As you might expect, The Political Spectrum focuses on government spectrum
policy in particular, and the impact of "natural" government regulation in
general. The following excerpts discuss FCC Chairman Newton Minnow's tenure,
and his well publicized "Vast Wasteland" speech at the 1961 NAB Conference.
Some of these excerpts are out of order to make my main points.
This paragraph says volumes about what happens when Congress does not define
ambiguous terms, like "the public interest," or in the present, "Net
Neutrality."
In the political spectrum, perverse regulatory consequences mean never having
to say you’re sorry. In Abandoned in the Wasteland (1995), Minow continued to
condemn television for mindless content, laying the blame on the 1934
Communications Act. “Because the act did not define what the public interest
meant, Congress, the courts, and the FCC have spent sixty frustrating years
struggling to figure it out.”
In the 1950s, the federal government had seen no reason to be concerned about
TV programs sent via wires—“ community antenna television” (CATV), or
“cable.” The product was local, not interstate, and was not delivered to
customers via radio spectrum. In a 1959 report, the Commission concluded it
had no reason—or authority—to regulate. Cable slowly made inroads. At first,
operators wired areas where households were unable to receive over-the-air TV
signals. Extending Philadelphia TV programs to viewers in Allentown,
Pennsylvania, enhanced stations’ audiences. Broadcasters had no objection,
and neither did the FCC.
This was war. Incumbent broadcast licensees launched volleys of lobbyists.
The chairman who had roared in Las Vegas, lecturing industry leaders for
their shoddy product, was now more receptive to their interests. In a
“startling reversal,” as economists Stan Besen and Robert Crandall put it,
the Commission repudiated its policy of benign neglect toward cable and
aggressively intervened on the triopoly’s behalf.
The FCC could not openly state that it acted from naked protectionism. It
needed a “public interest” justification. Alas, these are manufactured
domestically. So in 1962 and in a string of orders in 1965, 1966, 1968, and
1970, the FCC opined about the benefits of suppressing cable television. The
argument began with a market prediction. Cable TV would never compete as a
national distribution platform, and could do no more than supplement
broadcast TV here and there. Over-the-air stations would inevitably remain
Americans’ primary means of accessing news and public affairs. Allowing cable
systems to “siphon” their audiences could threaten stations’ financial
viability, causing some stations to go dark and leaving the public less
informed. The Commission actively precluded this dire outcome by nipping
rivals in the bud.
The FCC found many reasons why cable should not compete with broadcast—to
protect localism, diversity of expression, and public affairs programming, as
well as to enhance competition from fledgling UHF stations against the
stronger VHF stations. On each of these asserted “public interests,” the FCC
was wrong. The benefits claimed for the licensing system were fiction. Policy
makers later discovered that the “public interest” lay in reversing the
anticable policy. In the deregulation wave of the Ford and Carter years,
buttressed by a newly skeptical D.C. Court of Appeals, a reform-minded
Commission stripped away protectionist barriers. By 1980 America was being
wired for video competition. News and public affairs programs, touted as the
heart of the “public interest” in broadcast regulation, were minuscule in the
wasteland. In the early 1960s the three broadcast TV networks programmed just
fifteen minutes of news per day. As late as 1973, CBS aired just ninety-two
hours of news programs for the entire year. The conventional wisdom was that
the American viewer simply was not interested in news or documentaries.
“The FCC objective in the early 60’ s, to expand choice, has been
fulfilled—beyond all expectations.” To which law professors Thomas
Krattenmaker and Lucas A. Powe, Jr. responded: “No kidding.” Citing the
emergence of CNN, C-SPAN, C-SPAN2, Discovery, the Learning Channel, MTV,
Nickelodeon, A& E, Bravo, AMC, religious programming, BET, and Univision,
they concluded, “Everything that anyone wanted in the 1960s . . . is
available at the flip of a switch.”
Minow claimed credit. His FCC, he said, had rescued UHF TV stations from
oblivion by lobbying Congress to pass the All-Channel Receiver Act of 1962
and then working with the Kennedy administration to launch satellite
communications. The fiftieth anniversary of the “vast wasteland” speech was
yet another forum for such assertions, and journalists eagerly repeated
Minow’s boasts.
In fact, the FCC—under Minow and for years afterward—did not promote cable
but aggressively moved to block it. The All-Channel Receiver Act did not
produce net benefits for consumers and did not rescue UHF. Only after cable
deregulation reversed Minow’s policies in the late 1970s and early 1980s was
a fourth broadcast network, Fox, able to form, in 1986. That was precisely
because so many UHF stations were made viable via cable retransmission. The
Spanish-language services Univision and Telemundo also became successful
national networks as cable, unleashed, delivered new life for UHF.
Here lurks a template for the creation of communications policy. Government
identifies a problem and takes measures to address it. The market failure is
misdiagnosed, and the regulatory “fix” reflects political bargains with
powerful industry incumbents. Barriers to entry are created. The “public
interest” is asserted. When the purported solution is finally abandoned, more
robust market forces assert themselves. The government proudly claims that
its policy was a success. The cycle repeats.
