Subject: [NEXTEL-1] Commentary: How to Save the FCC

From: NEXTEL-1
Date: Wed, 23 Jun 2004 01:41:29 -0400

How to save the FCC
By Randolph J. May

Special to ZDNet
June 22, 2004

COMMENTARY
In his June 7 Perspectives column, "Why the FCC should die,"
-http://news.com.com/2010-1028-5226979.html
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The notion of telephone and media monopolies is outdated today,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.

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 is senior fellow and director of communications
policy studies at the Progress & Freedom Foundation
(http://www.pff.org/)
in Washington, D.C.

 http://zdnet.com.com/2100-1107-5243237.html

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