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January 26, 2017

Quantum Improvements at the FCC


It’s remarkable how much can change from a single election, which is a reminder that a presidential election is more than just the choice of a single person—it’s the choice of a team of thousands of professionals who will guide agencies and departments and actually implement the law. It’s also a reminder that the federal government has become too powerful and has too much influence over our lives and the economy, but that’s another ‘Byte for another day . . .

One place where the change is most distinct is at the Federal Communications Commission (FCC), where IPI has been railing against its hubris in ignoring data and pursuing ideological agendas rather than letting markets determine outcomes. With the change in the White House, out goes the most overreaching and arrogant FCC Chairman in memory, and in comes his opposite—Chairman Ajit Pai, who believes in staying within the law and within the FCC’s mandate, supports structural reforms of the FCC, trusts markets to determine outcomes, and will take appropriate steps to improve access to broadband in unserved and underserved areas. The change is going to be dramatic for the agency, and we couldn’t be more delighted. Ill-advised policies like the set-top box fiasco should evaporate with the changes at the agency.

Finishing the job of shaping the Commission includes filling two remaining commissioner slots, one of which goes to a Democrat and the other to a Republican. Most assume the Trump administration will reappoint Jessica Rosenworcel as the Democrat, but whoever is appointed will be part of a Democrat minority because the Commission is always weighted 3-2 in favor of the party in the White House.

So the bigger question is who ends up as the remaining Republican commissioner. There are a number of excellent free-market candidates, most of whom are DC telecom lawyers. But there is a very attractive nontraditional candidate—Senator Brandt Hershman of Indiana.

We at IPI have personal experience in working with Senator Hershman on major telecom deregulation in Indiana that was well-considered and effective. The Indiana reform became a template for other states, and resulted in an increase of $516 million in new investment and the creation of over 2,000 new jobs in just the first two years after reform.

Hershman is the current Senate majority leader in Indiana, and would bring a welcome, outside-the-Beltway perspective to the Commission. Too often, those who implement federal law and write regulations do so from an insular, DC perspective. It would be very beneficial to add a state perspective to the FCC, and Hershman would be an excellent choice.

The lesson from the recent experience with the FCC is clear: The agency must be legislatively restructured to prevent future abuse of the agency’s power. Otherwise, the communications industry will be constantly buffeted with regulatory changes resulting from the pendulum swings of future elections. The time is now.


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