Review of Industrial Organization 21: 337–356, 2002.
© 2002 Kluwer Academic Publishers. Printed in the Netherlands.
Economic Issues at the Federal Communications
EVAN KWEREL, JOHATHAN LEVY, ROBERT PEPPER, DAVID
SAPPINGTON, DONALD STOCKDALE and JOHN WILLIAMS
Abstract. This article reviews some of the key economic issues that face the Federal Communica-
tions Commission. These issues include those that underlie the design of broadband policy, spectrum
policy, competition policy, and media ownership policy.
Key words: Broadband, communications policy, competition, Federal Communications Commis-
sion, media ownership, spectrum.
The Federal Communications Commission (FCC) has responsibility for overseeing
interstate and international communications by radio, television, wire, satellite and
cable. Commission policy is developed by various bureaus and ofﬁces within the
Commission, most of which have their own staff economists. The role of econom-
ists at the Commission has increased signiﬁcantly over the past twenty-ﬁve years.
Economists now identify important issues for the Commission, help to evaluate
these issues at an early stage, and perform analyses that inform ﬁnal decisions on
important policy matters.
Economists are performing these functions with regard to the major policy
issues that confront the FCC today. Early in his tenure, Chairman Michael K. Pow-
ell identiﬁed broadband deployment, competition policy, spectrum allocation, and
media ownership rules as four of the major policy issues to be addressed (Powell,
2001). The purpose of this article is to explain the key economic principles and
questions that underlie each of these policy issues.
The authors are all members of the Ofﬁce of Plans and Policy at the FCC. Robert Pepper is the
Chief of the Ofﬁce, Evan Kwerel is a senior Economist, Donald Stockdale is the Director of Research,
and John Williams is a Senior Engineer. Jonathan Levy is the FCC’s Deputy Chief Economist, and
David Sappington is serving as the FCC’s Chief Economist, while on leave from the University of
The views expressed in this article are those of the authors, and are not necessarily the views of the
Federal Communications Commission or any of its Commissioners.