You're familiar with the old saying, "The more things
change, the more they stay the same."
For me, the quip calls to mind the Federal Communications
Commission. Despite the competitive developments that have occurred in the
communications marketplace since passage of the Telecommunications Act of 1996,
the FCC is essentially the same size and regulates much in the same way as it
did in 1996.
This shouldn't be the case.
Congress declared in the 1996 Telecom Act's preamble its
intent "to promote competition and reduce regulation." The primary
legislative report stated the law was intended to create a "deregulatory
national framework." Normally, the development of competition replaces the
need for regulation, which, concomitantly, reduces the need for as many
regulatory personnel. This is a general proposition to which almost all subscribe.
Except it hasn't ever worked that way at the FCC. And even
now, despite the fact that market segments regulated by the agency are becoming
ever more competitive, there are no signs – absent congressional intervention –
that it will work that way.
In fact, over the course of the 15-year period since the
1996 Act's adoption, the FCC's staffing level (as measured by full-time
equivalent staffers) has grown from 1755 (reported in the FCC's 1997 Annual
Report) to 1917 now. Assuming that some of the increase in FTEs is attributable
to additional staffing hired in connection with post-1996 Act implementation
activities, in the last decade, despite the increase in competition in the
markets subject to FCC regulation, the number of FCC FTEs has remained
essentially steady.
The chart below shows the number of FCC FTEs over the past
decade.
Fiscal Year
|
FCC FTEs
|
FTC FTEs
|
FY
2012
|
1,917
Projected
|
1,176
Estimated
|
FY
2011
|
1,917
|
1,155
|
FY2010
|
1,905
|
1,133
|
FY2009
|
1,820
|
1,106
|
FY2008
|
1,775
|
1,093
|
FY2007
|
1,793
|
1,059
|
FY2006
|
1,816
|
1,005
|
FY2005
|
1,899
|
1,019
|
FY2004
|
2,015
|
1,057
|
FY2003
|
1,995
|
1,051
|
FY2002
|
1,975
|
1,054
|
FCC Source: Fiscal
Year 2012 Budget Estimates Submitted to Congress
2011/2012:
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-304636A1.pdf
FTC Source: Fiscal Year 2013Congressional Budget Justification, page 36
In addition to showing the number of FCC FTEs from 2002 -
2012, the chart also shows the number of Federal Trade Commission FTEs for the
same period. It is interesting – and instructive as well – that the FTC, with
its dual consumer protection and competition regulatory responsibilities cutting
across all U.S. markets, operates with only 1176 FTEs. The FTC generally is
regarded as a well-managed and effective agency.
Moreover, the FCC's budget has increased substantially over
the past decade. According to the respected joint study of the Weidenbaum
Center, Washington University, and the Regulatory Studies Center, George
Washington University, since FY 2000, the amount spent by the FCC on regulatory
activity has increased from $269 million to $446 million. These amounts are the
budgetary "outlays" attributable to the agency's regulatory
activities, gross of regulatory fees collected. This data is derived directly
from the annual Budget of the United
States. The Weidenbaum/RSC report may be found here and
the above figures may be found in Table A-1.
Again, the increased agency spending on regulatory activity
throughout the past decade occurred as competition continued to increase in
market segments subject to FCC regulation.
Small wonder then that, in recently reducing the FCC's
appropriation mark for FY 2103 by $17 million less than the Commission has requested,
the House Committee on Appropriations determined, "the
current organizational and management structure of the Commission does not
reflect the convergence in today’s telecommunications market." Significantly,
the committee concluded "[t]he
increase in market-based competition should result in a smaller Commission with
fewer staff." And it directed the Commission "to submit a review
of the current FCC organizational structure as well as a proposal for improvement
that reflects today’s technology landscape and competitive marketplace."
As I stated at the outset, it is
widely accepted that increased competition should lead to reduced regulation,
which, in turn, should lead to a reduced number of staff and a reduced
regulatory budget. I am not suggesting, and I do not suppose the House
Appropriations Committee is suggesting, that there should have been a
straight-line reduction, or a reduction in every year. But, over time, as
competition increases and replaces the need for regulation, there should be a
meaningful reduction in the agency's staffing level and the size of its
regulatory budget.
I am confident this is what
Congress anticipated when it declared the 1996 Telecom Act was intended to
"promote competition and reduce regulation."
And I assume then-FCC Chairman
William Kennard had in mind much the same when he released a strategic
plan for the FCC in 1999 that began with this
very statement: “In five years, we expect U.S. communications markets to be
characterized predominately by vigorous competition that will greatly reduce
the need for direct regulation."
James Byrnes once said:
"The nearest approach to immortality on earth is a government
bureau." As someone who served in all three branches of government as a
member of the U.S. House of Representatives and the Senate, governor of South
Carolina, Secretary of State, and the Supreme Court, Mr. Byrnes knew something
about the ways of government agencies and bureaucratic imperatives.
Mr. Byrnes need not worry. I am
not suggesting the FCC should die, or that it should be crippled. There is
still important work for it to do.
But, as the House committee
report suggests, the Commission does need to reform itself institutionally in a
meaningful way that reflects the marketplace changes that have occurred since
1996. This would require the agency to prioritize its activities to reflect
today's realities, so, for example, it would devote resources to repurposing
spectrum in a timely fashion, rather than to considering re-regulating
services, such as special access, which were deregulated a decade ago.
There simply is no reason for
the FCC to go merrily along in the cause of proving that, "The more things
change, the more they stay the same."