's (R-S.C.) Digital Age Communications Act (DACA) is getting buzz around the blogs, in keeping up the spirit of pressing for a ground-up overhaul of our nation's telecom laws, let's not let slip a piece that appeared Saturday in the Washington Times by Clyde Wayne Crews, Vice President for Policy and Director of Technology Studies at the Competitive Enterprise Institute.

Crews suggests that, as with the Civil Aeronautics Board and the Interstate Commerce Commission in years past, changing market conditions have ended the need for the Federal Communications Commission.

In "Sunset the FCC," Crews writes,

Public interest and airwave scarcity rationalizations have long justified telecom regulation. But in today's world, a large government bureaucracy inhibits new infrastructure development, options and freedom of speech. A study by economist Jerry Ellig finds government telecommunications regulation has cost consumers up to $105 billion annually in higher prices and foregone services.

Yet a pro-regulatory discussion dominates Washington. Every special interest wants something. Application and content companies like Google want net neutrality legislation forcing network providers to provide free access. The movie and recording industries want the FCC to institute a broadcast flag to guard against piracy. There are groups wanting the FCC to regulate content according to indecency standards, limit the size of media companies, and the list goes on.

Indeed, the telecom sector remains one of the most heavily regulated and taxed segments of the U.S. economy. That's why the most pressing business is to reform regulation by striking at the heart of the administrative burden. Instead of creating justifications for new laws that will out of date in a few years, if not months, reform needs a sunset agenda, a phaseout of the FCC.

Regulation of the communications industry wouldn't disappear without the FCC, but it would be more decentralized. States would continue to enforce consumer protection and rights of way laws; and federal antitrust rules remain. The Federal Trade Commission already has the authority to strike down the kind of vertical restraints of trade that some ear would occur without net neutrality legislation.

Provocative, to be sure. But the rapid pace of change may call for radical solutions. Likewise, in its lead editorial on DACA, the Journal says the bill's main strength is that it sweeps away the outmoded regulations for "information services," "telecom services," "landline," and "cable" that other bills are unsuccessfully trying to shoehorn into the new environment. For more about DACA, see Tuesday's entry in the Progress & Freedom Foundation blog.

Meanwhile, Crews is dead-on in his observation that the FCC is has become the lobbying focal point for every industry segment that wants a regulatory break. As a result, we're seeing a pattern of policy grown out of ad hoc compromise, not guided by principle.


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