Arnold Kling  

FCC Policy Issues

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In the age of the Internet, the FCC has become a pivotal regulatory body, as I pointed out in The Economics of the Wireless Last Mile. In a new essay, I argue that


In the United States today, companies that license spectrum are like Third-World squatters. They do not have clear title to their spectrum, so that any attempt they make to innovate must run the gauntlet of the Federal Communication Commission's regulatory process. As a result, spectrum in the United States is "dead capital." Call it dead air.

Note that there will be a conference on spectrum policy on March 1st and 2nd. A Web broadcast is promised.

Finally, the FCC also was in the news this week when it voted to retain state and local regulation of wholesale rates for local telephone service. My reaction to the ruling was somewhat cynical.


it makes lots of work for lawyers, lobbyists, and local officials, with abundant opportunities to corrupt the process. It stimulates a revolving door (or revolving trough) for influence-peddling Suits, as they go from government to the semi-private sector and consulting.

For Discussion. The FCC's Spectrum Policy Task Force says that the appropriate regulatory regime for spectrum depends on the level of transactions costs. The report argues that if transactions costs are high, then markets will not be efficient, and the private sector will not allocate spectrum efficiently. Is this a good argument for continuing to regulate spectrum?


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