Sunday, October 06, 2013

FCC Reform: Putting Consumers First

Even while the government is in shutdown mode, here at the Free State Foundation we continue to work hard. In other words, we keep on thinking. 
After I founded the Free State Foundation, when my mother was alive, we had this little routine going. She would say: "Randy, I don't get it. What do you do in a think tank?" 
And I would respond: "We think!" 
And my mother would say: "Randy, what do you think about?" 
And I'd always answer: "Well, Mom, I've got to think about that first!" 
Well, over the weekend, as I was looking back over our work from the past couple of weeks, I found myself thinking about consumers and consumer welfare – and about how the focus of our work is, or at least always aspires to be, about promoting consumer welfare, and not the interest of any particular company or industry segment over another. 
In other words, it's not about whether any particular company, product, or service ultimately thrives or survives. Some will and some won't. It's not about "leveling the playing field" for the benefit of one company or another, for, in reality, "level the playing field" pleas are often just cries for government intervention by one set of competitors seeking advantage over others. 
No, it's about whether the marketplace is working – or, especially with respect to the communications marketplace, whether the marketplace is allowed to work – in a way that enhances consumer welfare. 
Our orientation at FSF is, unabashedly, in the free market direction. That is to say that when sufficient marketplace competition exists, such marketplace competition generally protects consumers better than government regulation. Or put in more economic lingo, the costs of relying on government regulation in such a situation generally are greater than the benefits. Or, in such a situation, the marketplace is more efficient and welfare-enhancing in protecting consumers than government regulation. 
Now, I appreciate that there are differing views as to the extent of competition that is sufficient to forego regulation and the extent of competition that presently exists in various communications market segments. Fair enough. 
I don't propose to resolve those differing views here. I'll just say, having watched – and participated in – the evolution of the communications marketplace for over thirty-five years now, in my view sufficient competition now exists in most communications market segments for the FCC to regulate considerably less than it presently does. The agency needs to rely more on marketplace competition to protect consumers and less on regulatory mandates. 
In reading over several of our pieces this past weekend, I was reminded how effectively – at least to my mind – they make the case for less regulatory intervention by the FCC and more reliance on the marketplace, all with the welfare of the consumer foremost in mind. Here I just want to list some of these pieces, with their links, in case you haven't had a chance to read them, or would like to take another look. The subject matter ranges from net neutrality mandates to video navigation device deregulation to incentive spectrum auctions and more. 
It's The Consumer, Stupid!Randolph May 
Let Them Eat Cake and Watch NetflixJustin (Gus) Hurwitz
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Now, a final note: At the outset I mentioned the government shutdown. And throughout this piece, I have suggested that the FCC ought to be intervening in the marketplace less, considerably less, than it presently does. It follows that if it implemented this less regulatory course and reoriented its mission, the agency could, and should, be slimmed down.
But this does not mean that there are not, at present, important functions for the FCC to perform, or important work for the agency to do. And nothing I have said is meant to imply that the FCC commissioners, and the vast majority of the staff, are not dedicated, knowledgeable public servants. They are. When the shutdown ends, I'm sure they'll be back on the job doing their best.