“Congress should rationalize the [Federal Communications] Commission, apportioning the majority of its functions and resources to its sister agencies. In particular, Congress should consider merging the FCC’s competition and consumer protection functions with those of the Federal Trade Commission (“FTC”), thus combining the FCC’s industry expertise and capabilities with the generic statutory authority of the FTC.”
That is the core argument made in comments submitted today (0) by several scholars affiliated with AEI’s Center for Internet, Communications, and Technology Policy (the home of TechPolicyDaily.com) to the House Energy and Commerce Committee. These comments are submitted in response to the white paper (1) released earlier this month by Representatives Upton and Walden. The white paper, entitled “Modernizing the Communications Act”, was released “as the first step toward modernizing the laws governing the communications and technology sector.”
Our comments are based upon two foundational points. First, the historical silo-based approach to communications regulation is inapposite to the modern communications ecosystem. Second, the FCC’s functions are largely duplicative of those of other agencies.
It is therefore our view that Congress should revise the approach taken by the Communications Act, eliminating the silo-based structure and replacing it with a technology-neutral, competition-oriented approach. Concurrent with this process, Congress should rationalize the Commission, apportioning the majority of its functions and resources to its sister agencies.
In particular, Congress should consider merging the FCC’s competition and consumer protection functions with those of the FTC, thus combining the FCC’s industry expertise and capabilities with the generic statutory authority of the FTC. More broadly, it is our view that many of the important functions and resources currently housed in the Commission can be redeployed – not eliminated – to yield a more coherent and streamlined regulatory edifice that would more effectively serve the goals of consumers, competitors, and Congress.
The Communications Act’s current, silo-based approach is no longer a reasonable way to approach the communications industry. While there are historical reasons for the Act to have been structured in this way, the silo approach is a poor fit for the modern, converged, communications marketplace. This is most clear in the case of the Internet, where the silo-approach has raised serious questions and created substantial uncertainty as to what rules apply to the various technologies and sectors that make up the Internet ecosystem. Such a structure does not facilitate the continued development of converging technologies and distorts or disrupts competition between otherwise competitive technologies.
At the same time, the Commission’s jurisdiction and duties in some respects duplicate or overlap with the jurisdiction and duties of other agencies. The most obvious example relates to competition regulation and consumer protection, where the Commission’s authority overlaps with that of the FTC and the Department of Justice. The Commission’s spectrum management duties are complementary to those of NTIA – the Commission and NTIA have both therefore developed many duplicative competencies. In international communications matters, the Commission’s role is limited to that of advising the Department of State.
This sort of duplication is inefficient and costly. It creates needless confusion for both regulated parties and consumers. It increases the costs and complexity of administration and makes the agencies less responsive to consumer concerns. Maintaining the FCC and its sister agencies as separate entities with closely related subject matter divided along an uncertain technological boundary is the functional equivalent of silo-based regulation. It is, in fact, worse, because the silos are administered by separate agencies.
We acknowledge that this proposal presents various substantial practical and political problems. The comments we have submitted today are not a fully-developed comprehensive proposal, but rather the basis for serious discussion of the future of communications regulation. The 1996 Telecommunications Act began the regulatory process of facilitating competition in the communications market. Having born much fruit, today’s conversation is about transitioning from sector-specific regulation to competition-oriented regulatory approaches. We have been down this road in the past. As with the airline and railroad industries, moving away from sector-specific regulation meant placing primary regulatory authority in the antitrust agencies, and transferring the Civil Aeronautics Board’s remaining functions to the Department of Transportation and the Interstate Commerce Commission’s remaining functions to the Surface Transportation Board.
Thus, the idea of merging the Commission’s competition-oriented functions with the FTC’s existing competition and consumer-protection authority, and its other functions to its sister agencies, is not unprecedented. The notion of rationalizing responsibilities of federal agencies has had currency for some decades. We have seen it with the CAB and ICC. And similar mergers of and transfers of authority and resources between agencies actually occur with some regularity. Establishing the Department of Homeland Security involved merging and reassigning elements of various other agencies; the Department of Defense resulted from the merger of the previously independent military agencies. The current Department of Health and Human Services and Department of Education were once part of a single department. And President Obama has endorsed the idea of merging duplicative agencies in the past. The move to make government more efficient through consolidation and re-conception of agencies is supported broadly by Americans and is also enabled by technological advancement.
We look forward to providing further input to the Committee as its Communications Act Modernization process continues, and to the vigorous discussions that our and other comments will hopefully prompt in the months and years ahead.