Where is the FCC's Annual Video Competition Report?
Barbara Esbin and I have just released a short PFF essay asking the question: "Where is the FCC's Annual Video Competition Report?" The FCC is required to produce this report annually and yet the last one is well over a year past due and the data is contains will be over two years old by the time it comes out. I've embedded our paper about this below.
Paul Davidson of the USA Today called me last week seeing comment for a story he said he was putting together on the legacy of Kevin Martin's FCC. I spent roughly 30 minutes on the phone with Davidson and went through a litany of policy issues with him itemizing the "assets and liabilities," if you will, of the Martin regime, as viewed from the perspective of someone who cares deeply about free markets and property rights. I did not hold back during the interview. I told Davidson in no uncertain terms that Chairman Martin had gone far off the free-market reservation on a great number policy issues.
Anyway, Davidson's story appeared today and is entitled "FCC Chief Martin Hasn't Lost Focus on Cable." It mentions how Chairman Martin has managed to alienate a good portion of the the free-market movement by straying far off the reservation on a great many issues, but it never really gets into the details. To get the complete story, I encourage you to read this editorial that James Gattuso and I penned for National Review as well as an editorial by the magazine's editorial board that appeared the following day entitled, "Pulling the Cable on Martin’s Crusade."
Well I think many of us here can appreciate Lawrence Lessig's call to "blow up the FCC," as he suggested in an interview with National Review this week. But I wonder, who, then, would be left to enforce his beloved net neutrality mandates and the media ownership rules he favors? He's advocated regulation on both those fronts, but it ain't gunna happen without some bureaucrats around to fill out the details and enforce all the red tape.
Regardless, I whole-hearted endorse his call for sweeping change. Here's what he told National Review:
One of the biggest targets of reform that we should be thinking about is how to blow up the FCC. The FCC was set up to protect business and to protect the dominant industries of communication at the time, and its history has been a history of protectionism — protecting the dominant industry against new forms of competition—and it continues to have that effect today. It becomes a sort of short circuit for lobbyists; you only have to convince a small number of commissioners, as opposed to convincing all of Congress. So I think there are a lot of places we have to think about radically changing the scope and footprint of government.
Amen, brother. If he's serious about this call, then I encourage Prof. Lessig to check out the "Digital Age Communications Act" project that over 50 respected, bipartisan economists and legal scholars penned together to start moving us down this path.
Does "the public" really communicate with the FCC?
Matt Lasar has put together a very entertaining article illustrating how "Faux Celebrity FCC Filings [are] on the Rise." What he's referring to is the fact that just about anyone can file comments with the FCC, even fake celebrities or dead historical figures.
The whole process has become a complete joke. Some of my research on the FCC's indecency complaint process has illustrated how one group--the Parents Television Council (PTC)--has essentially been able to stuff the complaint ballot box at the FCC by filing endless strings of computer-generated complaints from its website. The PTC then fires off letters to the FCC and Congress that essentially say, "Look! Millions of Americans out outraged by the content on TV and are clamoring for regulation!" In turn, that nonsense gets included in the congressional record when legislation is introduced, and politicians claim "the American people have spoken" and are overwhelming in favor of regulation.
It's all nonsense, of course, because the vast majority of those "complaints" were just the same PTC form letter. But the same games are at work in the debates over media ownership policy and Net neutrality regulation. Jerry Brito and Jerry Ellig have shown that, in the FCC's Net neutrality proceeding, "Close to 10,000 comments were submitted to the FCC, yet all but 143 were what the FCC calls "brief text comments," many of which were form letters generated at the behest of advocacy groups." The same thing is at work in the media ownership debate. A couple of radical anti-media activist groups stuff the ballot box with computer-generated complaints. And the Washington Post recently ran a piece raising questions about how the public filing process is potentially being abused in the XM-Sirius merger fight.
But Matt Laser documents how truly absurd this process has become when the likes of Paris Hilton, Donald Trump, Joseph Stalin, and even Jesus Christ end up submitting "comments" for the "public record." Here's some of the highlights from Lasar's writeup:
The big news this week in communications policy circles was the hullabaloo at the FCC over cable regulation. FCC Chairman Kevin Martin suffered a major setback in his attempt expand regulation of the video marketplace when he failed to get the votes he needed to impose new mandates on cable TV operators. Specifically, Chairman Martin was seeking to breath new life into an arcane provision of a 1984 law--the so-called "70/70" rule--that would have given him much greater regulatory authority over the day-to-day dealings of the cable market.
But the war certainly isn't over. The day after losing that skirmish, Chairman Martin made it clear he would be pursuing other forms of regulation for the cable sector, including an arbitrary 30% ownership cap on the reach of any cable operator. And the Chairman's crusade for a la carte mandates on cable will no doubt continue since it has been on his regulatory wish list for some time now, and many other groups support his efforts.
These cable TV regulatory proposals have always been fueled by the same two arguments: (1) cable TV operators have a stranglehold on market entry by new video providers and, (2) because of that, media diversity has suffered. For example, the New York Times editorial board opined this week that: "Twenty-five years ago, cable carriers promised to provide consumers with a wealth of new programming options. Today, the carriers and their packages of unwanted channels are obstacles to choice." This is the same logic that animates Chairman Martin's crusade against cable and the efforts of his pro-regulatory allies, most of whom are radical Leftist media critics.
As I mentioned yesterday, James Gattuso and I penned an editorial for National Review this week about the growth of FCC regulation and spending in recent years. In the op-ed, we also noted that, "For whatever reason, a disproportionate number of these [new regulatory proposals] have been aimed at cable television, so much so that press and industry analysts now speak of Chairman Martin’s ongoing 'war on cable.'"
Today, the editors at National Review have chimed in with an editorial of their own on the issue entitled, "Pulling the Cable on Martin’s Crusade." Specifically, the editors address what most pundits believe really motivates the Chairman's crusade against cable: His desire to force cable companies to offer consumers channels on "a la carte" basis in an effort to "clean up" cable TV. "Martin should abandon this particular crusade," the NR editors argue. "While we are sympathetic to parents’ desire to get the channels they want without having to buy access to racier fare, using economic regulation to restructure an industry is the wrong approach." They continue:
This is just a quick follow-up to the post I made earlier in which I mentioned the new editorial James Gattuso and I penned for National Review about the growth of FCC regulation and spending in recent years. A few people asked me where we got the numbers we used in the piece regarding the growth of the FCC's budget over time. Here are the relevant numbers and a graph charting that growth. The numbers can all be found in the the FCC's annual budget reports.
Next time some pro-regulatory advocate says that the agency is engaged in "radical deregulation" or something absurd like that, show them these numbers. There's still a whole lotta regulatin' going on over there!
Setting the Record Straight on Current FCC Policies
This week in National Review Online, Cesar Conda and Lawrence Spivak ran an editorial entitled “Kevin Martin’s Pro-Market FCC,” arguing that the current FCC has generally been deregulatory and free market-oriented. Today, James Gattuso of the Heritage Foundation and I have set the record straight regarding just how off-the-rails this current FCC has really gone…
______________________________________
November 29, 2007
TV Train Wreck Martin, markets, and the potential for regulatory disaster.
By James Gattuso & Adam Thierer
Like cops shooing away onlookers at the scene of an accident, Cesar Conda and Lawrence Spivak argue (“Kevin Martin’s Pro-Market FCC”) that there’s no reason for conservatives to be concerned about the Federal Communications Commission (FCC). Under Chairman Kevin Martin, they say, the FCC has been “characterized by a consistent pro-entry/pro-consumer welfare mandate, the very hallmark of economic conservatism.”
In other words: “Just move along. Nothing to see here.”
Despite Conda and Spivak’s exhortations, however, there is much for the curious crowd to see in the train wreck that is the FCC. The most recent derailment began earlier this month, when Martin leaked plans to invoke an obscure provision of the Communications Act, and to assert nearly unlimited powers to regulate cable television if more than 70 percent of households subscribe to cable.
Bruce Owen, one of the finest communications and media economists of our generation, has written a powerful piece for Cato's Regulation magazine asking, "After the long fight to end the 'common carrier,' why are we trying to resurrect it?" He's referring, of course, to the ongoing efforts by some to impose Net neutrality regulation on broadband networks. In his new article, "Antecedents to Net Neutrality," Owen points out that we've been down this path before, and with troubling results:
[T]he architects of the concept of net neutrality have invented nothing new. They have simply resurrected the traditional but uncommonly naïve “common carrier” solution to the threats they fear. By choosing new words to describe a solution already well understood by another name, the economic interests supporting net neutrality may mislead themselves and others into repeating a policy error much more likely to harm consumers than to promote competition and innovation.
Net neutrality policies could only be implemented through detailed price regulation, an approach that has generally failed, in the past, to improve consumer welfare relative to what might have been expected under an unregulated monopoly. Worse, regulatory agencies often settle into a well-established pattern of subservience to politically influential economic interests. Consumers, would-be entrants, and innovators are not likely to be among those influential groups. History thus counsels against adoption of most versions of net neutrality, at least in the absence of refractory monopoly power and strong evidence of anticompetitive behavior — extreme cases justifying dangerous, long-shot remedies.
By the time you read this blog, it's likely Pulver.com will have filed a petition with the FCC seeking to ensure that Internet video isn't regulated under Title III (broadcasting) or Title VI (cable) in the Communications Act. As Pulver's Jonathan Askin described it here at the VON Policy Summit in San Jose, it's the equivalent of the Pulver petition of a few years ago seeking protection for VoIP services from regulation. I haven't seen the new petition -- Jonathan said it would be filed at 9 am ET Tuesday -- but in general I am inclined to support less regulation rather than more. If Europe had such a policy in place, it wouldn't be able to consider an audio-visual directive that would impose broadcast-like regulations on the Internet.
That proposal, popularly known as TV Without Frontiers, was a topic of discussion on the panel I was on today. Ably moderated by 463 Communications' Sean Garrett, we touched on numerous issues, including the Viacom suit against Google, which dominated my recent panel discussion at South by Southwest. But this panel was far broader in scope. VON has traditionally been a conference about the Internet and voice, but this year they added the panel I was on to get a video perspective, and clearly Jeff Pulver and crew, the organizers of VON, believe video is the next VoIP.
