Editorial: The Dinosaurs Must Go (And We Don’t Mean ‘Terra Nova’)

FCC reg book is full of artifacts of a bygone century and a marketplace where regulatory silos were better suited to industries that could be defensibly divided into phone and wired and wireless

By BCST Staff -- Broadcasting & Cable, 10/3/2011 12:01:00 AM

If you ask FCC Chairman Julius Genachowski, and legislators have, the FCC is in the midst of an ongoing regulatory reform effort that has included excising dozens of rules and dropping datacollection requirements.

That is certainly to be applauded, as we have for things like streamlining tower siting and pole-attachment rates and reducing data-collection burdens.

Props all around, but that is necessary branchpruning that still does not get at the root of the problem. The FCC reg book is full of the artifacts of a bygone century and a marketplace where regulatory silos were better suited to industries that could be defensibly divided into phone and wired and wireless.

Today, of course, Verizon is a phone company, and a wireless company and a multichannel video provider, while cable operators are delivering bundled services in all those areas and more. A holistic look at the marketplace, combined with regulatory humility and a dose of cost-benefit analysis, might do wonders, or at least give the FCC a fighting chance at keeping up with the speed of change and innovation. Too often the FCC appears to be firing at targets in the rearview mirror while the road ahead curves away from it—like putting any time or energy into maintaining broadcast ownership restrictions, but that is another editorial.

This may be the best chance in years for substantive change, since it is not just deregulatory Republicans calling for major review of regulations that could put a crimp in investment and job creation, the mantra of both sides of the aisle, though with different definitions of what that entails.

“The American people must be able to trust that their government is doing everything in its power to stop wasteful practices and earn a high return on every tax dollar that is spent.” That was not a Republican deregulatory reformer, but the president of the United States.

And after a period of uncertainty, given that independent agencies like the FCC were not subject to his mandate for reform plans, President Obama followed up to clarify that he meant for those agencies to come up with a plan, too, even if they technically only have to publish it rather than submit it to the White House.

Last week, Rep. Lamar Smith (R-Texas) introduced a bill that would put an even sharper point on the situation while trying to prevent the sort of 11th-hour edits, additions and deletions in important rulemakings, a bipartisan practice that has drawn the criticism of commissioners forced to vote on items they may not have had a chance to fully vet. It would update the Administrative Procedures Act, which is the rulebook of proper regulatory manners.

Smith and company want evidentiary hearings on high-impact bills, which they define as those with a potential cost to the economy of $1 billion. That seems a tough call to make, but if it is possible, we agree that those need to be able to clear a pretty high hurdle.

The bill would also require agencies to defend major rulemakings according to a higher standard than simply not being arbitrary and capricious. The courts have generally given deference to expert agencies, but that should not be a blank check.

For instance, the Supreme Court upheld the FCC’s profanity enforcement decision not because it was the right one, or even necessarily the constitutional one, and not because the FCC had provided “substantial evidence” standard for its decision, but essentially because it was not indefensible. This bill would hold the FCC to that higher “substantial evidence” for important rulemakings, which we would argue definitely should cover content calls that implicate the First Amendment, no matter what the cost-benefit analysis in dollars and cents is.

A lot of good reform ideas are being offered up. We only hope that some combination can unlock the power of good government under restrained management.