Dixon Offers Five Principles to Guide Evaluations of Social Regulations
WASHINGTON D.C. - Current communications reform legislation lacks an overarching framework to guide policymakers in their pursuit of social goals through regulation, states Kyle Dixon in "Beginning to Limit 'Social' Regulation of Communications," a new Progress on Point released today by The Progress & Freedom Foundation. Dixon, PFF Senior Fellow and Director of the Federal Institute for Regulatory Law and Economics, suggests building on the Federal Communications Commission's forbearance and biennial review authority, directing the Commission "to evaluate and eliminate social obligations to the extent they no longer can be justified."
Dixon suggests in his piece that policymakers should be cautious when expanding social regulation in the communications industry. He warns that such regulation could have unintended consequences, such as discouraging investment, slowing innovation, or favoring large or incumbent companies. However, Dixon contends that social regulation could be closely monitored and evaluated if the FCC is guided by the following five principles:
- Revisit Interpretations of the Underlying Goals of Social Regulation
Regulators should re-examine the goals of regulation every two years. Specifying the goals clearly and comprehensively, as opposed to in vague terms, and analyzing where economic goals may overlap, will allow regulators to focus on the "big picture."
- Identify Trade-Offs Among Policy Goals
By specifying policy goals clearly and succinctly, regulators can identify competing goals and ensure a balance between the goals is purposely and conscientiously set.
- Reconsider Whether Mandates Are Necessary
At times, industry self-interest or private arrangements will negate the need for explicit mandates. Public declaration of policy goals by the FCC will often spur industry to react without regulation. The avoidance of mandates allows flexibility for the industry to achieve policy goals in a cost effective manner. Lack of mandates also prevents regulation from being implemented and enforced inconsistently.
- Formulate Specific Actions to Eliminate Unnecessary Rules
Policymakers must pay careful attention to facts and relationships in the communications market when crafting regulation, as opposed to regulating based on unproven assumptions about industry behavior. By crafting specific actions based on these facts, regulators can ensure their actions do not undermine competing objectives.
- Justify Implementation by FCC, as Opposed to Other Parts of the Government Technological advances and market forces result in a constantly changing communications industry landscape. In light of such changes, responsibilities currently allocated to the FCC and state utility commissions should be given a second look. It is possible that some functions, such as approving company mergers, could be handled more efficiently by other agencies.
Dixon suggests in his paper that the above five principles would greatly improve the FCC's forbearance and biennial review process and would permit flexibility and promote efficiency in social regulation. By applying these principles, Dixon concludes that policymakers would be inclined to view social regulation in an objective, clear framework, maximizing consumer benefits from rapidly improving communications technology while ensuring social goals are implemented efficiently.
The Progress & Freedom Foundation is a market-oriented think tank that studies the digital revolution and its implications for public policy. It is a 501(c)(3) research & educational organization.