An observer of the federal administrative/regulatory system once pointed out that government agencies can be divided into two categories: “deliver the mail” and “Holy Grail.” “Deliver the mail” agencies perform neutral, mechanical, logistical functions; they send out Social Security checks or—deliver the mail. “Holy Grail” agencies, on the other hand, pursue an often more controversial and difficult mandate to realize some grand, moral or civilizing goal.
The Federal Radio Commission came into being primarily to “deliver the mail”—i.e., to act as a traffic cop of the then-chaotic airwaves. Both the FRC, and its successor agency, the Federal Communications Commission, also had a vague but oft-repeated Holy Grail clause written into their charters: the requirement that they uphold the “public interest, convenience and necessity.”
Perhaps no single area of communications policy has generated as much scholarly discourse, judicial analysis and political debate over the last 80 years as has that simple directive to regulate in “the public interest.” Critics of this standard often charge that the phrase is vague to the point of vacuousness, providing neither guidance nor constraint on the commission's action. Former FCC Chairman Michael Powell likened the public-interest concept to an empty vessel into which people pour their own preconceived views or biases.
If the history of this elusive regulatory standard makes anything clear, it is that just what constitutes service in the public interest has meant different things at different times. In the early 1940s, the FCC said that editorializing by broadcasters violates the public interest. By 1949, the commission had concluded that editorializing was not all bad. Eleven years later, editorializing had become one of the major elements usually necessary to satisfy the public interest.
The notion of scarcity has been the underlying rationale for using the public-interest standard to regulate the programming practices of broadcasters. In 1984, the Supreme Court, in FCC v. League of Women Voters of California, stated that it was prepared to revisit the scarcity concept if Congress or the FCC signaled “that technological developments have advanced so far that some revision of the system of broadcast regulation may be required.” Fourteen years later, the U.S. Court of Appeals for the D.C. Circuit, in Tribune Co. v. FCC, commented that the Supreme Court's suggestion “may impose an implicit obligation on the commission to review the spectrum scarcity rationale.”
The Supreme Court's decision was rendered nearly a quarter-century ago, at a time when the world of media communications was analog, consisting primarily of paper, ink and airwaves. The Internet, satellite technology, digital broadcasting and wireless broadband have revolutionized the way Americans communicate. The Justice Department, in approving the XM/Sirius merger, recognized the highly competitive and expanding audio market.
Technological developments have advanced so far that the time has come for both Congress and the FCC to revisit and renounce the notion of scarcity in today's digital world. That action is consistent with a research recommendation contained in a paper issued by the FCC's Media Bureau in March 2006 that concluded the scarcity rationale for regulating broadcasting is no longer valid and is based on fundamental misunderstandings of physics and economics, efficient resource allocation and technology.
The FCC should bury the scarcity rationale and adopt the approach advocated by former FCC Chairman Mark Fowler, to apply a public-interest standard based on minimally regulated marketplace forces rather than content regulation. Fowler once said that whether you call the public-trusteeship model of regulating broadcasters “paternalism” or “nannyism,” it is Big Brother, and it must cease. Amen.