Dear Congressman Gillmor:
Thank you for your letter of June 25 asking for our views on FCC reform. Our chairman, Bill Niskanen, asked me to respond, and I am happy to contribute. The discovery of the potential for competition in telecommunications means that telecommunications can become a market like any other market, governed by the general laws that apply to all businesses, and disciplined by competition. Ultimately, this would mean the elimination of the FCC, after a transition. But we are not there yet; I have confined my analysis to lesser changes.
Many reform proposals have been put forward that would streamline or modernize the FCC, such as folding the regulation of cable and DBS into the mass media bureau. I have analyzed proposals that would bring us significantly closer to recognizing market principles or restoring the rule of law in telecommunications. Also, I’ve focussed on mainly structural proposals. Ultimately, countless substantive reforms are essential. The next round of reforms might address, for example, the “public interest” standard more generally, the FCC’s control of content, whether to extend the FCC’s forbearance authority to mass media rules, spectrum reform, small business preferences, and many other issues. Structural changes will not alter the fact that the agency enjoys broad powers, and these powers are at the root of many problems that have arisen there.