FCC Tunes Out Consumers
[August 12, 2002]

By S. M. Oliva

Last Friday, the Federal Communications Commission issued a final order to carry out its 1997 congressional mandate to "phase in" High Definition Television (HDTV) over the next five years. The order says that in 2007, all television signals must be digitally transmitted, and, not coincidentally, all television sets sold must be manufactured to receive these signals. The traditional antenna-based analog signals will no longer be allowed after 2007.

At present, about 20% of Americans do not possess televisions capable of receiving digital signals. These sets will either have to be scrapped or their owners will have to subscribe to cable. After 2005, all televisions sold will be digital-equipped, at a cost of about $100 extra to the consumer.

In some corners, we'd call a government mandate that forces consumers to pay more for something a tax. We know it sounds old-fashioned, but it seems to me that there is nothing in the Constitution which grants Congress the power to tell Americans what television sets they may or may not use. Supposedly, a marketplace exists to decide those questions.

Now the reply to this argument is, "it's the commerce clause, stupid." Since Congress can regulate interstate commerce, they can mandate television set standards. It's an interesting theory, and one that is applied to just about every facet of the U.S. economy these days, but it's wrong. The constitutional grant of "interstate commerce" power to Congress was intended so that federal government would protect the process of commerce. It was not a license to dictate the outcomes of commerce, as is the case here.

What makes the FCC's actions here all the more appalling is the not-so-secret motivation. Broadcasters are required under the law to exchange their analog signals for digital ones by the 2007 deadline. Once the analog frequencies are returned, the FCC will then auction them off again to cell phone broadcasters, making a handsome profit for the government while sticking consumers with the burden of buying costlier televisions.

At no point did anyone—not Congress, not the FCC, not even the businesses affected—ever suggest that we try capitalism. In other words, nobody stood up and said the broadcast frequencies are not public property (as they have been since the New Deal), but are just another form of private property that the government should not interfere with the use of. I know, that's a radical idea. Companies would profit instead of regulatory agencies.

If anything, however, this is a good case study of how fraudulent the claim is that the government acts to "protect consumer rights," a phrase you often hear in antitrust proceedings and product regulation. If consumer rights really was a government interest, then why did it not apply here?

I don't know the answer to that, but it's certainly not a question I'll be asking the FCC anytime soon.

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