The Case for Killing the FCC

19 January 2007 at 1:33 am 3 comments

| Peter Klein |

Jack Shafer has a very nice piece in Slate on the Federal Communications Commission:

Although today’s FCC is nowhere near as controlling as earlier FCCs, it still treats the radio spectrum like a scarce resource that its bureaucrats must manage for the “public good,” even though the government’s scarcity argument has been a joke for half a century or longer. The almost uniformly accepted modern view is that information-carrying capacity of the airwaves isn’t static, that capacity is a function of technology and design architecture that inventors and entrepreneurs throw at spectrum. To paraphrase this forward-thinking 1994 paper (PDF), the old ideas about spectrum capacity are out, and new ones about spectrum efficiency are in.

As every freshman economics student knows — but most regulators (and ecologists) do not — the degree to which a particular resource is “scarce,” in the economic sense, depends on consumer preferences and the state of technology. Oil was not a scarce resource until people learned how to refine it into useful products like kerosene and gasoline. The supply of a given resource, like spectrum, is not fixed, but varies with our knowledge of how, and for what, to use it.

Shafer also points out that the FCC has been not an enabler, but an obstacle, to technological advances in telecommunications. The Commission “stalled the emergence of such feasible technologies as FM radio, pay TV, cell phones, satellite radio, and satellite TV, just to name a few. As Declan McCullagh wrote in 2004, if the FCC had been in charge of the Web, we’d still be waiting for its standards engineers to approve of the first Web browser. ”

Update: James Delong likes it too.

Entry filed under: - Klein -, Classical Liberalism, Institutions.

Ode to the RIAA “Atheist” Academics

3 Comments Add your own

  • 1. Sudha Shenoy  |  19 January 2007 at 10:25 am

    1. The FCC ‘protects’ existing users of the spectrum against competition; I believe TV station & network owners in the US are not above expressing their gratitude for this.

    2. What will all those officials do if the FCC is abolished?

  • 2. Shawn Ritenour  |  22 January 2007 at 9:43 am

    Congratulations goes to Peter Klein for this item being one of four entries throughout the entire blogosphere featured in Sunday’s Pittsburgh Tribune-Review’s “Best of the Blogs” column!

  • 3. Not that you need more convincing » Doctor Recommended  |  31 January 2007 at 1:35 pm

    […] Klein pointed to a piece on Slate regarding the fallacious need for an FCC, how its existence hurts market innovation much […]

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