Legislators V. Regulators: The Case of Low Power Fm Radio

40 Pages Posted: 26 Mar 2002

Multiple version iconThere are 2 versions of this paper

Date Written: February 2002

Abstract

The recent Federal Communications Commission rule making for low power FM radio has been widely reported as an instance where Congress sharply rebuked the Commission for enacting rules too favorable to entrants. Because rival policy optima are quantifiable in this case, the preferences of consumers, Congress and the Commission can be directly compared. While differences in policy preferences of Congress and the regulatory agency were visible to interest groups, they appear extremely modest when compared to the open entry (welfare maximizing) policy alternative. A financial event study reveals that incumbent broadcast station equity values were neither threatened by the Commission's low power FM rules, nor materially enhanced by their reversal in Congress. This lends empirical support to the Congressional Dominance view of regulation, and illustrates the margins on which blame - and credit - shifting strategies are utilized by policy makers.

JEL Classification: H1, H8, L5, N4

Suggested Citation

Hazlett, Thomas W. and Viani, Bruno E., Legislators V. Regulators: The Case of Low Power Fm Radio (February 2002). AEI-Brookings Joint Center Working Paper No. 02-1, Available at SSRN: https://ssrn.com/abstract=304206 or http://dx.doi.org/10.2139/ssrn.304206

Thomas W. Hazlett (Contact Author)

Clemson University ( email )

Clemson, SC 29634
United States
8646563430 (Phone)
8646564192 (Fax)

HOME PAGE: http://hazlett.people.clemson.edu/

Bruno E. Viani

Alpha Economics LLC ( email )

PO BOX 11896
Burke, VA 22015
United States

HOME PAGE: http://www.alphaecon.com

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