President-elect Donald Trump has made it clear: He is not a fan of federal regulations. He stated on the campaign trail that 70 percent of federal regulations could be eliminated and announced plans to do away with two existing regulations for every new one.
His intuition should be applauded, but on their own, these actions may simply drive regulatory activity toward informal enforcement and reduce the rule of law among the federal agencies he hopes to rein in.
To create lasting regulatory reform, the new administration must also focus on laws that reduce agency jurisdiction. That's because there are a number of tools at an agency's disposal when it decides it wants to act. For many agencies, formal, published regulations only emerge when they have run out of alternatives.
Most of these transactions are straightforward license transfers, which require a simple registration with the FCC documenting that ownership of a broadcast tower or telephone line has changed hands.
This once-defendable requirement for the AT&T telephone monopoly, however, has metastasized into a near-limitless ability to coerce agreements from cable, media and technology firms who need the FCC's blessing for a transaction.
Demands by activists feature prominently in FCC approvals, and they request conditions - like broadband price controls, monetary donations to public safety organizations, and dedicated children's and Spanish-language TV programming- that could never be achieved through the traditional regulatory process.
The rules remained in place for the companies in question, however, because they were a requirement extracted during prior transactions. And parties are unwilling to challenge them because they fear retaliation.
Trump is correct in focusing on the pernicious role that federal regulations can play in economic growth and innovation. The problem, however, is that the rules are just the surface of a quagmire of backroom behavior by federal regulators and captive industries.
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