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Fed Regs Outline - Telecommunications Law I Regulation of...

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Telecommunications Law I. Regulation of Broadcasting     The Fundamental Tension of Broadcasting Regulation: (1) Broadcasts can’t be censored. (2) Broadcasts must be in the public interest. -Almost all the thorny issues of broadcasting rights is a product of these two goals coming into conflict with each other. A. History of Broadcasting & FCC -FCC developed as a necessity; radio traffic interference, lack of any standards were causing problems with overlapping signals. -Sinking of the Titanic: the inability of people to hear the distress signals because of the signal interference became the catalyst for the initial move to regulation -Radio business owners were the loudest in complaints that something needed to be done Radio Act of 1927 -Congress’ response to the need for regulation: creation of the Federal Radio Commission -Senate wanted an independent agency, House wanted a new post in the Cabinet. Compromise created a 5-member commission, politically appointed to carve up the spectrum -Spectrum was allocated initially EXACTLY the way the big-business broadcasters wanted: broadcasting claims judged on market success standard, i.e. the bigger you were, the more likely you’d get a license MOST IMPORTANT: From the very beginning, radio spectrum was seen as too important a resource, and radio too powerful a medium for communication to allow unfettered ownership of it. B. Justifications for Regulation: Policy Considerations Traditional government justifications for regulation: Scarcity :  There’s only so much spectrum in the universe. Public Good :   Bandwidth belongs not to any citizen, but to all citizens. Peculiarities :  Bandwidth is not a physical thing.  It is difficult to visualize, hard to  delineate the borders, and it was difficult to conceptualize by people from the  very birth of the technology. The Peculiarities of Spectrum: Page 1 of 28
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-Spectrum is hard to identify: it is not readily visible, and was not fully understood when radio technology was first being developed -Regulation provided a method for understanding and control of this new resource THEREFORE : regulation is necessary in order to help people understand and utilize the resource being regulated (regulation restricts AND encourages use by adding incentives). Spectrum as a Public Good: -A public good is defined as something where the cost to provide the good to one more person is zero. -A radio broadcast, then, qualifies: once the broadcast begins, it costs the broadcaster absolutely nothing to add one more listener. Key to Broadcast Economics: Outlay Costs = High Marginal Costs = Zero -Because spectrum is a public good, it must be doled out according to the public interest.
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