Let’s cut the cord on federal funding for NPR and PBS

By Brian A. Rankin of CEI.

"They are products of a media landscape that no longer exists.

The Corporation for Public Broadcasting (CPB) was born through the Public Broadcasting Act of 1967. CPB was created as a private, non-profit organization to receive and manage federal government funding. Among its purposes are to “facilitate the full development of public telecommunications” and maintain a “strict adherence to objectivity and balance in all programs” of a controversial nature.

NPR and PBS followed shortly thereafter, at a time when there were far fewer media outlets than today and choices for news, information, and educational programming were much more limited.

Yet almost 60 years after CPB’s birth and despite tremendous changes in the media landscape, public media continues to receive substantial federal funding. CPB’s 2024 federal appropriation was $525 million and is $535 million for 2025.

Public media is a system of independently operated local public radio and television stations, and CPB directs federal funding to those affiliates. Government funding represents roughly 10 percent of local affiliate revenue so they also have other funding sources (as anyone who has sat through a pledge drive can tell you).

But the receipt of federal funding brings limitations. Section 399b of the Communications Act forbids NPR and PBS affiliates from running commercial advertising. They are permitted to air acknowledgments (e.g., “American Experience is brought to you by The Ford Motor Company”), but not actual ads.

FCC Chair Brendan Carr recently directed the FCC’s Enforcement Bureau to investigate whether NPR and PBS affiliates are unlawfully running commercial advertising. Whatever the motivation for the investigation, the Chair’s letter also raises a different, fundamental question: Why does CPB continue to receive an over half a billion-dollar federal appropriation?

The timing for this question is ripe. The national debt stands at $36 trillion and it grows every day. Well publicized efforts to reduce the government’s size are underway and spending is under scrutiny. The need for the efficient allocation and prioritization of federal funds is clear.

Further, with cord cutting, streaming, podcasting, and other platforms, the CPB appropriation funds legacy media, now only one of many different sources for news, information, and educational programming. The government is funding 1967-inspired media in a YouTube era.

Given these realities, NPR and PBS affiliates should move to a market-based model. The law should be changed to discontinue federal funding, winding it down over a period of years to provide a financial transition, particularly for rural affiliates for whom federal dollars represent a larger share of their overall funding. NPR and PBS affiliates should also be allowed to carry commercial advertising to earn revenue.

If there is a market for NPR’s and PBS’s programming, their affiliates should be able to attract commercial advertising, raise revenue, and survive like any other media outlet. If there is an insufficient market for their programming, the affiliates will need to adjust their programming or do whatever is needed to succeed. In either case, they will succeed or fail based on the market for what they offer and their ability to grow their audiences, just as commercial radio, television, and other platforms do today.

Both NPR and PBS have a history of award-winning programming and well established brands and audiences, so they have the potential to succeed without federal funding. In fact, moving away from the limits that come with federal funding will create the freedom to further diversify revenues and compete in a fast-changing media landscape without being tethered to the federal government.

Cutting the cord on federal funding will mean change for public media, but it will recognize today’s fiscal realities and diverse media landscape."

Stop Panicking Over Teens and Social Media

Modern life is digital. Adults need to help young people navigate the costs and benefits, not launch bans and hope for the best

By Lucy Foulkes. She is a research psychologist at the University of Oxford. She is the author of “Losing Our Minds: The Challenge of Defining Mental Illness” and “Coming of Age: How Adolescence Shapes Us.” Excerpts:

"many other academics argue that the studies and results that Haidt presents are not strong enough to support his conclusions, that there are other possible explanations for the rise in depression and anxiety among teens. In fact, most researchers in this area have reached a counterintuitive consensus: the relationship between social-media use and young people’s mental health is weak, on average, and sometimes nonexistent."

"the psychological impact of social media is hardly clear-cut."

"How social media affects a young person depends on a range of factors, including their personality, their friends, their mood, their real-world experiences and the technology itself"

"one 2021 study of 387 Dutch adolescents in the journal Communication Research found that 45% reported no change in well-being immediately after using social media, 28% noted a decline and 26% expressed a rise. Some young users observed that social media makes them feel anxious or left out, or that they see inappropriate and distressing content. But participants also said social media helps them feel more connected with their friends and themselves, that it offers outlets for creativity and an antidote to loneliness. 

A review of 36 studies examining how young people engage with friends online, published in the journal Adolescent Research Review in 2017, found that all the core qualities of face-to-face friendships, such as validating feelings, offering emotional support and having fun, play out virtually, too. “Rather than reducing intimacy in friendships,” the authors wrote, “technology-mediated communication may provide the same benefits to teens as interactions that occur face-to-face.”

"In a 2024 study in the journal Social Media + Society, teenagers in focus groups explained that they look to social media for connection, entertainment, inspiration and information. The effect of these experiences proved mixed. Some said they felt more connected with friends, others felt lonelier"

"Some said they sometimes had positive and negative feelings at the same time."

"These motley effects mean that sledgehammer solutions, such as total bans, won’t reliably improve young people’s mental health."

"beyond regulatory guardrails and technical tools, rules for social media use, and at what age they are gradually eased, should be left to families and schools."

"Young people are experts in getting around the rules. When China imposed strict controls on online gaming in 2019, young people signed in with the names of older relatives or friends, used photos of other people to trick facial-recognition software and bought accounts through the black market"

"banning this technology for everyone under 16 isn’t the solution, not least because these sites are so well embedded in popular culture."

Should AM radios be mandated in cars?

By Tyler Cowen.

"No. Here is my Bloomberg column to that effect, excerpt:

Personally, I prefer to listen to XM satellite radio, a paid subscription service. It features channels that appeal to my specific tastes (in this case, if you’re asking, the Beatles, classical music and various Spanish-language programs). AM radio, which is usually advertiser-supported, tends to have more of a “least common denominator” flavor, as it must attract many listeners to pull in the ad revenue. I do not think the federal government should be using the force of law to favor cultural options that are already trying to appeal to the least common denominator.

When I bought my current car, it was capable of receiving a satellite radio signal, and I simply had to request that it be turned on. (This ease of use is one reason why I purchased the model, so the commercial considerations here are real.) There was no law requiring the satellite radio option — just as there should be none requiring an AM radio option. This symmetry of treatment meets standards of both fairness and economic efficiency.

So I’ll say it again, no AM radio should not be mandated in cars, even though Congress is thinking of doing this on a bipartisan basis."

Nationalizing 5G Would Be an Unforced Error

Stick with what made the U.S. the world leader in 4G 

Letter to WSJ.

"In “China’s 5G Soars Over America’s” (op-ed, Feb. 17), Graham Allison and Eric Schmidt call for the Biden administration to build a “national highway system” for 5G wireless networks. This is consistent with Mr. Schmidt’s previous calls for a nationwide wireless wholesale network managed by the federal government and anointed government contractors. A similar idea was also proposed by some Trump administration officials before it was criticized on a bipartisan basis and buried. Does this op-ed foretell a new push toward a nationalized 5G regime?

Instead of relying on a government-run wireless operator, let’s stick with what made the U.S. the world leader in 4G: the entrepreneurial brilliance of the private sector investing risk capital. The authors omit that the U.S. wireless industry will have invested almost $300 billion in 5G infrastructure when all is said and done. But if they are looking for taxpayer dollars, last year’s infrastructure legislation will contribute $62 billion more on broadband, on top of the Federal Communications Commission’s $9 billion annual outlays in direct and indirect broadband support.

Messrs. Schmidt and Allison also omit that the same report they cite reveals that the U.S. has the highest 5G availability, at 49.2% and growing, while China has only 20.1%, and that our urban 5G download speeds are toe-to-toe with China’s.

The government could spur 5G deployment by scheduling more spectrum auctions and reloading the spectrum “pipeline.” But having the government own the means of wireless production would be a poor choice. A healthy dose of competitive paranoia is needed to excel in the global marketplace, but exaggerating to create a crisis to justify a nationalized wireless regime would undermine the authors’ ostensible goal of having the U.S. lead the world in 5G, and eventually 6G.

Robert M. McDowell

Hudson Institute

Vienna, Va.

Mr. McDowell was an FCC commissioner (2006-13)."

How to Mess Up a 5G Rollout

We’re from the FAA and we’re here to blame you for our mistakes 

WSJ editorial. 

"It’s hard to know which is more messed up these days—air transportation, or the Biden Administration. As another case in point, consider the clash between airlines and wireless carriers over 5G.

Verizon and AT&T said Tuesday they’ll delay a 5G rollout planned for Wednesday after airlines complained it would disrupt flights across the country. President Biden took credit for preventing anarchy in the skies, though his Administration created the mess.

At issue is the C-band spectrum that carriers plan to use to blanket metro areas with 5G. Carriers paid the U.S. government $80 billion for this valuable spectrum, but the Federal Aviation Administration now won’t let them use it. The agency says the signals could potentially interfere with plane altimeters that measure the distance to the ground.

The Federal Communications Commission reviewed these concerns during notice-and-comment on its plan to repurpose C-band from satellite operators. In March 2020, it approved a 258-page decision that included a safe buffer between the bands occupied by altimeters and 5G—larger than many other countries require.

Yet some 20 months later, the FAA demanded to relitigate the FCC decision and took airlines and carriers hostage. If Verizon and AT&T didn’t pause their 5G rollout, the FAA would order flights grounded or diverted. AT&T and Verizon didn’t want to be blamed for that, so they twice agreed to scale back and delay their rollouts.

Two weeks ago they struck a deal with the Transportation Department to limit C-band signals within a mile of airport runways for six months and delay deploying 5G until Jan. 19. The FAA said it wouldn’t ask for another delay. And if you believed that . . .

On Sunday the FAA said it had cleared only 45% of U.S. commercial airplanes to land in low-visibility conditions at only 48 of the 88 airports it deemed at highest risk from potential 5G interference. This didn’t cover Boeing’s wide-bodied 777 and 787 models, which are flying in countries around the world with fewer 5G restrictions.

This meant airlines would have to reroute or cancel thousands of flights. The disruptions would cause immediate havoc while forgone 5G service wouldn’t be felt by Americans. Wireless carriers would be blamed for the chaos, which is probably why they conceded Tuesday to more “voluntary” and “temporary” restrictions.

“At our sole discretion, we have voluntarily agreed to temporarily defer turning on a limited number of towers around certain airport runways as we continue to work with the aviation industry and the FAA to provide further information about our 5G deployment, since they have not utilized the two years they’ve had to responsibly plan for this deployment,” AT&T said.

That’s far too charitable to the FAA and Transportation Department. Transportation Secretary Pete Buttigieg rolled FCC Chair Jessica Rosenworcel, who has supported the carriers’ 5G rollout behind the scenes. And now he and Mr. Biden are portraying their blundering as a diplomatic victory. This Administration needs less political spin and more competent governance."

The FAA Dishonors Its Impressive Safety Record When It Impugns 5G

By Roslyn Layton. Excerpts:

"entrenched industries using federal spectrum and their regulators want to delay and deter new technologies of commercial spectrum licensed by the FCC.  The FAA could unscrupulously conflate safety with reality to get its way, feigning a Y2K-style crisis with each subsequent generation (“G”) of mobile wireless technology."

"The Commerce Department, National Oceanic and Atmosphere Administration, and National Aeronautics and Space Administration (NASA) have challenged 5G in the 24 GHz band saying wireless systems challenges their obsolete satellites. For decades, the Department of Education which did nothing in the 2.5 GHz band, a valuable piece of spectrum dedicated for Education Broadband Services, bristled when the Federal Communications Commission (FCC) moved to modernize the rules for its use"

"the Department of Defense (DoD), which if it had its druthers, would likely end all commercial spectrum auctions because it perceives a loss of control. DoD’s ongoing dispute against the FCC and wireless operator Ligado has become legendary for its exaggeration. An official DoD microsite claims Ligado’s low power US only network yet to be deployed could have “global [emphasis added] ramifications to U.S. national security, commercial and civil sectors, the economy, and those who rely on this service in their everyday lives.” In practical terms, the Pentagon’s hyperbole translate to military GPS receivers so fragile that they could be brought down by a wireless transmission at the power level of a light bulb."

"With speeds that top 100 Mbps, 5G can compete directly with wireline technologies to help close the digital divide and deliver broadband and video to homes and offices. These properties make it the cost-effective solution for high speed broadband in rural areas. C-band frequencies are in high demand. Last year’s auction of scant 280 MHz of C-band spectrum, repurposing outdated satellite technologies for newer, more efficient, and more valuable mobile applications, earned a record $94 billion."

"America’s 5G competitors China, Japan, and South Korea set aside more than 2-3 times as much C-band spectrum for 5G."

"the C-band rules have been in place for more than a year with the FAA being engaged along the way. That the FAA raises the flag now, at the 11th hour, just as 5G goes live in the C-band network is desperate and suspicious. In fact 5G has been operating since 2019 with no problems to aviation. More than 100 5G networks are in progress across 40 countries in the C-band and related bands."

"In the past 20 years, commercial aviation fatalities in the U.S. have decreased by 95 percent as measured by fatalities per 100 million passengers. The FAA attributes this success largely to new aircraft and real world safety practices developed in partnership between regulators, manufacturers, operators, and workers."

Denmark Proves We Don't Need the FCC

By nearly eliminating their equivalent of the Federal Communications Commission, Danes now enjoy some of the best IT and telecom services on earth

By Andrea O'Sullivan of Mercatus. Excerpts:

"Denmark in particular is praised for its stellar telecommunications services. The country has topped the International Telecommunications Union's ranking of global information and communication technology (ICT) provision for years due to its expansive broadband and wireless penetration, fast Internet speeds, and ample provider competition."

"So how did Denmark do it? Deregulation. By virtually eliminating their equivalent of the Federal Communications Commission (FCC), Danes now enjoy some of the best ICT service on the planet.

A new Mercatus Center working paper by Roslyn Layton and Joseph Kane describes precisely how Danish telecommunications officials undertook successful deregulatory reforms. It starts with Danish regulators who quickly understood the promise of digital technology and realized that government policies could quash innovative applications that would benefit consumers and businesses alike. From there, they developed a plan to prioritize competition and development instead of central control. This hands off-approach was so successful that eventually the country's National IT and Telecom Agency (NITA) was disbanded altogether."

"Policymakers clearly stated their opposition to subsidy-driven "growth" and heavy-handed regulation. The country's state-owned telecommunications provider, Tele Danmark (TDC), was completely privatized in 1998 through the efforts of Social Democrat Prime Minister Poul Nyrup Rasmussen. The next year, a consortium of Danish political parties formed a "Teleforlig," or telecommunications agreement, that outlined their goals. It stated:

It is important to ensure that regulation does not create a barrier for the possibility of new converged products… Regulation must be technologically neutral, and technology choices are to be handled by the market. The goal is to move away from sector-specific regulation toward competition-oriented regulation.

And Danish regulators kept this promise. For example, following the privatization of TDC, NITA levied special regulations on the provider so that it would not abuse its previous monopoly to prevent new competition in wireless. TDC was therefore subject to controls on its access to mobile networks and call origins. But NITA discovered that the wireless industry was sufficiently competitive by 2006, with four active providers in the market. Remarkably, NITA then dissolved the TDC regulations. As one official stated, "We are obliged to remove the regulation when the competitive situation demands it. There is no need to regulate something that market forces can take care of."

By 2011, Danish ICT provision had become so competitive and responsive to market needs that NITA closed up shop all together. Interestingly, this major deregulation was not the undertaking of a wild-eyed free market party, but rather a consortium of the center-left ruling parties. Nor did the development make much of a splash in the public eye, receiving very little public press or debate.

According to those involved with the reform, there was simply no need to operate a specialized telecommunications regulator anymore. Plus, the existence of a specialized telecommunications regulator could lend itself to regulatory capture and corruption—why invite temptation? Hence NITA was disbanded and its limited regulatory functions were transferred to the general Danish Business Authority."

"Denmark's voluntary net neutrality system sparked a revolution in mobile-app development in the country. Meanwhile, countries that chose top-down net neutrality regulation have remained stagnant."

Ending Taxpayer Funding for Public Broadcasting

By David Boaz.

"Thank you for the opportunity to testify on taxpayer funding for the Corporation for Public Broadcasting and by extension for National Public Radio and the Public Broadcasting System. I shall argue that Americans should not be taxed to fund a national broadcast network and that Congress should therefore terminate the funding for CPB.

We wouldn’t want the federal government to publish a national newspaper. Neither should we have a government television network and a government radio network. If anything should be kept separate from government and politics, it’s the news and public affairs programming that informs Americans about government and its policies. When government brings us the news — with all the inevitable bias and spin — the government is putting its thumb on the scales of democracy. Journalists should not work for the government. Taxpayers should not be forced to subsidize news and public-affairs programming.

Much of the recent debate about tax-funded broadcasting has centered on whether there is a bias, specifically a liberal bias, at NPR and PBS. I would argue that bias is inevitable. Any reporter or editor has to choose what’s important. It’s impossible to make such decisions without a framework, a perspective, a view of how the world works.

As a libertarian, I have an outsider’s perspective on both liberal and conservative bias. And I’m sympathetic to some of public broadcasting’s biases, such as its tilt toward gay rights, freedom of expression, and social tolerance and its deep skepticism toward the religious right. And I share many of the cultural preferences of its programmers and audience, for theater, independent cinema, history, and the like. The problem is not so much a particular bias as the existence of any bias.

Many people have denied the existence of a liberal bias at NPR and PBS. Of course, the most effective bias is one that most listeners or viewers don’t perceive. That can be the subtle use of adjectives or frameworks — for instance, a report that “Congress has failed to pass a health care bill” clearly leaves the impression that a health care bill is a good thing, and Congress has “failed” a test. Compare that to language like “Congress turned back a Republican effort to cut taxes for the wealthy.” There the listener is clearly being told that something bad almost happened, but Congress “turned back” the threat.

A careful listener to NPR would notice a preponderance of reports on racism, sexism, and environmental destruction. David Fanning, executive producer of “Frontline,” PBS’s documentary series, responds to questions of bias by saying, “We ask hard questions to people in power. That’s anathema to some people in Washington these days.” But there has never been a “Frontline” documentary on the burden of taxes, or the number of people who have died because federal regulations keep drugs off the market, or the way that state governments have abused the law in their pursuit of tobacco companies, or the number of people who use guns to prevent crime. Those “hard questions” just don’t occur to liberal journalists.
Anyone who got all his news from NPR would never know that Americans of all races live longer, healthier, and in more comfort than ever before in history, or that the environment has been getting steadily cleaner.

In Washington, I have the luxury of choosing from two NPR stations. On Wednesday evening, June 29, a Robert Reich commentary came on. I switched to the other station, which was broadcasting a Daniel Schorr commentary. That’s not just liberal bias, it’s a liberal roadblock.

In the past few weeks, as this issue has been debated, I’ve noted other examples. A common practice is labeling conservatives but not liberals in news stories — that is, listeners are warned that the conservative guests have a political agenda but are not told that the other guests are liberals. Take a story on the Supreme Court that identified legal scholar Bruce Fein correctly as a conservative but did not label liberal scholars Pamela Karlan and Akhil Amar. Or take the long and glowing reviews of two leftist agitprop plays, one written by Robert Reich and performed on Cape Cod and another written by David Hare and performed in Los Angeles. I think we can be confident that if a Reagan Cabinet official wrote a play about how stupid and evil liberals are - the mirror image of Reich’s play - it would not be celebrated on NPR. And then there was the effusive report on Pete Seeger, the folksinger who was a member of the Communist Party, complete with a two-hour online concert, to launch the Fourth of July weekend.

And if there were any doubt about the political spin of NPR and PBS, it was surely ended when a congressional subcommittee voted to cut the funding for CPB. Who swung into action? Moveon.org, Common Cause, and various left-wing media pressure groups. They made “defending PBS” the top items on their websites, they sent out millions of emails, they appeared on radio and television shows in order to defend an effective delivery system for liberal ideas. Public broadcasters worked hand in glove with those groups, for instance linking from the NPR website to those groups’ sites.

There are many complaints today about political interference in CPB, PBS, and NPR. I am sympathetic to those complaints. No journalist wants political appointees looking over his shoulder. But political interference is entirely a consequence of political funding. As long as the taxpayers fund something, their representatives have the authority to investigate how the taxpayers’ money is being spent. Recall the criticism directed at PBS in 1994 for broadcasting Tales of the City, which has gay characters. Because of the political pressure, PBS decided not to produce the sequel, More Tales of the City. It appeared on Showtime and generated little political controversy because Showtime isn’t funded with tax dollars. Remove the tax funding, and NPR and PBS would be free from political interference, free to be as daring and innovative and provocative as they like.

One dirty little secret that NPR and PBS don’t like to acknowledge in public debate is the wealth of their listeners and viewers. But they’re happy to tell their advertisers about the affluent audience they’re reaching. In 1999 NPR commissioned Mediamark Research to study its listeners. NPR then enthusiastically told advertisers that its listeners are 66 percent wealthier than the average American, three times as likely to be college graduates, and 150 percent more likely to be professionals or managers.

But perhaps that was an unusual year? Mediamark’s 2003 study found the same pattern. As NPR explained, based on the 2003 study:

Public radio listeners are driven to learn more, to earn more, to spend more, and to be more involved in their communities. They are leaders and decision makers, both in the boardroom and in the town square. They are more likely to exert their influence on their communities in all types of ways - from voting to volunteering

Public radio listeners are dynamic - they do more. They are much more likely than the general public to travel to foreign nations, to attend concerts and arts events, and to exercise regularly. They are health conscious, and are less likely to have serious health problems. Their media usage patterns reflect their active lifestyles, they tend to favor portable media such as newspapers or radio.

As consumers, they are more likely to have a taste for products that deliver on the promise of quality. Naturally, they tend to spend more on products and services.

Specifically, the report found, compared with the general public, NPR listeners are

• 55 percent less likely to have a household income below $30,000
• 117 percent more likely to have a household income above $150,000
• 152 percent more likely to have a home valued at $500,000 or more
• 194 percent more likely to travel to France
• 326 percent more likely to read the New Yorker
• 125 percent more likely to own bonds
• 125 percent more likely to own a Volvo.

PBS has similar demographics. PBS boasts that its viewers are

• 60 percent more likely to have a household income above $75,000
• 139 percent more likely to have a graduate degree
• 98 percent more likely to be a CEO
• 132 percent likely to have a home valued at $500,000 or more
• 315 percent more likely to have stocks valued at $75,000 or more
• 278 percent more likely to have spent at least $6000 on a foreign vacation in the past year.

Tax-funded broadcasting is a giant income transfer upward: the middle class is taxed to pay for news and entertainment for the upper middle class. It’s no accident that you hear ads for Remy Martin and “private banking services” on NPR, not for Budweiser and free checking accounts.

Defenders of the tax-funded broadcast networks often point out that only about 15 percent of their funding comes from the federal government. Indeed, NPR and PBS have been quite successful at raising money from foundations, members, and business enterprises. Given that, they could certainly absorb a 15 percent revenue loss. Businesses and nonprofit organizations often deal with larger revenue fluctuations than that. It isn’t fun, but it happens. In a time of $400 billion deficits, Congress should be looking for nonessential spending that could be cut. Tax-funded broadcasting is no longer an infant industry; it’s a healthy $2.5 billion enterprise that might well discover it liked being free of political control for a paltry 15 percent cut.

Finally, I would note that the Constitution provides no authority for a federal broadcasting system. Members of Congress once took seriously the constraints imposed on them by the Constitution. In 1794 James Madison, the father of the Constitution, rose on the floor of the House and declared that he could not “undertake to lay his finger on that article of the Federal Constitution which granted a right to Congress of expending, on objects of benevolence, the money of their constituents.” In 1887, exactly 100 years after the Constitution was drafted, President Grover Cleveland made a similar point when he vetoed a bill to buy seeds for Texas farmers suffering from a drought, saying he could “find no warrant for such an appropriation in the Constitution.” Things had changed by 1935, when President Roosevelt wrote to Congress, “I hope your committee will not permit doubts as to constitutionality, however reasonable, to block the suggested legislation.” I suggest that this committee take note of the fact that no article of the Constitution authorizes a national broadcast network.

Even if this committee comes to the conclusion that taxpayer funding for radio and television networks is imprudent and constitutionally unfounded, I recognize that you may hesitate to withdraw a funding stream that stations count on. In that regard, I would note again that federal funding is only about 15 percent of public broadcasting revenues. But you might also phase out the funding, perhaps on a five-year schedule. The total funding request for this year is about $500 million. Congress might decide to reduce it by $100 million a year, leaving the CPB entirely free of federal taxpayer funding at the end of five years.

But Congress’s resolve in such matters is not trusted. Recall the 1996 Freedom to Farm Act, which likewise promised to phase out farm subsidies. Barely two years had passed when Congress began providing “emergency relief payments” to make up for the scheduled reductions. This time, if Congress pledges to phase out broadcasting subsidies, it needs to make sure that its decision sticks.

A healthy democracy needs a free and diverse press. Americans today have access to more sources of news and opinion than ever before. Deregulation has produced unprecedented diversity-more broadcast networks than before, cable networks, satellite television and radio, the Internet. If there was at some point a diversity argument for NPR and PBS, it is no longer valid. We do not need a government news and opinion network. More importantly, we should not require taxpayers to pay for broadcasting that will inevitably reflect a particular perspective on politics and culture. The marketplace of democracy should be a free market, in which the voices of citizens are heard, with no unfair advantage granted by government to one participant."

See Still Paying the ‘Wheeler Tax’ from the WSJ. Excerpts:

"The U.S. economy continues to create jobs, but there’s a big exception. Companies making computer and electronic products and in the telecommunications side of the information industry employed 29,000 fewer workers in August than they did a year earlier.

These disappointing results follow a recent update from economist Hal Singer"

"Mr. Wheeler’s FCC imposed monopoly telephone rules from the 1930s on the competitive internet'

"Mr. Singer specifically looks at capital expenditures on network infrastructure. He finds that, after an era of growth, the 12 largest U.S. internet service providers reduced investment by 8% in the first six months of this year compared to the same period in 2014, the last year before the new regulatory regime."

"The commission’s chief economist in 2014, Tim Brennan, declared after leaving the FCC that the rules were an “economics-free zone.”"

FCC's Cable Box Mandate: Costly, Illegal, and Unnecessary

By Ryan Radia of CEI.

"Regulators at the Federal Communications Commission (FCC) want to dictate how cable and satellite television providers design their so-called “set-top boxes”—a fancy term for what many people refer to as a DVR or HD box that they rent from their television provider. The FCC claims its proposed rules would “unlock” the box, enabling consumers to watch live television on all sorts of devices—from smartphones to gaming consoles—instead of paying $10 to rent a dedicated set-top box.

But there’s a big problem with this proposal: it’s costly, unnecessary, and outside the scope of the agency’s authority. This won’t come as a surprise if you follow the FCC, which has recently embarked on numerous ill-conceived regulatory voyages from micromanaging Internet service providers to stripping elected state legislatures of the authority to pass laws protecting taxpayers from municipal boondoggles. In the same vein, the FCC’s new effort to regulate set-top boxes will only hurt consumers and delay innovation.

The FCC’s foray into set-top boxes is especially bizarre given that these boxes are quickly going out of style. Comcast and Time Warner Cable, two of the nation’s largest cable companies, have announced that renting a cable box will soon be optional for their subscribers, who will be able to watch and record television on devices including Roku media players and newer “smart” television sets.

Meanwhile, Internet-based services like Dish Network’s Sling TV and Hulu’s forthcoming cable-killer stream live television to practically any device, while on-demand platforms like Netflix, Amazon Prime, and HBO NOW offer massive libraries of movies and television shows, including lots of original content.

To read more about why regulating set-top boxes is an unwise idea, check out the comments that CEI recently filed with the FCC along with TechFreedom. We explain why Congress never authorized the agency to impose such far-reaching rules on cable and satellite providers. We discuss how the rules would undermine copyright laws, stripping the owners of television shows of the right to enforce the terms of their licensing agreements with television providers. And we told the FCC that if it insists on issuing new rules, it should consider a far less costly and dubious option, known as the “Apps-Based Proposal,” which would not require television providers to re-architect their systems."

Privatize the Spectrum

Great post from Alex Tabarrok at Marginal Revolution. See Privatize the Spectrum.

"The proposed merger between AT&T and T-Mobile is getting a lot of attention with most of the focus being on whether consumers will pay higher prices. The answer is maybe. Prices per minute have been falling and this was true even following the two big mergers in 2004-05 (Cingular/AT&T Wireless, and Sprint/Nextel). Quality-adjusted prices, i.e. taking into account the post-merger buildout of 3G networks, have fallen even further. On the other hand, although there are competitors in many large local markets and potential competitors (the Cable companies own a chunk of spectrum not yet in use) a merger could increase market power. But even if consumer prices did rise the merger is probably still a good idea. It’s long been known that even small cost savings can outweigh losses to consumers from a price increase (Nobelist Oliver Williamson was one of the first to drive this point home.)

The big issue, however, is not the merger. The big issue is reallocating spectrum from low to high value uses. My colleague Thomas Hazlett argues that spectrum currently being used for low-value over-the-air broadcast of television could, if it were reallocated to high-value uses like wireless, increase consumer welfare by over a trillion dollars. Moreover, for a price of about 3 billion we could switch almost all of the tv-viewers to cable or satellite. President Obama has pledged to move a big chunk of spectrum, about 500 mhz, to wireless but the process is slow and highly politicized. What really needs to be done is to auction off as much spectrum as possible with as few restrictions on it use as possible. Let the market allocate spectrum across all uses, allowing value maximizing trades. More spectrum would not only be good in itself it would alleviate any concerns about the merger."

Here is the link about Williamson: Williamson trade-off model. The idea is that when two firms meger, if they get more efficient and lower cost, the fall in consumer surplus due to a higher price (the market becomes less competitive) is more than offset by the gain in producer surplus. So overall, society benefits. Here is the graph: