With the advent of a new administration, there has been a lot of discussion regarding the shortcomings of the FCC and the reforms that should be adopted to right them.  One recommendation (with which I agree) is that the people that make the rules and regulate the spectrum should at least understand some of the basics and make sure they have competent people they listen to for technical advice. Obviously, this recommendation applies beyond just spectrum related technologies.  I would add that the same people (i.e. Commissioners and key staff) should also understand the basics of a business plan as well as the markets that they regulate – so that they might fathom some of the implications and unintended consequences of their decisions.

Better leadership and staffing could improve the agency’s decision-making, but the FCC needs to become more effective at solving policy problems.  There is a lack of a strategic vision and process to shape the agency’s policy and regulatory decisions.  The agency seems to operate with almost no strategic thinking or planning, and it appears to do so absent any well-developed data and analyses.

Lacking a strategic context, the agency’s decision‐making often seems to be faith-based -- driven by politics or ideology -- with agency staff frequently directed to develop analysis and justification to support a pre-determined result.  The December 2008 House Energy and Commerce Committee report noted, for example, that there are instances where they “cook the books” by manipulating, withholding and suppressing data, reports and other information.

The lack of a strategic context is compounded by a lack of independent data and analysis. To a large extent, the FCC is dependent on the work of the interested parties that appear before it – and therefore relies almost exclusively on the (frequently) contradictory analysis and arguments submitted by the interested parties.  Although an “independent” agency, its decisions are rarely based on independent analysis.  The determinations of the FCC should be rooted in independent analysis available to all for review and comment.

Another issue addressed in the House report is the lack of transparency.  Transparency is important because the FCC is a public agency that receives public funds for the purpose of regulating communications in the “public interest.”   If issues are not handled in an open manner based on independent data and analyses, it is difficult to predict the results of the regulatory process.  The lack of transparency into and predictability of the agency’s decision processes is a clear disincentive for investment.

It is important, therefore, to inject more openness and rationality into the agency’s decision-making process so that expert analysis drives policy choices in a straightforward manner – rather than the other way around.   This can be achieved through a formalized top-down strategic planning process to shape the agency’s decision-making  and independent analyses to inform its decisions.

Before continuing, I note that the FCC, as required by the OMB, has a “Strategic Plan” (the latest one is for the period 2009 to 2014).  But the strategic planning approach has yet to take hold as part of the agency’s culture.  The law requires the Commission to develop a plan but does not compel it to follow one.

The strategic planning process should begin with a clear (and agreed to) statement of the FCC’s role and mission – which sets expectations of where the agency should go and projects the agency’s image to its customers (i.e. the Public).  The objectives -- the concrete goals that the agency seeks to achieve – should be clearly defined and measurable so that the agency (and Public) can monitor its progress and make corrections as needed. The FCC’s primary purpose should be to formulate and execute specific strategies to reach those objectives.   The ongoing results of implementing the strategies need to be measured and evaluated, with appropriate the agency taking corrective action as required to keep the plan on track.  The eventual success of any policy depends on establishing clear goals, which must be flexible to change as the circumstances evolve over time.

A model for the process described above is that of the Office of Communications (Ofcom), the UK’s independent regulator for broadcasting, telecommunications and wireless.  Ofcom, established in 2003, has a commitment to strategic policymaking that involves considerable up-front analysis and public discussion. To that end, it conducts a series of broad reviews and uses regular consultancies to explain its views on the general regulatory environment and what issues will be addressed going forward.  As a result, Ofcom has established itself as an “evidence-led” regulator committed to making regulation through gathering evidence and making data-driven decisions.

As I mentioned, the FCC already has a perfunctory but neglected strategic plan.  It needs to be revamped -- beginning with a revision of its mission statement -- and developed as the front part of an overall strategic planning process.  The necessary first step should be the appointment of a Chairman, Commissioners and key staff committed to long‐term strategic planning, supported by independent staff analysis and evidence-based decision-making.  This would be the best way to enhance transparency and promote predictability.

Kostas Liopiros