The FCC and Quasi–Common Carriage: A Case Study of Agency Survival

Abstract

In this article, we identify why, despite competition, falling prices, and expanding output in telecommunications and media, the Federal Communications Commission (FCC) will survive indefinitely and may expand its jurisdiction. A prominent theory after the deregulatory Telecommunications Act of 1996 was that the FCC would survive simply as a modest economic regulator of “bottlenecks.” While it is still too early to dismiss this theory completely, it failed to foresee some important changes in the FCC’s regulatory philosophy and strategy. Namely, the FCC and its defenders in recent years have successfully shifted the FCC from a mostly economic regulator to a mostly social regulator — a shift that is consistent with public choice theory. We also identify a resilient (if incoherent) theory of law — quasi–common carriage — that will keep the agency and its constituencies quite active going forward. This change in regulatory philosophy, which evolved over decades but became prominent in recent years as common carriage withered in the face of deregulatory pressures, will ensure agency survival for the foreseeable future.

Keywords: Telecommunications, FCC, Regulation, Media, Telecommunications Act of 1996, Common Carriage, Public Choice

JEL Classification: K230, L510, O38, H11