Sack the FCC?

Talking like a screaming, slashing, deranged libertarian gov-o-smasher, Declan McCullagh of CNET wants to abolish the FCC and offers to dynamite their building himself – okay I made that part up:

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 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 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 and make a national example of Janet Jackson’s right breast. Commissioners are planning how to order voice-over-Internet Protocol (VoIP) companies to comply with arguably unlawful wiretapping requests from the FBI. In a sop to Hollywood, the FCC has decided that any device capable of receiving digital television signals must follow a complicated set 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 to receive preliminary approval from the Wireline Competition Bureau. 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.

….In his excellent 1997 book “Law and Disorder in Cyberspace,” Manhattan Institute fellow Peter Huber 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…

And so on and so forth. Regulation and deregulation are very tricky, often unpredictable actions, and ironically what I, anyway, and much of the public have railed against regardign the FCC over the last few years has most often been NOT ENOUGH regulation (unless it involves something that the media moguls feel threatened by, like low power FM), or least not actively enforcing what regulation it already has, seemingly in the thrall of the major media conglomerates. I agree that the FCC needs to be reminded on a very regular basis that they serve the public, not the media corporations, but I don’t think eliminating it is the answer. Auction off the spectrum to the highest bidders? Only the largest and most wealthy corporations could afford a seat at the table – you’d have even greater cnsolidation and homoginization than now. Zero content regulation? Do we want broadcast TV and radio to mirror the anything goes of the Internet and cable? Shouldn’t the “public” airwaves reflect some semblance of public standards?