As exercises in bureaucratic hairsplitting go, it is tough to beat the sheer audacity of Federal Communications Commission Chairman Julius Genachowski's recent declaration, "I've been clear repeatedly that we're not going to regulate the Internet." In reality, between its recently released National Broadband Plan and proposed Net neutrality guidelines, that's exactly what the agency is planning to do.
The FCC doesn't have clear legal authority to regulate the Internet—in court filings, it has relied on the dubious concept of "ancillary jurisdiction," so it's not surprising that Mr. Genachowski doesn't want to be seen as the No. 1 Net Nanny. And it is telling that not even the head of the FCC wants to court the public perception that Washington is sending bureaucrats to meddle in the nation's communication networks. Indeed, Mr. Genachowski has inadvertently raised the issue of his agency's fundamental value, or lack thereof. Step back, and the real question isn't whether the agency has the authority to regulate the Internet—it's why the FCC has authority to regulate anything.
Forget the agency's $338 million price tag for a moment and ask, "What does the FCC do?" Its task is to oversee the nation's communications infrastructure—which, these days, means everything from TV and radio to wireless phones and Internet connections. But how many of these tasks constitute core government functions? From nagging the Net to regulating broadcast speech, just about everything the FCC does is either onerous or ineffective. Either way, it's unnecessary.
Take its role as broadcast censor: The agency has spent years enforcing an arbitrary, inscrutable code governing what speech and images are acceptable. Are four-letter words forbidden or not? Which ones? And when? What about breasts or bottoms or lower backs? Does it matter if the context is medical, accidental, or unattractive? The FCC's answer to all of those questions is yes, no, maybe, or all three, depending on whether the words and pictures in question meet its definition of indecency. But that test is performed using guidelines that are clear as mud: "An average person, applying contemporary community standards, must find that the material as a whole appeals to the prurient interest." Who counts as an average person? And how is one to determine current community standards in a country that contains both the joyous vulgarity of downtown Manhattan and the quiet piety of Pennsylvania's Quaker communities? The answer, unfortunately, is that these judgments are left to the FCC's whim.
But its rules are not only capricious, they are of dubious constitutionality. The Supreme Court ruled in a 5-4 decision last year that the FCC has the power to fine broadcasters for so-called "fleeting expletives"—expletives used as exclamations on live TV, for example. But the court did not definitively settle the First Amendment implications of allowing a federal agency to censor broadcasts. The judgment here should be a no-brainer, and one upon which liberals, libertarians and conservatives can all agree: When it comes to speech, Washington should have no power to decide what is, or is not, permissible.
The FCC's entire approach is to rule by impulse and expand its reach whenever and wherever possible. Recent FCC actions include investigating the approval process Apple employs in its iPhone App Store, mulling whether and how phone companies might upgrade their networks and passing judgment on various consumer devices of minimal likely importance, such as the Palm Pixi.
When the FCC was launched in 1934, backers argued that airwave scarcity justified its existence. In an age of information overload, with a nearly infinite array of media choices available to anyone with a mobile phone or broadband connection, no such argument can be made. Yet rather than shrinking, the FCC has ballooned, growing its budget by more than 60 percent between 1999 and 2009.
If something exists anywhere near the realm of technology or communications, the FCC tries to make it its business. But to what end? And at what cost? A 2005 study by economist Jerry Ellig estimated FCC regulations cost consumers up to $105 billion a year in additional costs and missed services. Throw in its own $338 million budget, and it is time to pull the plug on the FCC.