[FoRK] [McCullaugh] It's time to abolish the FCC

Gordon Mohr gojomofork at xavvy.com
Tue Jun 8 02:29:27 PDT 2004


Less censorship. Less protection for politically-favored incumbent operators.
More innovation. Sounds like a winner to me.

- Gordon

#
# Why the FCC should die
#
# By Declan McCullagh
# <mailto:declan.mccullagh at cnet.com?subject=FEEDBACK:Why the FCC should die>
# http://news.com.com/2010-1028-5226979.html
# Story last modified June 7, 2004, 4:00 AM PDT
#
#
# *It's time to abolish the Federal Communications Commission.*
#
# The reason is simple. The venerable FCC, created in 1934, is no longer
# necessary.
#
# Its justification for existence was weak 70 years ago, but advances in
# technology since then have eliminated whatever arguments remained.
# Central planning didn't work for the Soviet Union, and it's not working
# for us. The FCC is now an agency that does more harm than good.
#
# Consider some examples of bureaucratic malfeasance that the FCC, with
# the complicity of the U.S. Congress, has committed. The FCC rejected
# long-distance telephone service competition in 1968, banned Americans
# from buying their own non-Bell telephones in 1956, dragged its feet in
# the 1970s when considering whether video telephones would be allowed and
# did not grant modern cellular telephone licenses until 1981--about four
# decades after Bell Labs invented the technology. Along the way, the FCC
# has preserved monopolistic practices that would have otherwise been
# illegal under antitrust law.
#
# These technologically backward decisions have cost Americans tens of
# billions of dollars.
#
# More recently, the FCC has experienced a string of embarrassing losses,
# when its grand telecommunications plans
# <http://news.com.com/FCC+loosens+broadband+rules/2100-1033_3-985313.html?tag=nl>
# were repeatedly vetoed by the courts. A majority of the commissioners want
# to force local phone companies to pay government-mandated rates when
# long-distance providers like AT&T and MCI use their phone lines. A
# federal appeals court recently shot down that scheme
# <http://news.com.com/Court+rebuffs+FCC%27s+new+telecom+rules/2100-1034_3-5168628.html?tag=nl>
# and gave the Bush administration until June 15 to appeal to the Supreme
# Court. There's already talk about higher telephone bills becoming a
# campaign issue this fall.
#
# Meanwhile, the FCC is hard at work, trying to figure out how to muzzle
# Howard Stern
# <http://news.com.com/FCC+sends+dirty+joke+to+email+list/2100-1023_3-225577.html?tag=nl>
# and make a national example of Janet Jackson's right breast
# <http://news.com.com/Janet+Jackson%27s+flash+dance+tops+Web+search/2100-1026_3-5153330.html?tag=nl>.
# Commissioners are planning how to order
# <http://news.com.com/FBI+adds+to+wiretap+wish+list/2100-1028_3-5172948.html?tag=nl>
# voice-over-Internet Protocol (VoIP) companies to comply with arguably
# unlawful wiretapping requests from the FBI
# <http://news.com.com/Shhh%21+The+FBI%27s+listening+to+your+keystrokes/2010-1028_3-5193750.html?tag=nl>.
#
# * There's already talk about higher telephone bills becoming a campaign
# issue this fall. *
#
# In a sop to Hollywood, the FCC has decided that any device capable of
# receiving digital television signals must follow a complicated set
# <http://news.com.com/Are+PCs+next+in+Hollywood+piracy+battle%3F/2100-1028_3-5103305.html?tag=nl>
# of "broadcast flag" regulations. When those rules take effect in
# mid-2005, they will put some PC tuner card makers out of business.
#
# These signs warn of an agency that is overreaching. If the FCC had been
# in charge of overseeing the Internet, we'd likely be waiting for the
# Mosaic Web browser <http://news.com.com/Mother+of+invention/2009-1032_3-995679.html?tag=nl>
# to receive preliminary approval from the Wireline Competition Bureau
# <http://dw.com.com/redir?destUrl=http%3A%2F%2Fwww.fcc.gov%2Fwcb&siteId=3&oId=2102-1028-5226979&ontId=1023&lop=nl_ex>.
# Instead, the Internet has transformed from a research curiosity into a
# mainstay of the world's economy--in less time than it took the FCC to
# approve the first cell phone licenses.
#
# Even ardent supporters of the FCC should admit that there's less
# justification for its existence after the Telecommunications Act of 1996
# <http://news.com.com/Remaking+the+Telecommunications+Act/2100-1033_3-252065.html?tag=nl>,
# which removed some barriers to competition. Local phone customers don't
# need to worry about the Bells' monopolistic practices, because they
# effectively aren't monopolies anymore. Cable customers don't need to
# worry much about monopolistic practices because of satellite TV.
# Eventually, fiber connections will transport every kind of data.
#
# *Historical justification*
# The original justification for existence of the FCC was to rein in an
# unruly marketplace. That thinking dates back to the 1920s, when Commerce
# Secretary Herbert Hoover
# <http://dw.com.com/redir?destUrl=http%3A%2F%2Fwww.whitehouse.gov%2Fhistory%2Fpresidents%2Fhh31.html&siteId=3&oId=2102-1028-5226979&ontId=1023&lop=nl_ex>,
# an engineer by training, was worried about the unregulated new industry
# of broadcasting. Hundreds of radio stations had been launched, and the
# only requirement was that they register with the Commerce Department.
#
# Conflicts began to arise. The Navy complained of the "turbulent
# condition of radio communication." But courts were already undertaking
# the slow but careful common-law method of crafting a set of rules for
# the new medium. An Illinois state court decided in 1926, for instance,
# that Chicago broadcaster WGN had the right to a disputed slice of
# spectrum, because "priority of time creates a superiority in right."
#
# But Hoover and Congress didn't give the courts a chance. The Radio Act
# of 1927
# <http://dw.com.com/redir?destUrl=http%3A%2F%2Fen.wikipedia.org%2Fwiki%2FFederal_Radio_Commission&siteId=3&oId=2102-1028-5226979&ontId=1023&lop=nl_ex>,
# followed by the Communications Act of 1934
# <http://dw.com.com/redir?destUrl=http%3A%2F%2Fen.wikipedia.org%2Fwiki%2FCommunications_Act_of_1934&siteId=3&oId=2102-1028-5226979&ontId=1023&lop=nl_ex>,
# gave the FCC unlimited power to assign frequencies, approve
# broadcasters' power levels and revoke licenses on a whim. The FCC
# already enjoyed the power to regulate telephone lines and eventually
# would accumulate the authority to regulate cable as well.
#
# Abolishing the FCC does not mean airwave anarchy.
# * If the FCC had been in charge of overseeing the Internet, we'd likely
# be waiting for the Mosaic Web browser to receive preliminary approval
# from the Wireline Competition Bureau. *
#
# What it means is returning to bottom-up law rather than the top-down
# process that has characterized telecommunications for the last 80 years.
#
# *How to do it...*
# In his excellent 1997 book "Law and Disorder in Cyberspace
# <http://dw.com.com/redir?destUrl=http%3A%2F%2Fwww.phuber.com%2Fhuber%255Ccl%255Ccl.htm&siteId=3&oId=2102-1028-5226979&ontId=1023&lop=nl_ex>,"
# Manhattan Institute fellow Peter Huber
# <http://dw.com.com/redir?destUrl=http%3A%2F%2Fwww.phuber.com&siteId=3&oId=2102-1028-5226979&ontId=1023&lop=nl_ex>
# describes how the privatization process could work. Huber proposes that
# the government sell off standard units of spectrum--10kHz for AM radio,
# 6MHz for television, 25MHz for cellular, 40MHz for PCS--using existing
# geographical contours for each type of frequency.
#
# "Once the standard parcels are defined, they can be sold to the highest
# bidders," Huber writes. "To keep for how long? Forever. Just like land."
# If just one UHF (ultrahigh frequency) television station in Los Angeles
# were permitted to transfer its spectrum to a third cellular provider,
# Huber estimates, "the overall public gain would be about $1 billion, or
# so the government itself estimated in 1992." Wireless technologies would
# be huge winners, if the spectrum were privatized.
#
# What if disputes over spectrum arose? The answer is simple. Whoever
# owned the rights to that slice of virtual real estate would locate the
# illicit broadcaster, march into the local courthouse and get a
# restraining order to pull the plug on the transmitter. Trespass is
# hardly a new idea, and courts are well-equipped to deal with it.
#
# One fear is that some predatory monopolist, a Microsoft of the airwaves,
# would end up owning all of the spectrum. That won't happen. First, the
# market value of the spectrum would approach $1 trillion, out of the
# reach of any individual corporation. Second, antitrust laws would remain
# on the books. The Department of Justice could wield the Sherman
# Antitrust Act
# <http://dw.com.com/redir?destUrl=http%3A%2F%2Fwww.usdoj.gov%2Fatr%2Ffoia%2Fdivisionmanual%2Fch2.htm&siteId=3&oId=2102-1028-5226979&ontId=1023&lop=nl_ex>
# to challenge unlawful conduct and block mergers.
#
# Now is the perfect time to ask whether the FCC should continue to exist.
# Congress is considering revisions to the 1996 Telecommunications Act,
# and some courageous politicians are wondering out loud whether the
# hundreds of pages of legalese are still necessary.
# * Abolishing the FCC does not mean airwave anarchy. *
#
# At a hearing last month, Rep. Chris Cox
# <http://dw.com.com/redir?destUrl=http%3A%2F%2Fcox.house.gov&siteId=3&oId=2102-1028-5226979&ontId=1023&lop=nl_ex>,
# R-Calif., asked whether "perhaps we should declare victory" and ditch
# the FCC. Beyond the economic cost of missed opportunities caused by
# regulation, it would also immediately save taxpayers
# <http://dw.com.com/redir?destUrl=http%3A%2F%2Fwww.fcc.gov%2FReports%2Ffcc2005budget.html&siteId=3&oId=2102-1028-5226979&ontId=1023&lop=nl_ex>
# $300 million a year.
#
# It's true that imagining a telecommunications world without the FCC is
# not easy. But imagining a telecommunications world not dominated by Ma
# Bell was difficult two decades ago, and it was not easy for the Eastern
# European countries to imagine life without the Soviet Union.
#
# Since then, those formerly communist nations have privatized resources
# formerly owned by their governments, with remarkable results. Estonia is
# Europe's new economic wonder
# <http://dw.com.com/redir?destUrl=http%3A%2F%2Fcf.heritage.org%2Findex2004test%2Fcountry2.cfm%3Fid%3DEstonia&siteId=3&oId=2102-1028-5226979&ontId=1023&lop=nl_ex>:
# revenue from state-owned property is a smaller percentage of the economy
# than it is in the United States, and its economy is growing more than
# twice as fast as ours.
#
# That should be a lesson. It's time for the FCC to go.
#
#
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