Transformative Choices: a Review of 70 Years of Fcc Decisions

Publisher Marketing: This is a historical review of a series of pivotal decisions that helped shape today's communications landscape, including decisions by the FCC about the following: establishing commercial radio (by the Federal Radio Commission) in 1928; spectrum allocations and color standards for over-the air-television in 1945 and 1952; regulating cable television in 1966 and the early 1970s; authorizing customers in 1968 to attach equipment to their telephone lines; promoting direct broadcast satellites as a competitive alternative to cable television in 1982; letting the market decide the appropriate standards for digital cell phones in 1992; and adopting technical standards for high-definition and digital television in 1996 and 1997. Overall, these decisions have been among the most critical the Commission has faced, generally involving the appearance of a new technology, communications device, or service. In many cases, the decisions involve spectrum allocation or usage. These are "transformative" decisions in the sense that they required the Commission to decide whether to "adopt, with minor revisions, the same legal and regulatory framework and mode of organization, or fundamentally transform them?" Some of the decisions are sufficiently far back in the past that policymakers may not be fully aware or have forgotten what was decided. In addition, these particular historical decisions happen also to shed light on topical issues. The Commission's choices about radio in the 1920s and television in the 1950s have their echoes in current debates about media concentration, diversity, and localism. Competing demands for scarce spectrum resonate from the earliest days to the present. The Carterfone decision can be seen as a precursor to open Internet principles. All these are reasons to study this history, even though policymakers no doubt will draw their own conclusions, and may even disagree, about the lessons to be learned from studying the past decisions. From an academic perspective, too, these case studies offer an opportunity to examine a commonly-asserted view that regulatory policies throughout the economy underwent a major change in the 1970s, from protecting incumbents to promoting competition.2 Is that general view reflected in FCC policies? Two case studies are relevant on this point: (1) the Commission's efforts to protect incumbents are shown in the cable industry case study; and (2) the Commission's efforts to promote entry by a new entrant are explored in the DBS study. Finally, the case studies on digital cell phones and high-definition TV examine the Commission's role in setting technical standards, as well as the trade policy impact of these Commission decisions.