That the Federal Communications Commission has been on a pronounced regulatory binge over the last few years is by now well-known. For example, last year in its notorious “net neutrality” proceeding, the Commission adopted new regulations governing the practices of Internet service providers. This year, the agency is conducting proceedings likely to lead to new regulation of business broadband services, a new “open standards” mandate governing TV set-top boxes, and new expanded privacy regulations.
While the FCC’s activist regulatory agenda may be well-known, less so is the way the agency commonly attempts to justify the need for the exercise of its regulatory power. In short, as I stated in a commentary, “The FCC’s Flawed Understanding of Competition,” just published by Real Clear Markets, the FCC’s competition analyses often narrow the scope of markets by excluding existing competitors, as well as potential competitors, from the assessments. Then, when competition assessments are skewed as a result of the narrowed market definitions, “it's easier for the Commission to argue that it must retain it traditional grip on regulatory power - even as, in reality, communications markets become more competitive, right before of our very eyes.”
Chairman Tom Wheeler often proclaims “Competition, Competition, Competition,” as his mantra. As I say in the commentary, for me, this calls to mind Abraham Lincoln’s statement that: "We all declare for liberty, but in using the same word we do not mean the same thing." Mr. Wheeler may declare for competition, but his understanding of what “competition” means is different than mine. His flawed understanding leads to over-regulation.
My Real Clear Markets commentary addresses two illustrative proceedings currently before the Commission in which the agency’s view of the extent of existing and potential marketplace competition is too constricted. At the end, I conclude: “You may be forgiven if you begin to think the FCC's competitive assessments are driven by a desire to maintain its long-standing grip on regulatory power, not to benefit consumers.”
Please take a look at the commentary for “the whole story”!