On Tuesday, March 6, the U.S. House of Representatives voted unanimously to pass a bill to reauthorize the Federal Communications Commission (FCC), an agency with expansive authority that’s been running on autopilot in many ways since Congress last reauthorized it in 1990.
The legislation, now in the Senate’s hands, comes at a pivotal time for telecommunications, with lawmakers sharply divided over whether federal bureaucrats should play a central role in deciding the Internet’s future. Hopefully, Congress recognizes that the FCC’s costly regulations hinder not only Internet businesses and their competitors, but limit consumers’ access to information and drive up prices.
{mosads}Under the leadership of Chairman Ajit Pai, the FCC has worked hard over the past year to undo obsolete regulations, modernize its internal processes, and reverse its disastrous decision in 2015 to subject Internet service providers to public utility regulation. But the agency itself can do only so much to promote economic freedom due to constraints placed on it by federal law. Only congressional action can serious restructure the FCC as it currently exists, moving some of its functions elsewhere in the federal government while eliminating other duties entirely. Lawmakers have plenty of work to do, as the bill passed by the House on March 6 leaves the FCC’s structure and processes largely unchanged.
Created when Congress passed the Communications Act of 1934, the FCC wields broad powers to regulate broadcasters, telecommunications services, and wireless providers. Recently, the FCC even claimed to have the power to regulate Internet access. Yet the economic and technological realities that purportedly justified the creation of this agency 83 years ago no longer hold true. Information scarcity has given way to information abundance, and Americans today do not depend on a tiny handful of companies to communicate with one another and learn about the world around them. To truly liberalize America’s media and communications markets, Congress must step in and rewrite the Communications Act to bring the FCC into the 21st century.
Despite recent progress, the FCC continues to regulate many sectors as if it were 1996 — or, in some cases, 1934. For example, even as Internet outlets have brought fierce competition to local radio and television broadcasters, federal media ownership laws limit how many local broadcasters a single person or company can own in a single city. These laws purport to promote a diversity of voices; in fact, these rules do far more to reduce the number of viable media outlets in communities across the nation.
Similarly, when it comes to television, the FCC’s current regulatory regime can be traced in large part to a 1992 law, the Cable Television Consumer Protection and Competition Act. Remarkably, the most recent effort in Congress to address the FCC’s treatment of television companies involves the emergence of satellite carriers, which were already well established by 2000. Yet instead of seeking to relax legacy rules in light of cord-cutting, with consumers dropping cable TV subscriptions in favor of Internet video platforms like Netflix and Hulu, the FCC under the Obama administration pondered imposing new rules on cable set-top boxes and subjecting some Internet video services to rules designed for cable companies.
The FCC also possesses considerable control over the airwaves, which are used by every American who owns a cell phone, Wi-Fi hotspot, or a plain old radio. Because of FCC rules, many of the most valuable airwaves cannot be licensed by wireless providers. The resulting scarcity of spectrum means that consumers pay higher prices for inferior mobile broadband service than they would in a more competitive market environment.
By reviewing these regulatory pitfalls the FCC has created and removing some of the sweeping authority granted to the agency years ago, our government can better serve us as taxpayers and consumers as we move toward a world with less regulated internet, television, and airwaves.
Ryan Radia is a research fellow and regulatory counsel at the Competitive Enterprise Institute.