I’ve had to work with the FCC for a long time, at least a couple of decades, perhaps more. My previous job was to design systems to support Telecommunications Relay Service (TRS,) a federal mandate to the states to provide telephone communication for the Deaf and Hard of Hearing. The states would make contracts with my employer to provide this service. At it’s high point a few years ago, we had contracts with over thirty states and at least one foreign government.
From time to time, every other year it seemed, the FCC would propose enhancements to the basic service. The FCC drew its authority from the Americans with Disabilities Act (ADA.) Most of the time, the FCC listened to providers. We listened to the FCC carefully. You see, the FCC also regulated our reimbursement for handling long distance calls. When the FCC dictated a few service or technology, we would examine and forecast costs and continuing expenses with a fine toothed comb. We needed to make sure our added expense and cost still provided a measure of profit given the fixed reimbursement rate from the FCC. It was my job to design the support systems and to determine the costs to provide these new services. In the process I was awarded six patents for innovative designs to provide the TRS services.
The question was, why did the FCC have to be involved when the original mandate was to the states? The states were forced by the feds to pass enabling legislation to comply with the ADA. How did the FCC come to be involved in a purely social requirement? The immediate response was because the service was from a telecommunications carrier.
In reality, FCC oversight wasn’t needed, nor required. The original mandate was to the states, not to the telecommunications carriers like AT&T, Sprint, Verizon and a few others. The states would issue Requests for Proposals and in turn would negotiate a contract with a TRS provider. The FCC got it’s nose into the tent because one of the basic services was to provide interstate long distance calling for the deaf.
It would be more prudent, perhaps, if the service was regulated by the ICC like trucking companies, IF any federal oversight was required at all. You see, the carriers were already regulated as part of their normal business. We, the TRS providers were being “double-dipped”, so to speak, by the FCC. First because we were a communications carrier and second because we were also a TRS provider.
There was no need for the FCC to be involved at all. The services to be provided was covered in the contract between the state and the provider. What benefits did the FCC provide?
None. Except to increase the overall cost of the service. And who paid for this? The people of the states. If you look closely at your next phone bill. You’ll probably see a line item for TRS. Usually this is a tax for every phone line and/or for every call you make. In a few cases it’s a flat charge added to your bill because you have a phone.
I’ve often wondered how much the cost could have been reduced if we didn’t have to jump through the FCCs hoops. You see the FCC was created during that great social failure known as the New Deal in the 1930s specifically to constrain the growth of AT&T. The social engineers at the time feared AT&T would become a monopoly.
The FCC, for all practical purposes, killed competition and gave AT&T a virtual monopoly for phone service. It wasn’t until the 1980s that AT&T’s monopoly, created in part by the FCc, was broken up and AT&Twas forced to divest itself of the local exchange carriers like Southwestern Bell, Bell South, PacBell and others. The FCC finally performed its original mission—fifty years late. It finally allowed competition to emerge—like Sprint in the 1980s and more recently cable TV providers.
However, we’ve come full circle. Almost all of the local exchange providers have again been reabsorbed into a single company called—AT&T! So, what benefits did we ever get from the FCC? They’ve failed to perform their original purpose.
I propose that the FCC having failed to meet its original purpose, regardless whether that purpose was needed in the first place, has no mission and should be abolished as obsolete and a waste of taxpayer money. Others agree with me. Here’s an editorial from the Investor’s Business Daily that provides some additional information.
Regulatory State: Two days after the FCC voted to take over the Internet, it stands in the way of an agreement between private companies. This is an agency that should be targeted for elimination.On Tuesday, the Federal Communications Commission approved net neutrality, a regulatory framework that has been sold as a means of keeping the Web fair and open. In truth, the rules give government the authority to tell Internet service providers how to organize the traffic that flows over their infrastructure.That’s enough meddling in private affairs for one week for any federal agency. But the FCC wasn’t finished.Chairman Julius Genachowski, who pushed net neutrality despite a court ruling and bipartisan opposition in Congress, set conditions Thursday on Comcast’s acquisition of NBC Universal. He wants Comcast to distribute content in a way that he approves of and lets competitors access Comcast’s platform.It’s almost amusing that these conditions are being applied in the name of the “public interest.”Genachowski’s proposal isn’t binding. He still has to present his ideas to the other four commissioners and a vote must be taken. But neither one man nor one group should have the power to marshal private companies’ business operations.Private media companies are not government-owned utilities.Regulators such as Genachowski say they are merely trying to keep competition healthy and protect consumers.But their efforts inhibit competition and obstruct innovation.Cell phones, for instance, were delayed by the FCC for a decade. The cost of this hang-up to the economy, according to the National Economic Research Associates, was $85 billion.Like generals fighting the last war, regulators make rules based on the way businesses operated yesterday. As they try to keep up with market dynamics, they inflict uncertainty into business decisions and put a boot on the neck of progress. When not held back by regulators, though, companies freely create new technologies and business models that increase competition.What role, then, is there for regulators, especially those at the FCC, which oversees one of the most dynamic industries in the world? With the intense competition in telecommunications that has benefited consumers and led to wide commercial successes, there’s no need for a government referee in this sector.There’s nothing the FCC does that can’t be eliminated, streamlined or handed over to another agency or department that has a legitimate function. (Ed Morrissey of hotair.com suggests broadcast licenses “could be handled by the Commerce Department, or by a greatly reduced FCC with binding limitations on jurisdiction.” The point is, the FCC as now constituted doesn’t have to do it.)The FCC has been around for a while — it was established by the Communications Act of 1934. So it won’t be abolished overnight. But its elimination is a worthy goal.