Perspective: How to reform the FCC

In his June 7 Perspectives column, "Why the FCC should die," Declan McCullagh argues "it's time to abolish the Federal Communications Commission." I share the deregulatory impulse that is father to McCullagh's idea.

But as a practical matter, it's unlikely that Congress will abolish the FCC.

I've got another idea. Trim the agency's size to match what should be a reduced mission in today's competitive communications environment and move it to the executive branch, where there will be more political accountability for its actions.

McCullagh gives some good examples of how the FCC, usually at the behest of established market participants, has stifled entry by new competitors using new technologies, such as cell phones. And there are more: Broadcasters used the FCC to handicap cable companies; the old AT&T used the agency to stymie new long-distance entrants; and international communications providers using old underseas cables employed the FCC to stifle new global satellite systems such as Intelsat. I could go on.

But the key point is this: Putting aside tiresome debates about whether all the FCC's various command-and-control regulatory mandates could be justified in the past, they no longer can be. The principal justification for such a burdensome array of regulations decades ago was the need to protect consumers from Ma Bell's then-monopoly and listeners and viewers from a few broadcasters' dominance of local media markets.

In August 1999, then-FCC Chairman William Kennard boldly proclaimed: "In five years, we expect U.S. communications markets to be characterized predominately by vigorous competition that will greatly reduce the need for direct regulation." He was right, of course. The notion of telephone and media monopolies is outdated today, what with wireless operators, landline companies, cable companies, radio and television broadcasters, satellite TV and radio providers, VoIP, the Internet, newspapers and magazines, and others, all competing.

Chairman Kennard went on to say: "Over the next five years, the FCC must wisely manage the transition from an industry regulator to a market facilitator. The FCC as we know it today will be very different in both structure and mission."

Well, it isn't. Since 1999, the agency's budget has grown by more than half again to almost $300 million per year, and it has even more employees--now numbering more than 2,000.

Since 1999, the agency's budget has grown by more than half again to almost $300 million per year, and it has even more employees--now numbering more than 2,000.

While Congress is unlikely to abolish the FCC outright, it may not be wishful thinking to suggest the time is ripe for enacting reforms that create, in Chairman Kennard's words, an agency "very different in structure and mission." With the emerging consensus that its "industry regulator" mission should be severely curtailed, it necessarily follows that the size of the FCC's budget and staff can be reduced accordingly. But structural changes of a much more fundamental nature should be considered as well.

First, contemplate moving the slimmed-down agency into the executive branch where it would be politically accountable to the president for its policy-making activities. In its current manifestation, the five-member commission is one of the so-called independent regulatory agencies, like the Federal Trade Commission and the Securities Exchange Commission, that are free from presidential control. These multimember agencies were created to implement a particular Progressive-era and New Deal idealized vision that, with a bipartisan cohort of "expert" commissioners, the agencies largely would be insulated from politics in carrying out their missions.

The theory never really matched the reality. In any event, over time, most observers agree that political predilections, rather than specialized expertise, play an ever larger role in the FCC's decisions. And the trade-off for independence is attenuated politically accountability. When the head of an executive agency like the Department of Commerce makes a decision, we know the president is ultimately responsible for the policy and can be held accountable at the next election. Not so with the FCC. If the agency is placed in the executive branch, there is no reason why any purely adjudicatory decisions, such as individual licensing matters, cannot be insulated from inappropriate political interference.

Second, so that it can reach decisions in a more timely and efficient manner, the new FCC's decision-making authority should be concentrated in fewer hands. At a time when the agency needs to make important policy determinations regarding freeing newly competitive services, such as broadband, from traditional regulation, proceedings addressing these issues have dragged on interminably as the five commissioners have struggled to reach a consensus, and one that is often very muddled at that. Reducing the number of commissioners to three should speed up and improve the decision-making quality. And if the agency is placed in the executive branch, say, as a unit in the Department of Commerce, perhaps a single administrator should head it.

Now that we are in an era in which marketplace discipline for the most part can replace the regulatory mandates fashioned in an earlier era, Declan McCullagh is on to something in urging that it is time to kill the FCC. But assuming the agency doesn't go away entirely, it is high time for its mission and structure to be revised to comport with today's marketplace realities.

Biography
Randolph J. May, president of the Free State Foundation, is a former senior fellow and director of communications policy studies at the Progress & Freedom Foundation in Washington, D.C. The views expressed are his own.

More Perspectives

Mr. May, what planet are you living on?

Mr. May's article "How to reform the FCC" is based on ill-informed facts.

1)Put aside tiresome debates about whether the FCC should be a control/reglulatory agency?

1a) 200,000 emails to the FCC over Janet Jackson's bare breast during the Super Bowl, "Love Sponge" Bob's use of porno on the radio, the radio-promoted sexual intercouse in St. Pat's, the hefty fines against Viacom, Clear Channel are tiresome debates? Tiresome to you Mr. May, not to me. I've spent over 50 years in broadcasting and what you consider expendable is in my opinion why broadcasting has deterioted in public service, editorials, commentary and documentaries. The bottom line reigns. Just ask the thousands who have been laid-off in broadcasting, thanks to automation and acquisition. Where have you been, in the spacecraft on Mars?

2)Marketplace discipline can replace FCC regulatory mandates which are now outdated.

2a) Yes, and while you are it how about putting Howard Stern TV show on at 6pm, instead of 10pm. It will certainly help the art of flatulation and broadcast degredation. Or how about removing news altogether, since you seem to be so very much-up-to-date as to how the public feels. Not that we have much to say. We are supposed to own the airwaves. Thanks to you "ivory tower-know-it-alls", you can really let the industry go to the lower reaches mentioned in Scripture. By the way Other than being a Senior Fellow, Mr. May, just what are your broadcasting credentials? I have posted you my resume:Resume of Bill Wippel Updated 06/21/04

Currently: Freelance public relations consultant as of 7/1/00. Clients include New Hope Child & Family Agency, the Lutheran Compass Center. Reading the Seattle P-I for the blind over WA State Library on the Blind FM station. Doing station breaks and commercials for KYAK, Yakima; KSPO/KTRW, Spokane, KGDN, Tri-Cities, KTBI, Ephrata and KTAC, Moses Lake.currently 1st. VP of the Burien Lions Club. Member Society of Professional Journalists, Western Washington chapter. Monthly speaker at Mens Shelter, Seattles Union Gospel Mission. Married, one child, two stepchildren, seven grandchildren. A 20-year-resident of Normandy Park, WA. Charter member, Evergreen Church (Foursquare). President of Gods Grace in Action, a Web site for South King County churches to aid the poor.

Experience: BA Communications1972, St. Norbert College, DePere, WI.; Past president, secretary and bulletin editor of the Seattle-Rainier Lions Club; Director of community relations for Seattles Union Gospel Mission 11/91 to 6/00. Involved in broadcast communications for over 50 years, starting in high school in 1950. Career from 1950 until 1990 included news reporting in radio and television, radio station management, ownership, sales and promotion. Anncr/dj: KNEW, KUOW, KXLE, KUTI, WCCO; news anchor/street reporter: KOL, KIXI, WBAY-TV, KCIS; News Director: KSTW-TV, 710 KIRO; Sales: KOZE, KORD, KSEA; Owner: KOFE

Achievements: Presented Report to Nation for the Boy Scouts of America to President Eisenhower in the White House, February 1953. Won a regional Emmy in 1969 for a documentary on teenage drug addiction. Placed in annual Excellence in Journalism competition for the state, sponsored by Sigma Delta Chi (aka Society of Professional Journalists) in 1963, 65, 66, 67, 68 and 69 while working at KIXI Radio news and KTNT-TV news. Placed again in 1974-75 while at KIRO radio. At Seattles Union Gospel Mission a winner in International Union of Gospel Mission public relations competition in 1992, 93, 94, 95, 96, 97 and 1998. A winner also in Washington State Press Association competition 1992, 93, 94, 95, 96, 98 and 99.

Can be reached at residence: 1326 SW 175th, Normandy Park, WA, 98166-3676. Phone: [phone]. Fax: [phone]. Cell phone: [phone]. Beeper: 1-800-998-9484. Email: [e-mail]

[BooksForABuck]

Can we make things worse?

I think everyone is agreed that the FCC is sick. The great Janet Jackson debate is just the most obvious symptom. But moving it to the executive branch would solve none of the problems and would create new ones.

It is scary to think that the FCC is actually growing. When I worked there in the early 1980s, the Mass Media Bureau had something like three hundred employees and the Common Carrier Bureau about two hundred. How you could manage three thousand is hard to imagine.

So, yes, it would be nice if we could get the Commission under control, deregulate more, encourage competition more, and generally get out of the censorship business. But, do you really think that turning it over to the religious fanatics who run the Bush administration would do this. I'd like to comment on one line, in particular, in the column: 'there is no reason why any purely adjudicatory decisions, such as individual licensing matters, cannot be insulated from inappropriate political interference.' Really? Consider the recent decision to ban the morning after pill from non-perscription distribution despite the scientific consensus that it was safe. Purely political, of course. Not that the FCC isn't controlled by similar intolerant types, but at least there are a couple of members of the opposition who can and do (rarely) take stands pointing out how intellectually corrupt the current directions are.

Reform it--yes. Toss it out? Great. Give it to the executive branch--and they've got another wonderful weapon to stiffle public speech.

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Changing the FCC

Granted the FCC is long overdue for changes. But the worst thing that could be done is place it under executive authority. Especially considering the actions of the Bush Administration.