Competition and Cost-Effectiveness Analysis should Drive FCC Policy

Promoting competition, entry, and experimentation with innovative business models should be the goal of an updated Telecommunications Act, states Technology Policy Institute's Scott Wallsten in comments sent to the House Commerce Committee in response to their recent white paper.

In order to achieve these goals, Wallsten urges the Committee to require the Federal Communications Commission to apply competition analysis and cost-effectiveness analysis to its decision making. In addition, Wallsten advises Congress to continue to support schemes for efficient and flexible uses of spectrum. In his comments, Wallsten, TPI Vice President for Research and Senior Fellow, identifies the FCC's current "public interest" standard as "too vague for coherent and consistent policy decisions." Instead, the Commission should apply a better-defined consumer welfare standard, which could make use of competition analysis in its decisions. Such an approach would have two advantages. "First, it becomes possible to construct a framework that allows the Commission to make coherent and consistent decisions," Wallsten explains. "Second, such analysis explicitly makes it possible to think about and quantify how different technologies, products, and services compete with each other, reducing the 'silo' problem."