FCC OKs Creating New Economic Office

Will do cost-benefit analysis, gather data, oversee auctions

A divided FCC has voted to launch a new FCC Office of Economics and Analytics, which will level existing staff and resources to provide more systemic and regular economic vetting of the FCC's proposed policies and rules. It will also move around staffers and eliminate one office.

That decision came at a busy Jan. 30 public meeting.

Related: FCC Names Jerry Ellig Chief Economist

As part of that decision, auction oversight will be moved under the new office, whose staff will number about 100, as well as some data collection. It will also conduct long-term research on improving FCC policies and processes.

"[W]e’ll now conduct a rigorous cost-benefit analysis for rulemakings estimated to have over $100 million of economic impact," FCC chair Ajit Pai said.

He explained the impetus for the office and attendant reorganization in his meeting statement: "First, staff economists weren’t guaranteed a seat at the policy-making table. Second, notwithstanding a rapidly converging marketplace, economists worked in policy silos. Third, cost-benefit analysis was too often ignored. And fourth, data was not particularly well collected or managed across the agency."

As part of the revamp, the Office of Strategic Planning and Policy Analysis will be eliminated and its staffers moved into the new office, as well as some staffers from other offices.

Pai, while in the minority, had long argued that FCC decisions lacked the kind of cost-benefit analysis needed to gauge the economic impact of FCC decisions on stakeholders.

The Republicans all voted for the new office, while the Democrats dissented.

Democratic commissioner Jessica Rosenworcel said she hoped the new office would be a net positive to the FCC's work, but said since she had had some basic questions about the office that went unanswered, she could not support it.

"I think it’s irresponsible to vote on a conceptual reorganization — which is what we have here — without frank information about how we will populate this effort," she said. "I think this lack of transparency is problematic — for the staff of this agency and the work it does. Having been refused this basic information, I dissent."

Pai addressed a criticism leveled at the office.

"[S]ome argue that our commitment to conducting cost-benefit analysis is somehow an attack on the public interest standard set forth in the Communications Act," he said. "But thoughtful cost-benefit analysis has historically been a bipartisan tradition. Both the Clinton and Obama Administrations issued guidelines on this topic—guidelines which the Trump Administration’s Executive Order 13771 directs agencies to follow. And in 2011, President Obama’s Jobs Council called for separation of economists from program offices (as we are doing today) so that functions like cost-benefit analysis could be carried out with integrity."

"IIA supports today’s FCC action that spotlights the importance of data in crafting fact-based decision-making for our nation’s communications marketplace," said the Internet Innovation Alliance. "Making future analysis – based on effectively managed data and economic marketplace realities – an integral part of the Commission’s organization and processes will help enable the agency to promote sound policies and regulatory outcomes aimed at advancing the public interest."