The Law and Economics of Wardrobe Malfunction

Abstract:     
This article examines the Federal Communication Commission's indecency regulation for television and radio. In recent years, the FCC has not only pursued high profile enforcements such as Janet Jackson's well-known Super Bowl half time show, but perhaps more important, has issued fines against broadcasters in record amounts totaling millions of dollars. Critics claim that these enforcements are politicized, arbitrary, and chilling of free speech.

This article proposes a new, market-based mechanism for indecency regulation that avoids the pitfalls of the FCC's current approach. The proposal focuses on the viewer-advertiser relationship, in distinction to the FCC's regulations, which concentrate solely on the broadcaster. Drawing on recent economic theory involving two sided markets, we argue that if the FCC required disclosure of all the programming that advertisers sponsor, consumers could more efficiently pressure advertisers directly, resulting in programs that better reflect community standards of indecency.

Keywords: Federal Communications Commission, broadcast regulation, indecency

JEL Classifications: K00, K23

Accepted Paper Series