Patricia F. Lewis
RTV 5702 -- Telecommunications Regulation
2 October 1995

An Analysis of "The Department of Communications: A Plan and Policy for the Abolition of the Federal Communications Commission,"
by Michael F. Starr and David J. Atkin
Hastings Communications and Entertainment Law Journal
12 (1989), 181 - 204.

In the article, "The Department of Communications: A Plan and Policy for the Abolition of the Federal Communications Commission," Michael F. Starr and David J. Atkin propose to abolish the Federal Communications Commission (FCC or "Commission") and replace it with a Cabinet-level Department of Communications. They assert that the previously valid rationales for the FCC no longer exist and that the charter given it in the 1934 Communications Act does not allow it to function as a proactive, policymaking body; instead, they say, the FCC is a reactive body incapable of effectively managing today's telecommunications and information industry. Starr and Atkin outline their proposal for the responsibilities and organization of the new Department and discuss the roles of the six entities that must work together to ensure the Department's acceptance and success.

Starr and Atkin attack the spectrum scarcity and public interest rationales for the FCC, charging that each has eroded to such an extent as to make the Commission obsolete. They argue that the Nation would be better served in the emerging competitive environment by a single organization that would perform both the long-term policy-planning activities of the National Telecommunications and Information Administration (NTIA) and the regulatory, "traffic cop" functions of the FCC. Additionally, the Department would be home to a new body, the Federal Communications Regulatory Commission (FCRC) which would perform the day-to day functions originally intended for the FCC (according to Starr and Atkin), such as licensing new facilities, approving renewal applications, and administering the Department's policies.

Starr and Atkin describe a "jaundiced status quo" in which the FCC is unable to manage the Nation's evolving telecommunications environment. They claim that "shortcomings in the FCC's decision-making ability have prompted the D.C. Circuit to overturn numerous FCC rulings" and that the "FCC's inability to handle policymaking was the incentive behind the creation of the White House Office of Telecommunications, now the NTIA." They lament the NTIA's position as merely an "in-house think tank" serving only the Executive Branch and stress the need to combine the day-to-day regulatory efforts of the FCC to the in-depth policy analysis of the NTIA.

Starr and Atkin contend that any new model would have to be easily implemented in terms of "cost, manpower, and supervisory resources" (administrative feasibility), have the support of both the executive and legislative branches of government (political feasibility), be consistent with the Constitution (legal feasibility), and promote the public interest (social desirability). They believe their proposal satisfies each of these criteria. They also identify the appropriate roles of six components of the telecommunications environment:

• The courts. Although scarcity as a rationale for regulation no longer holds the same weight as in previous years, the public interest rationale is still held as valid. Starr and Atkin believe the courts would be as likely to support a Cabinet-level Department to satisfy this need as it is to support the FCC in its current state.
• Citizens' groups. Citizens' groups have an important role to play in promoting the public interest and establishing regulation. Starr and Atkin believe that the setbacks these groups experienced at the hands of the FCC in the late 1980's will make them receptive to "an accountable Executive Department to which they can voice their concerns."
• The FCC. Although the FCC may oppose the creation of a new Department, staffers could be swayed if they were assured positions in the new Department.
• The Congress. A "wide range of opinions" would be expected from the Congress with respect to establishing a new Executive Department. For example, Congress can control the activities of the FCC by threatening budget cuts or refusing to confirm commissioners. Others, however, may prefer depoliticizing the telecommunications policy process. >The White House. Starr and Atkin wrote their article during the Bush Administration, believing Bush to be receptive to such a proposal because of its national importance. The Clinton Administration has taken a much more activist stance in this area and would probably be receptive as well.
• The telecommunications/information industry. Starr and Atkin believe that the "critical mass" of the industry would welcome the elevation of telecommunications to a Cabinet-level Department because it would mean a higher priority would be given to the issues affecting them and (most likely) result in an improved policymaking process.

At the beginning of their article, Starr and Atkin tie the need for public interest regulation to scarcity. They discuss at length the erosion of scarcity, citing numerous examples of court opinions to support their premise. Concerning public interest, however, they are vague, saying only that with the decrease in scarcity, the need for public interest regulation has decreased as well. Later, however, Starr and Atkin admit that "public interest rationales have not yet faced any serious legal challenges." The reader is left confused as to their precise belief on this issue. Also, if Starr and Atkin do believe that the rationales for the FCC have been overcome by technology, why do they recommend that an FCC-like arm of the Department of Communications be established?

Another shortcoming of this article was its lack of detail as to how the Department of Communications would be structured. They describe the entire body in two paragraphs, saying only that it would combine the functions of the FCC and the NTIA. Such a description would hardly be sufficient to convince any of the six key components they identify that their proposal would be an improvement over the status quo. The majority of their effort is spent citing cases which Starr and Atkin believe illustrate the ineffectiveness of the FCC.

Although their methodology in reaching their conclusions is somewhat flawed, Starr and Atkin recommend a far more plausible solution to the disjointed nature of our telecommunications policymaking process than other more recent proposals by the Progress and Freedom Foundation (PFF) and Congress.(1) These proposals would, to different degrees, deregulate the industry (allowing it to be "regulated" by the marketplace alone) and relegate policymaking to a small office within the Executive branch. Although the title of their article suggests that Starr and Atkin would agree with both the PFF and Congress, in fact, the opposite is true: they advocate combining presently existing entities and elevating the telecommunications policymaking process to a Cabinet-level department.

The author strongly agrees with Starr and Atkin that our Nation requires a more comprehensive and cohesive approach to telecommunications policymaking. Their proposal, while seemingly radical and deregulatory by the title of their article, is actually what the author believes to be evolutionary, that is, it recognizes the telecommunications industry as one of the most important to the economic and social well being of our Nation. Although the author does not agree with the reasoning used by Starr and Atkin for advocating change, she supports their overall recommendation as the next logical step in the evolution of the telecommunications and information industry regulatory environment.

1. Starr and Atkin are not alone in their desire to abolish the FCC. Recently, the PFF -- Newt Gringrich's preferred think tank -- and the Congress have each proposed plans to dismantle the FCC and move its functions to other, possibly new, organizations. The PFF began its assault on the FCC in 1994, in it's Magna Carta for the Information Age and continued that attack in The Telecom Revolution -- An American Opportunity, released this past May. The Congress also introduced legislation this year, H.R. 181, the Telecommunications Policy Coordination Act of 1995, which would establish an Office of Telecommunications Policy within the Executive Office of the President and an Advisory Committee on Telecommunications composed of telecommunications experts from the private sector. Additionally, both houses of Congress have passed their versions of the Department of Commerce (DOC) Dismantling Act of 1995 (S. 929 and H.R. 1756) which would terminate the DOC and eliminate all but the spectrum management functions of the NTIA.