Wednesday, September 3, 2003

The Federal Communications Commission, like other so-called independent regulatory agencies, was created in the image of an idealized Progressive-era vision of government administration. The theory was that these multimember agencies, such as the Securities Exchange Commission and the now-extinct Interstate Commerce Commission and Civil Aeronautics Board, with a bipartisan cohort of expert commissioners, largely would be insulated from politics in carrying out their specialized regulatory missions.

It’s only September, but the FCC already has experienced an especially tumultuous year. Whatever one may think about the direction the FCC is moving — and I think it is moving too slowly to remove outdated regulatory burdens at a time when the communications marketplace is rapidly becoming more competitive — the notion of the agency engaging in a sound decisionmaking through the application of its special expertise is being called into question by this year’s unprecedented turmoil.

Two experiences illustrate why it may be time to begin asking whether the FCC in its current Progressive-era incarnation continues to make sense as an implementer of communications policy. First, consider what happened in the FCC’s proceeding to determine the extent to which incumbent telephone companies like Verizon must share their local telephone networks with competitors like AT&T.

Acting at the direction of a federal appeals court, which held that the agency’s existing rules unlawfully require excessive facilities sharing, the FCC appeared to vote at a public meeting in February at least to eliminate the sharing mandate for newly installed broadband facilities, while leaving it in place for existing voice facilities.

While the FCC should have deregulated considerably more, it exacerbated the notion that it is bumbling by waiting six months after the February vote to issue its official decision making the new rules effective.

Shortly before the agency finally issued the new rules on Aug. 21, FCC Chairman Michael Powell conceded the interminable delay was an “embarrassment” for the agency at a time when the depressed telecommunications and high-tech industries remain frozen in place. Companies that said they would invest in new broadband facilities once the existing uneconomic sharing mandates were eliminated were left waiting … and waiting … for the commission to act.

It is widely known that the five commissioners engaged in fierce squabbling trying to agree on an official written decision. In modern times, there has never been an occasion, and certainly not with respect to a matter as important as reforming the facilities-sharing rules, when the agency has taken anything approaching six months to issue an order after voting at a public meeting.

The second example of conduct that threatens to alter the idea of the FCC as a tribunal whose decisions rest on specialized expertise concerns high jinks from without. On June 2, the commission decided to relax its decades-old rules governing how many and what type of media outlets a single entity may own.

The ownership restrictions are justified only if they are necessary to ensure the public has available a diversity of information sources. In light of media marketplace changes since the rules were adopted, not least of which has been the rise of cable and satellite television and the Internet, the commission probably should have gone even further.

But putting aside the merits, what troubles in this instance are the novel tactics employed by opponents of ownership rule relaxation. They mounted an unprecedented organized mass e-mail, post card, and call-in campaign urging the FCC not to change its rules. In the last few weeks before its decision, the agency was bombarded with more than 750,000 e-mails, nearly all form messages containing little of substance relevant to the state of media competition. And on the day of the vote, protesters erupted in shouts inside the commission’s meeting room, while picketers chanted outside.

It is appropriate, indeed desirable, for the American people to debate media ownership policy and to make their views known. And, of course, the commission solicited public comment in official comment rounds. But when the FCC is urged to formulate policy based on the number of e-mails received and picketers marching, as it was explicitly urged to do by many in the media ownership proceeding, our conception of the agency’s role necessarily will be altered. If these electioneering-style tactics become more common, the idea of substantive deliberation informed by agency expertise surely will suffer.

The FCC’s unprecedented delay in issuing a timely decision in the facilities-sharing proceeding and the resort to novel populist organizing tactics designed to influence the agency’s media ownership decision suggest the time may once again be ripe to begin considering some structural reforms at the agency. These might even include questioning whether it is desirable to retain a hydra-headed commission outside of the executive branch.

Within the executive branch, a single-headed agency would at least be politically accountable to the president. Recall when the transportation industries were freed from economic regulation and the ICC and CAB abolished, remaining functions, such as safety regulation, were transferred to the executive branch.

In truth, even putting aside questions relating to the legality of “independent” agencies existing outside of the Constitution’s tripartite structure, the Progressive-era ideal of extrapolitical, independent bodies running mainly on high-octane expertise was never was very realistic. After all, FCC commissioners are appointed by a president with political predilections and must be confirmed by a Senate with a sometimes very different political agenda. And the agency is subject to congressional oversight and budgetary control.

So, perhaps the FCC’s tumultuous year will turn out to be an occasion to spur some new thinking about whether there are reforms that would make the agency function better in an era of rapid marketplace changes.

Randolph J. May, a former FCC associate general counsel, is senior fellow and director of communications policy studies at the Progress & Freedom Foundation. The views expressed are his own.

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