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 […]

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

Trackback this post  |  Subscribe to the comments via RSS Feed


Authors

Nicolai J. Foss | home | posts
Peter G. Klein | home | posts
Richard Langlois | home | posts
Lasse B. Lien | home | posts

Guests

Former Guests | posts

Networking

Recent Posts

Categories

Feeds

Our Recent Books

Nicolai J. Foss and Peter G. Klein, Organizing Entrepreneurial Judgment: A New Approach to the Firm (Cambridge University Press, 2012).
Peter G. Klein and Micheal E. Sykuta, eds., The Elgar Companion to Transaction Cost Economics (Edward Elgar, 2010).
Peter G. Klein, The Capitalist and the Entrepreneur: Essays on Organizations and Markets (Mises Institute, 2010).
Richard N. Langlois, The Dynamics of Industrial Capitalism: Schumpeter, Chandler, and the New Economy (Routledge, 2007).
Nicolai J. Foss, Strategy, Economic Organization, and the Knowledge Economy: The Coordination of Firms and Resources (Oxford University Press, 2005).
Raghu Garud, Arun Kumaraswamy, and Richard N. Langlois, eds., Managing in the Modular Age: Architectures, Networks and Organizations (Blackwell, 2003).
Nicolai J. Foss and Peter G. Klein, eds., Entrepreneurship and the Firm: Austrian Perspectives on Economic Organization (Elgar, 2002).
Nicolai J. Foss and Volker Mahnke, eds., Competence, Governance, and Entrepreneurship: Advances in Economic Strategy Research (Oxford, 2000).
Nicolai J. Foss and Paul L. Robertson, eds., Resources, Technology, and Strategy: Explorations in the Resource-based Perspective (Routledge, 2000).

%d bloggers like this: