Do we need the FCC?

[Commentary] The Federal Communications Commission under Chairman Tom Wheeler has come under increasing fire for suppressing economic analysis and being politically driven. In effect, we have not had an FCC for the past three years, at least not in the way the agency was intended to operate. So that raises the question: Do we really need the FCC? The answer is “no, but yes.”

There seem to be three reasons why we still have the FCC. One is inertia: Dissolving a federal agency is a large task and Congress often has higher priorities. Second, the FCC is valuable to businesses and interest groups that are benefitting from its activities: The recent work on network neutrality, business data services, and set-top boxes are bestowing benefits to some segments of the industry at the expense of other segments, and at the expense of customers, who ultimately bear the brunt of regulatory rent seeking. The FCC’s universal service subsidies have, for example, delivered profits to numerous telephone companies over the years. And the cottage industries formed in support of net neutrality, set-top box regulation, and universal service policies employ a large number of people. The third reason we still have an FCC appears to be that it is important to keep radio spectrum allocation independent of day-to-day political pressures.

[Jamison is director and Gunter Professor of the Public Utility Research Center at the University of Florida and serves as its director of telecommunications studies.]