Fruits: Broadcasting Rules Would Never Be Applied to a New Technology
The regulatory structure that governs broadcasting “is an anachronism” and wouldn’t exist if it were a new technology introduced today, wrote Eric Fruits, a senior scholar for the International Center for Law & Economics, in a post Thursday for Truth on the Market. An emerging technology today wouldn't be subject to rules like retransmission consent, ownership caps and the public interest standard, he said. “The idea that a panel of three to five presidentially appointed FCC commissioners in Washington can better determine the ‘public interest’ than the public itself -- through its viewing choices in a competitive market -- is a relic of progressive-era central planning,” Fruits said. “In reality, the vague standard invites regulatory capture and rent seeking, where politically connected groups lobby the FCC to define the public interest in ways that benefit them, rather than the public at-large.”
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Broadcasting should be treated like other technology, with broadcasters required to acquire spectrum in competitive auctions and reach voluntary contracts with distributors, Fruits said. “The proper tool to address concerns about excessive market concentration is not industry-specific ownership caps, but general antitrust law.” If local news “is deemed a public good that the market underproduces, the economically efficient solution is a direct and transparent subsidy,” he wrote. “The current regulatory framework shackles broadcasters to a 20th-century business model and prevents them from adapting to a 21st-century competitive environment.”