Reforming the FCC

Shakespeare famously wrote that “what’s past is prologue[.]”^[51] At the FCC, that might well be the case. Nonetheless, policymakers need not view it as inevitable that the agency will continue to use broken procedures. As scholars have emphasized, institutional strategies matter and “organizations can be structured to optimize the benefits and costs of expert decision-making.”^[52] Famously, after President Kennedy blundered in the management of the Bay of Pigs episode, which reflected poor planning and a lack of discussion of alternatives, he instituted a far more effective institutional process to manage the Cuban Missile Crisis.^[53]

For an example of how a regulatory agency can change in terms of its operating procedures, consider the case of the Civil Aeronautics Board (CAB). Historically, that agency’s operating procedures failed to spur deliberation and data-driven decision-making. Thus, after being appointed Chair of the agency, “[Alfred] Kahn criticized what he viewed as an intellectually bankrupt means of doing business-deciding issues in secret, without deliberation, and asking lawyers to develop the necessary justification for a pre-determined result.”^[54] Reflecting his commitment to transparency and open debate, he systematically changed how the agency operated, starting with a commitment to write orders in understandable prose. Ultimately, however, Kahn’s changes at the CAB were short-lived because the agency was dismantled in the 1980s pursuant to the Airline Deregulation Act.

At the Federal Trade Commission, strong leadership and a commitment to sound institutional practices overcame the legacy of an “erratic career” that left the agency vulnerable to mission creep and sailing adrift.^[55] In particular, over the last 25 years, the agency has “come back from the brink” and currently operates in an effective manner that has won accolades for its ability to be an effective political entrepreneur and regulator in the Internet age.^[56] Two successful recent FTC Chairs, Robert Pitofsky and Tim Muris, both were successful political entrepreneurs who effectively utilized strategic planning and a positive agenda to lead the agency, focusing on important opportunities, such as confronting the Internet as an important social and economic force as well as spearheading the enactment of the Do Not Call list regulations. In so doing, they ensured, as Tim Muris put it, that the agency was not merely a “passive observer, swept along by external developments and temporary exigencies.”^[57] The agency’s ability to implement such an agenda and re-establish its value to the nation underscored the wisdom of giving it a second chance to right itself in the midst of calls for it to be shut down on account of its flawed institutional processes and lack of clear-eyed and common sense priorities.^[58]

For a final example of how an agency can change, consider the case of Ofcom, the UK regulator of the communications industry. Prior to the establishment of Ofcom, observers complained that the operation of one of its predecessor agencies, the Independent Television Commission (ITC), paralleled in some ways how the FCC operates today. As one regulated entity noted:

[I]n terms of getting a fair hearing and in terms of being confident that the regulator has absolutely assessed the merits of the various competing cases, we think Ofcom plays a pretty straight bat, and that was not always the case in the past. At the ITC, there was a tendency for a decision to come out of nowhere and you would not have any forewarning, you would not even know it was an issue for consultation and suddenly it was not just a consultation, it was a decision.^[59]

By contrast to its legacy means of operation, Ofcom has established itself, in a relatively short period of time (it was founded in 2003), as an “evidence-led” regulator that is committed to the proposition that gathering evidence and making data-driven decisions is “part and parcel of effective regulation[.]”^[60]