April 7, 2017
Spring is traditionally the time for cleaning out drawers and closets, putting away the old and welcoming in the new. This year the Federal Communications Commission is planning to do a bit of its own spring cleaning – and we like what we’re hearing.
On Wednesday, FCC Chairman Ajit Pai announced plans to make economic analysis the foundation for future rulemakings and other actions at the agency – a welcome change after years of eschewing meaningful cost benefit analysis in favor of expediency (or maybe as a way to avoid making hard choices about popular but unjustifiably costly regulations). “Increasingly during FCC proceedings, [economists’ views] have become an afterthought, not an initial thought,” he said. “I want to create a culture of economists at the FCC that supports big-picture thinking once again.”
It’s about time. Maybe he was inspired by the President’s March 13 Executive Order directing agencies to find ways to reorganize to improve their “efficiency, effectiveness, and accountability.” Or maybe, even without that prompting, the reality of overturned court decisions and investment-killing regulatory outcomes made this act of self-reflection inevitable. Either way, this is a welcomed first step toward realigning the FCC to better keep up with the pace of innovation in the technologies it oversees.
By creating a new “Office of Economics and Data,” Chairman Pai meets the challenge of regulating in the 21st Century head-on. For one, the fast-paced American economy demands that providers modernize how they do business to keep pace with the titanic shifts in the information economy over the last few years. Voice, wireless, and video companies have converged to form multi-media one-stop-shops for their consumer and businesses customers. For example, cable companies are offering wireless service and wireless companies are offering video, freely competing in each other’s traditional marketplaces to the benefit of consumers. Such convergence creates a pro-growth and pro-jobs environment.
The FCC likewise should modernize to become more efficient through reorganization and elimination of functions that fall squarely within the core missions of other agencies – like consumer protection and cybersecurity – although achieving maximum efficiency may require legislative changes. Just as economic analysis should cut across services and bureaus to reflect how companies are offering consumers the services they want, the stage is set for bold initiatives like getting rid of legacy silos that group and regulate providers by the kind of service they have traditionally offered, and “converging” the policy and rulemaking functions that support competition into one Competition Bureau.
During his Wednesday speech, Chairman Pai pointed out that these rigid silos inside the agency have led to inefficiencies and hurt worker productivity. Getting the right structure in place now will allow the FCC to meet the challenge of overseeing modern networks and technologies as they continue to evolve, and will put the FCC in a better position for years to come to protect consumers and encourage competition in the increasingly converged communications marketplace. An Office of Economics and Data would be a good thing. We hope there’s more to come.