"Any member of Congress who thinks that communications law should be rewritten should first read A Tough Act to Follow."
—Hon. Thomas J. Bliley Jr., former chairman, House Committee on Commerce
"For anyone who has ever wondered why some government agencies are impervious to public criticism, Harold Furchtgott-Roth has the answer. In a cynical mercenary field, telecommunications, Furchtgott-Roth stands out as an honest broker. Read Harold."
—Amity Shlaes, syndicated columnist
"Harold Furchtgott-Roth was an active participant in the policy debate and political compromises that led to enactment of the Telecommunications Act of 1996, which promised to substitute healthy market competition for the anticonsumer maze of laws and regulations that preceded it. His analysis of the sad failure of the new law to bring needed reforms is a useful lesson in the difficulties that attend efforts to make regulated industries more responsive to consumer interests."
—Bruce M. Owen, Morris M. Doyle Centennial Professor in Public Policy and Director, Public Policy Program, School of Humanities and Sciences, Stanford University, and Gordon Cain Senior Fellow, Stanford Institute for Economic Policy Research
"This book evaluates the FCC’s successes and failures in implementing watershed legislation to deregulate the telecommunications industry. Harold Furchtgott-Roth’s intellectual rigor and real-world experience in government deliver stunning insights into the interplay of politics, economics, and law in the modern regulatory state. This book is required reading for any student of administrative law, public choice, and the regulation of industry."
—J. Gregory Sidak, visiting professor of law, Georgetown University
Acknowledgments
Introduction
The Natural Experiment of the Telecommunications Act of 1996
Structure of the Book
1. Separation of Powers and Dashed Expectations
History of the Separation of Powers
The Other Benefits of Separation of Powers
The Rule of Law
Reinforcement of Democratic Institutions
The Efficiency of Governmental Services
Isolated Agencies without Separation of Powers
A Charmed Life
Separation of Powers Matters, Even in Isolated Agencies
2. The Ancestry of the FCC
Expansive Power under the Communications Act of 1934
Concentration of Powers and the FCC
The FCC Evolves over Time
Congress Considers Revising the Communications Act of 1934
The Consent Decree Problem
The Unending Bureaucracy Problem
The Technology Retardation Problem
The Antitrust Problem
The False Scarcity Problem
The Cost-Accounting Problem
The Cable Problem
The “Public Interest” Problem
Subtle Problems
3. The Telecommunications Act of 1996
Solutions
February 8, 1996
A Triumph of Individuals over Government
August 8, 1996
No Branch of Government to Discipline the FCC
The Bubble Bursts
Causes of Boom and Bust
Benign Explanations
Bad Behavior
Bad Implementation of a Law
The Core of the Problem
4. The Courts and the Administration Will Not Discipline the FCC
The Supreme Court Holds That Congress, Not Courts, Must Discipline the FCC
Iowa Utilities Board Sanctions FCC Discretion as Residual from the Communications
Act of 1934
Chevron Deference Reinforces Combined Powers of
Government
Despite the Courts, the FCC Limits Speech
The Administration Will Not Interfere with the FCC
The FCC Is Left Alone to Divine Congressional Intent
5. Congress Will Not Discipline the FCC
Congress Is Ill-Equipped to Discipline the FCC
Congress Has Limited Means to Ensure That Its Intent Is Carried Out
The FCC Provides Plausible Deniability to Congress
The FCC Cannot Discipline Itself
6. Individuals Do Not or Cannot Discipline the FCC
Problems Associated with Insulation from the Public
Unresponsiveness to Citizen Concerns
A Hidden Tax
Merger Reviews
The Exception That Proves the Rule
Combined Powers Make Individuals Reluctant to Take Disputes to the FCC
7. Sloppy Rulemaking
Rules That Kept Power at the FCC for Enforcement and Adjudication
A History of Written and Unwritten Rules Facilitates Sloppiness
The “Public Interest” as Authority
Hidden Taxes
A Poor Track Record in Court Has Done Little to Improve Rulemaking
Consequential Costs for Both Businesses and Consumers
Combination of Powers and Sloppy Rules
8. Unpredictable FCC Rules and Communications Law
Uncertainty and Delays from Sloppy Rules
Uncertainty of Enforcement
Uncertainty of Adjudication
Loss of Valuable Time
The Costs of Negotiations and Settlements as a Result of Uncertainty
9. An Appearance of Discriminatory Treatmeant by the FCC
Discriminatory Enforcement
Methods of Detection
Standards of Enforcement
Discriminatory Adjudicatory Proceedings
Merger Review Activities at the FCC
BOC Section 271 Reviews
Waivers
The CALLS Proceeding
10. The Mirarcle of Compound Interests
Auctions
Peculiar Financing
The C Block
A New FCC—Where There’s a Will There Must Be a Way
The Market Turns
Eureka!
Regulatory vs. Fiduciary
Collateral Damage
Re-auction
The D.C. Circuit Court Opinion
Welcome to the Sausage Factory
The Market Collapses Again
Conclusion
Results of the Natural Experiment
A Cautionary Tale
Failure to Separate Powers
How to Improve the Situation
Appendix
Notes
Index
About the Author
