February 1, 2018

New FCC Office a Step Forward for Regulatory Reform

Patrick McLaughlin

Director of the Program for Economic Research on Regulation

Jonathan Nelson

Program Coordinator

The Federal Communications Commission (FCC) voted earlier this week to establish the Office of Economics and Analytics in an effort to bring benefit-cost analysis to an agency responsible for rules once deemed an “economics-free zone.” Assisted by FCC Chief Economist and Mercatus Center Senior Research Fellow Jerry Ellig, the office will help to conduct regulatory impact analysis for the agency. Conducting quality analysis does not guarantee better rulemaking, but is an important step in the right direction.

Why it matters:

  • The Office of Economics and Analytics will enable the FCC to conduct regulatory impact analysis. Quality regulatory analysis is a necessary—but not sufficient—component of quality rulemaking. Agencies cannot create rules that are in the public interest unless they know how the rules will affect the public.
  • The office will also allow the FCC to reevaluate rules already on the books. Rather than repealing rules ad hoc, agencies should carefully examine their current regulations and determine which ones are overly costly, duplicative, or no longer necessary.
  • The establishment of this office may motivate other independent agencies, such as the Consumer Financial Protection Bureau, to take similar actions. While independent agencies are not required by executive order to conduct quality regulatory impact analysis, they are capable of producing higher-quality analysis with the proper motivation.

FCC regulations by the numbers: The chart below shows the growth in regulatory restrictions created by the FCC since 1970.

 

Read more: The establishment of the Office of Economics and Analytics at the FCC is a good start toward better regulatory impact analysis. See below for more on how agencies can improve their analysis: