Jack Shafer on Telecom Policy
Sunday, January 28th, 2007Jack Shafer at Slate has recently begun writing more about Telecom policy, and the following are a few comments.
In “New Wave: The case for killing the FCC and selling off spectrum,” Shafer revisits to the classic Coase argument that spectrum should be privatized, and adds to it a suggestion that the FCC should be abolished. Both of these are old arguments in the telecom world, but I won’t quibble since this is not academia.
Shafer is right: there is indeed a good case for privatizing alot more spectrum than is currently privatized.  Most agrees with Shafer on the need for spectrum reform. And its good to point out. Michael Powell’s 2003 spectrum task force, for example, recognized the same issues. But then that’s where the article goes wrong.
First, perhaps because Shafer relies a little to much on Thomas Hazlett’s papers, Shafer neglects to discuss in much detail the fact that in addition to privatization, there is also a strong case for dedicating much more to common-usage. Unlicensed spectrum has been a huge success –for things like the successful 2.4 GHz band used for WiFi and the wireless mouse I’m using right now.
Second, the article gets the source of the problem wrong.  Shafer mostly blames the FCC. But in truth the problem is not so much the FCC, but existing licensees of spectrum (who Shafer does mention). TV and radio Broadcasters control, through licenses, giant swathes of the most valuable spectrum, and have Congress on their side. So even if the FCC wanted to voluntarily give up its role policing spectrum, and many at the FCC do, little would happen without Congress.
Third, while its fun and easy to attack the FCC, abolishing it would hardly help things.  First, everyone agrees that part of the spectrum — emergency, coast guard, military, and so on, need to remain regulated for public safety and service. Second, to privatize spectrum, someone has to run the auction, and that’s something the FCC has done well.
Finally, and most importantly, there’s a non-sequitor at the center of the thesis. Whatever you think of spectrum, there is much that the FCC does that has nothing to do with spectrum. In that sense, even if the FCC was divested of all spectrum responsibilities, its other duties would remain.
While its a complex topic, in any discussion of abolishing the FCC we have to recognize that the FCC has one big success story to its credit: The deregulation of network attachments in the 1970s, leading to the standardized telephone jack, which I discuss in this Slate piece. So if you want to assess the merits and failures of the FCC, perhaps both the bad and good need to be taken into account.
In short, while I’ve been a critic of the FCC too, the critiques should be fair. Blaming the FCC for our spectrum fiasco is a little like blaming the military for the Iraq fiasco — in both cases, the mistakes were made at the top. We have a terrible spectrum policy in this country. But the FCC is for the most part not the villain, but an unwilling executioner of a policy driven by Congress and the Broadcaster’s lobby.
