Media Policy and Regulation

John Allen Hendricks. 21st Century Communication: A Reference Handbook. Editor: William F Eadie. Sage Publication. 2009.

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

The purpose of this chapter is to provide (a) an overview and understanding of the policies that serve as a foundation for media regulation in the United States, (b) an overview of regulatory oversight bodies in the United States, (c) an overview of regulatory policies with 21st-century implications, (d) an overview of policy development for the Internet and future directions for Internet regulation, (e) an overview of the robust debate surrounding the role that marketplace forces versus government forces should play in the development of and oversight of media policy, and (f) a synopsis of the future of 21st-century policy and regulation as it develops domestically and globally.

Despite having been created in the early 20th century, it is essential to examine the past regulatory policies as numerous sections of those policies remain in effect today and are still being enforced by the federal government. Moreover, not only do the policies continue to play a significant role in the day-to-day operations of media outlets, but they also have a significant influential role in the future development of the telecommunications industry in the 21st century. In 2007, Case stated, “The year looks to be business as usual when it comes to government regulation over the media, with perennial issues like media ownership, indecency and the battle between the telcos and cable companies still on the agenda” (p. 16).

The rationale for regulating mass communication has been supported by the scarcity theory, which asserts that there are limited frequency allocations for radio and television stations on the electromagnetic spectrum. Accordingly, broadcasters who are privileged enough to be granted access to the nation’s limited radio and television frequencies, considered a scarce national resource, should attempt to serve the interests of the public in the geographic region to which they are licensed. As a result of the scarcity theory, broadcasters are required through media policy to serve the “public convenience, interest and necessity” within their respective communities. Broadcasters refer to this as the “public interest” standard.

Media Policy and Regulatory Foundations

Radio Act of 1927 (Public Law Number 632 by the 69th Congress)

In the United States, media policy has paralleled the development of media technology. The first notable piece of media policy that was designed to regulate the broadcasting industry was the Radio Act of 1927. The Radio Act of 1927 was signed into law by President Calvin Coolidge in February 1927 and was designed to eliminate deficiencies in the Radio Act of 1912. The specific objective of the 1927 act was to provide stability to a rapidly proliferating radio industry.

The Radio Act of 1912 was deficient in a number of ways. Notably, it did not provide the Department of Commerce the full authority to regulate the radio industry. The 1912 act did not permit a governmental regulatory agency the ability to regulate the power or hours of radio transmission, allocate frequencies, and deny radio licenses—all of which, were needed at the time to stabilize the new industry.

The radio industry experienced exponential growth during the early to mid-1920s due to the popularity of commercial programming. The developmentof commercial programming enabled radio stations to generate profits. As is natural in a capitalist society, the profits served as the impetus for the rapid growth of radio. Beginning in 1922, the radio industry made several attempts to impose rules and regulations on its own industry. This attempt at self-regulation failed after several years of annual conferences to work out the details.

After the failed attempts at self-regulation, the Radio Act of 1927 replaced the Radio Act of 1912. The new act contained several important initiatives that allowed for needed regulation of radio to stabilize the industry and reduce chaos over frequency allocations. The 1927 act created the Federal Radio Commission (FRC) to serve as the government’s agency to regulate the medium of radio.

The new regulatory agency usurped authority from the Department of Commerce and the Secretary of Commerce and Labor. The president appointed five individuals, or commissioners, to the FRC from five geographic zones in the nation. Those individuals were required to go through the Senate confirmation process. Importantly, the FRC was provided with the authority to allocate radio frequencies and licenses. The Davis Amendment provided that the allocation of radio frequencies, radio licenses, times of operation, station wattage, and wavelength be equally distributed across the designated geographic zones from which the commissioners were appointed.

The “public interest” standard was a component of the 1927 act and, as already noted, is based on the belief that the public at large owns the electromagnetic spectrum, or the radio spectrum, and that individuals should be provided the authority, through licensing, to use a portion of the radio spectrum via radio frequencies. Since applications for radio frequencies outnumber the available frequencies, the individuals who are granted a frequency license must agree to serve the “public interest, convenience, and necessity” of the community in which they are licensed. This requirement by the government to serve the public’s interest was not new to the federal government as it had already used the “public interest” approach in earlier legislation that was designed to regulate the nation’s public utilities.

Each radio licensee was, and still is, required to document how the broadcast station is serving the public interest. Although the Radio Act of 1927 provided First Amendment protection, radio programming was not permitted to contain obscene, indecent, or profane language. The courts have ruled that the mass medium of broadcasting is too pervasive to permit questionable programming during times of the day when minors are likely to be present. The FRC was not granted the authority to regulate radio advertising, however. The Federal Trade Commission (FTC) has been assigned that authority.

Communications Act of 1934 (47 U.S.C. 609) (Title 47 of the U.S. Code)

In 1933, President Franklin D. Roosevelt directed Daniel Roper, the Secretary of Commerce, to establish a committee to conduct a study examining the issues of regulating the radio industry and auxiliary communication industries such as telephone and telegraph. The Department of Commerce’s report asserted that there was an inadequate regulatory structure in place, thus causing the president and Congress to modify the regulatory structure that had been created by the Radio Act of 1927.

In the Department of Commerce report, it highlighted the fact that the FRC only had authority to regulate wireless communications and needed additional regulatory powers to provide oversight to all communication industries. Accordingly, it was recommended that regulation of both wire and wireless communications be combined under one regulatory agency. Previously, the Interstate Commerce Commission (ICC) provided regulatory oversight to the telephone and telegraph industries. Hence, Congress began the process of drafting a new policy to address the deficiencies. Once the Communications Act of 1934 was crafted, it completely replaced the Radio Act of 1927. The Communications Act of 1934 was signed into law in June 1934 by President Franklin D. Roosevelt.

During the years following the enactment of the act, numerous amendments were made to the Communications Act of 1934 to keep it current with technological advancements. Most notably, amendments to the act were made to address satellite technology, public broadcasting, and cable television. The 1934 act replaced the FRC, whose existence needed to be approved annually by Congress, with the permanent Federal Communications Commission (FCC). The FCC was assigned the authority to grant licenses for telecommunications operators and ensure that rules created by the 1934 act are followed by the licensees. Like its predecessor, the 1934 act also required that broadcasters continue to serve the “public interest,” and they were required to provide documentation of such programming.

The Communications Act of 1934 prevents the FCC from censoring the content of programming. However, the FCC does have the ability to levy huge financial penalties against broadcasters who violate policies regarding profanity, indecency, or obscenity. Observers of the telecommunications industry argue that financial penalties create a chilling effect on free speech and First Amendment rights. Although indecent programming is protected by the First Amendment, it can only be broadcast during times of the day when children are least likely to hear or see the program.

As already noted, the Communications Act of 1934 was amended as technology advanced. This was especially true in relation to the cable television industry. The FCC asserted in 1962 that it had regulatory authority over the cable television industry since channels were being sent using microwave transmission. The cable television industry challenged this assertion. In 1968, in United States v. Southwestern Cable Company, the U.S. Supreme Court upheld the FCC’s right to regulate the cable television industry citing its ability to influence the traditional broadcasting industry.

In 1984, the Cable Communications Policy Act was passed by Congress and was an attempt to deregulate the cable industry. This act also gave cities and counties the ability to play a role in cable television regulation by being able to grant franchise licenses to cable operators on entry into local communities. In 1992, Congress passed the Cable Television Consumer Protection and Competition Act, which was designed to regulate rates that cable operators could charge consumers. The 1992 act was also an attempt to create a more competitive marketplace for the cable industry by allowing for more than one cable system per community to operate. In the Telecommunications Act of 1996, cable rates were further deregulated, and policies were designed that encouraged telephone companies to offer cable television services. The 1996 act also permitted cable companies to offer phone service to consumers. This cross-platform approach to encouraging competition was a new philosophy.

Telecommunications Act of 1996 (47 U.S.C. § 101 et seq., Pub. LA. No. 104–104, 110 Stat. 56)

Although there had been numerous amendments and revisions made to the Communications Act of 1934, Congress found the legislation to be antiquated and in need of attention due to rapid technological advancements. Moreover, Congress wanted to deregulate the communications industry in order to stimulate competition in the marketplace. Thus, the Telecommunications Act of 1996 was passed by Congress and signed into law by President William J. Clinton in February 1996.

The Telecommunications Act of 1996 supersedes the Communications Act of 1934 and is very complex. But there are some key initiatives in the 1996 act that affect 21st-century communications policy and regulation. The basic underpinnings of the Telecommunications Act remain based on the “public interest, convenience, and necessity” standard. Again, it requires broadcasters to serve the interests of the community in which they are licensed.

An important, and controversial, aspect of the 1996 act allowed corporations to own up to 35% of the nation’s television viewing households. It was controversial due to concerns of creating an environment where only a few conglomerates possessed access to the majority of the broadcast frequencies, thus limiting multiple perspectives and opinions. The act eliminated all national radio ownership limits and allowed for corporations to own more stations within each media market. The duopoly rule for radio was repealed, allowing for the ownership of up to eight radio stations in the larger media markets and five stations in the smaller media markets. Critics have argued that rather than create a competitive environment, the 1996 act promotes concentration of power and conglomerate mergers.

The 1996 Telecommunications Act also allows for cross-ownership between media platforms. Telephone companies can now offer cable television service, and cable television companies can offer telephone service. Specifically, telephone companies are permitted to offer video service as an over-the-air provider, as a common carrier, as a cable television system, and as an open video service that is a hybrid cable system and common carrier. To avoid paying franchise fees to local cities and counties, cable television companies are permitted to provide video service as an open video system. The 1996 act permits consumers to purchase their own set-top boxes to acquire programs. Before the 1996 act, consumers were required to pay monthly fees to cable television companies for set-top boxes. The 1996 act also permits consumers complete access to direct broadcast systems (DBS) and prevents any local entities from banning satellite dishes.

The Communications Act of 1934 required that licenses for television stations be renewed every 5 years, whereas radio stations had to go through licensure every 7 years. In contrast, the Telecommunications Act of 1996 changed the licensing periods for both television and radio to 8 years and simplified the renewal process. The FCC will automatically renew a station’s license for an additional 8-year period if during the previous 8 years, (a) the station has demonstrated no patterns of abuse, (b) the station has no serious regulatory violations, and (c) the station has served the public interest.

The Telecommunications Act of 1996 also assigned a digital television channel to all existing analog television channels at no cost to the existing channel licensee. Initially, all television analog channels were scheduled to be phased out by February 2009. But, Congress approved a request by President Barak Obama to move the date of the analog-to-digital transition from February to June 2009. The Obama administration was concerned that rural residents were not prepared for the transition. To assist with this monumental transition, Congress passed the Digital Television Transition and Public Safety Act of 2005, which included a provision designed to help consumers make an affordable transition to high-definition, or digital, television. It provides coupons to offset the cost of set-top boxes to convert the digital signals back to analog signals since many consumers still own analog television sets at the time of the conversion. The 2005 act allows all U.S. households to obtain a maximum of two $40 coupons to offset the cost of the converter boxes. Only consumers whose television set is analog and channels are received over the air will need the converter box.

The 1996 act focused on programming content regulation. It established fines for programming that transmitted obscene, lewd, or indecent material with the intent to harass another individual. The Communications Decency Act (CDA) was included in the 1996 act; however, in Reno v. ACLU (1997), the U.S. Supreme Court ruled that the CDA was unconstitutional. The act also required cable television systems to scramble all audio and video of any indecent programming at no cost to the consumer.

Furthermore, the act required that all new television sets include a V-chip to allow parents to block violent or other inappropriate programs to prevent children from being exposed to them. All programs would include ratings that were assigned based on the content of the programs. Interestingly, a much noted weakness of the 1996 act is that it did not anticipate the rapid rise of the Internet. Maxwell (2005) stated, “Tellingly, the 1996 Act mentions the Internet in only two sections—those dealing with ‘communications decency’ and universal service support for providing Internet access to schools and libraries” (p. 15). And the communications decency portion of the legislation was deemed unconstitutional by the U.S. Supreme Court.

Regulatory Oversight and the 21st Century

Communications policy is created by, and regulated by, several federal agencies. They include (a) the FCC, (b) the FTC, and (c) the Internet Corporation for Assigned Names and Numbers (ICANN).

Federal Communications Commission

Before examining the structure of the FCC, it is important to review its predecessor. The Federal Radio Commission (FRC) was created as a result of the Radio Act of 1927, and its primary role was to establish policy and regulations for the burgeoning radio industry, which included assigning frequencies and issuing licenses. The proliferation of new radio stations and the emergence of television created a need to modify the oversight structure. Accordingly, the Communications Act of 1934 replaced the FRC with the FCC. The FCC’s first day of operation was July 11, 1934, and it has remained in operation since that time as the federal agency responsible for providing regulatory oversight to the telecommunications industry.

Specifically, the role of the FCC is to regulate the telecommunications industry, which includes telephone, telegraph, radio, television, cable, satellite, and videoprogramming distribution. Notably, the FCC does not have regulatory powers over the Internet. Individuals, known as commissioners, serve on the FCC. In 1982, as a result of political partisanship, Congress changed the membership from seven commissioners to five commissioners. The commissioners are all appointed to 5-year terms by the president and go through Senate confirmation prior to serving. There can be no more than three members from any one political party. The president gets to designate one of the five members to serve as chair of the FCC, and this individual serves as the commission’s leader.

Federal Trade Commission

The FTC was created by Congress in 1914 to establish policy and regulations for the advertising industry. There are five commissioners of the FTC who are appointed to 7-year terms by the president and must go through Senate confirmation prior to serving. Like the FCC, there can be no more than three commissioners from the same political party on the FTC at the same time. Hence, the president’s political party most always controls the majority of the membership of the FTC. The responsibility of the FTC is to identify unfair and deceptive advertising practices.

Internet Corporation for Assigned Names and Numbers

The ICANN was created, in 1998, by a Memorandum of Understanding between the U.S. Department of Commerce and the ICANN to provide oversight of the Internet’s unique system of identifiers to the global community. Although the ICANN is not responsible for creating or enforcing any Internet regulatory policy, it does, however, play an essential role in the oversight of the Internet.

Specifically, the ICANN globally coordinates (a) the allocation and assignment of all Internet domain names, (b)Internet protocol and autonomous system numbers, and (c)protocol ports and parameter numbers. The ICANN also coordinates the operation and evolution of the domain name system, root name server system, and it coordinates all policy development related to these technical functions. The ICANN replaced the Internet Assigned Numbers Authority (IANA), which was operated at the University of Southern California through a contract with the Department of Defense. The ICANN maintains a 5-year contract to oversee the Internet, consisting of 1-year renewals.

Regulatory Policies with 21st-Century Implications

Fairness Doctrine

In 1949, in the Report on Editorializing by Broadcast Licensees, the FCC created the Fairness Doctrine. Its objective was to ensure coverage of controversial issues as well as to ensure that multiple viewpoints were provided. The doctrine was modified by Congress in 1959 with Chapter 315(a) of the Communications Act of 1934, by requiring broadcasters not only to provide coverage of controversial issues within the communities to which they were licensed but also to specifically provide multiple viewpoints of the controversial issues through (a) public affairs programming, (b) editorials, and (c) news coverage.

Fairness Doctrine rules also applied to political editorializing. For example, if broadcasters endorsed political candidates, then the opposing candidates were allowed an opportunity to respond to the radio or television station’s political viewpoint. There was much debate about the Fairness Doctrine’s constitutionality. However, in 1969, the U.S. Supreme Court upheld the constitutionality of the Fairness Doctrine in Red Lion Broadcasting Company v. Federal Communications Commission. The Red Lion decision discredited the arguments that the Fairness Doctrine violated First Amendment rights.

Despite the Supreme Court’s decision, the Fairness Doctrine remained a controversial policy. In 1987, the FCC abolished the Fairness Doctrine. Through the Syracuse Peace Council decision, the FCC repealed the Fairness Doctrine on the grounds that it infringed on the First Amendment rights of broadcasters by creating a chilling effect pertaining to coverage of controversial issues. Moreover, the FCC believed that the proliferation of new media had provided adequate additional avenues for expressing contrasting viewpoints.

In an attempt to reinstate the Fairness Doctrine, Congress passed the Fairness in Broadcasting Act of 1987, but President Ronald Reagan vetoed the act. Despite its demise, there is robust debate as to whether the Fairness Doctrine should be reinstated. In 2007, Congress considered reinstating the Fairness Doctrine, but the attempt failed. The political editorial rule remained in effect until 2000, and that aspect of the Fairness Doctrine has not been revisited.

Indecency and Obscenity

Indecent material is legal and is protected by the First Amendment. The U.S. Supreme Court defined indecency in the FCC v. Pacifica Foundation case in 1978. In the Pacifica case, the Court asserted that material was indecent if (a) sexual or excretory organs or activities are depicted and (b) community standards would deem the work to be patently offensive. To further clarify the definition of indecency, the FCC considers the context in which the material was broadcast. The FCC considers (a) how explicit or graphic the material is, (b) if the material only focuses on sexual activity, and (c) if the material is designed to disturb or sexually excite the audience. Due to its subjective nature, both courts and broadcasters have a difficult time determining whether programming falls within the legal parameters.

Media policies have prevented broadcasters from airing obscene, indecent, or profane language since the Radio Act of 1927. The FCC has established hours during the day when indecent material may be aired. These hours are referred to as “safe harbor” hours since they are times when children are least likely to be listening to the radio or watching television. The safe harbor hours are from 10:00 p.m. to 6:00 a.m.

Obscene material is not legal and has no First Amendment protection. One of the first attempts to regulate obscene material took place in 1873, when Congress passed the Comstock Act, which prohibited the mailing of obscene, lewd, or lascivious items relating to contraception and abortion. The act was named after Anthony Comstock, who lobbied Congress to pass the legislation. In 1876, the act was amended to include pornography. Anthony Comstock was appointed as a postal inspector to enforce the act and held the position for 42 years. Even today, it is still against the law to mail any materials deemed obscene.

As courts ruled on obscenity violations, it became clear that there were different applications of the law being applied. Accordingly, the U.S. Supreme Court made a landmark ruling in 1973 that defined whether a material was obscene or indecent. In Miller v. California, the Court asserted that a material is obscene if (a) an average person, applying local community standards, found that the material as a whole appealed to prurient interests, or morbid and shameful sexual thoughts; (b) the material depicts, in a patently offensive manner, sexual conduct; and (c) the material has no literary, artistic, political, or scientific value whatsoever. All three parts must be met before an item is deemed obscene. Again, obscene material does not have First Amendment protection.

Despite the U.S. Supreme Court’s three-pronged definition of obscenity, there still remain confusion and challenges in the legal system regarding whether a material is obscene or not. Moreover, when 21st-century technology is added, things become even more unclear. In 1996, in United States v. Thomas, a federal appellate court upheld the local community standards prong of the Miller test. In this specific situation, a U.S. postal inspector ordered videotapes containing sexually explicit material from an Internet bulletin board.

The Internet bulletin board was based in California, while the postal inspector who ordered the videotape was in Tennessee. As a result of mailing the videotape across state lines, the Internet bulletin board operator was charged in Memphis, Tennessee, and found guilty of distributing obscene material. The Internet bulletin board operator appealed the conviction, asserting that local community standards cannot be applied in this situation since the Internet is not defined to any specific geographic area. The appeals court rejected the argument and reiterated that local community standards apply to obscene materials regardless of the Internet’s uniqueness. Interestingly, although obscene material is illegal to make, sell, exhibit, and distribute, it is not illegal to have obscene material in private possession. Of course, this provision excludes child pornography. The assumption is that the federal government cannot tell people what to watch or read.

Copyright Law

The proliferation of new media in the late 20th and early 21st centuries has created situations where regulation and policy have been developed to address specific needs arising from these technological advancements. In 1790, the first U.S. Congress created a copyright, and it has been modified many times since its original draft. In 1870, the U.S. Congress created the Library of Congress and provided it with the responsibility of serving as archivist and depository of copyrighted materials. There were slight modifications made to the Copyright Act in 1909 that extended the length of time that a material can have copyright laws applied.

In 1976, the Copyright Revision Act was passed by Congress to address the special needs of new technology. However, due to the rapid proliferation of technology, the copyright law eventually faced some shortcomings. New technology such as the Internet required that Congress take another look at modifying the law. In 1998, Congress passed the Digital Millennium Copyright Act (DMCA), which was designed to address the new copyright problems associated with the proliferation of 21st-century media. It was designed to address the copyright issues surrounding digital media and the Internet. The DMCA protects Internet Service Providers (ISPs) from being prosecuted for copyright infringement if subscribers violate the law. Instead, the individual subscriber is held responsible.

With regard to Internet copyright infringement, peer-to-peer file sharing of copyrighted material has been found by the U.S. Supreme Court to be a violation of the law. In previous court decisions, peer-to-peer file-sharing networks such as Napster, Grokster, and Morpheus were found liable for copyright infringement since they knowingly provided a forum for the sole purpose of copyright infringement. Interestingly, the Supreme Court differentiated these peer-to-peer file-sharing networks from Sony’s Video Cassette Recorder (VCR), arguing that the VCR had the ability to offer users options other than just copyright infringement.

Future Directions: 21st-Century Policy Considerations for the Internet

Like the print media, the Internet has full First Amendment rights and remains unregulated by the FCC. The ICANN is responsible for assigning domain names and providing some standardization to the Internet for the global multitude of computers to communicate with each other creating networks. Although the Telecommunications Act of 1996 contained the CDA, which prohibited the distribution of obscene, indecent, or patently offensive material to children, as noted earlier, the U.S. Supreme Court reviewed the constitutionality of the CDA and found it to be an infringement on First Amendment rights. In Reno v. ACLU (1997), the U.S. Supreme Court noted that the Internet is not a scarce commodity such as broadcast frequencies. Instead, the Supreme Court noted that parents had an option to not subscribe to Internet services if they did not want their children to be exposed to indecent material. The Supreme Court asserted the Internet was not as invasive as broadcasting.

In 2005, in National Cable & Telecommunications Association v. Brand X Internet Services (125 S. Ct. 2688), the U.S. Supreme Court ruled that the ISPs are not regulated by the FCC. Despite efforts by the Telecommunications Act of 1996 to deregulate the communications industry and encourage marketplace competition to lower prices for consumers, the U.S. Supreme Court ruled this aspect of the act unconstitutional. With regard to an ISP and a cable television company, the Court ruled that the FCC cannot require cable television companies to lease their cable lines to external ISPs in order to offer consumers additional Internet service options via cable modems. The FCC initially reasoned that additional competition would produce competitive rates.

Internet advertising has limited regulation. The FCC and the FTC provide regulatory oversight to both the Internet and broadcast advertising industries. Several policies have been passed by Congress to help regulate Internet advertising. In 2003, Congress passed the Controlling the Assault of Non-Solicited Pornography and Marketing (CAN-SPAM) Act, which was designed to prevent unwanted electronic mail advertising, referred to as spam. The CAN-SPAM Act prohibits false identity headers in electronic mail and requires that electronic mail advertisements have unsubscribe, or opt out, options available to consumers. Unlabeled pornographic material was also prohibited from being sent to consumers under the CAN-SPAM Act.

In 2005, several states passed legislation that prohibited Internet advertisers from embedding spyware software on consumer computers. Spyware is software that remotely attaches itself to consumer computers and obtains personal information about the Internet habits of consumers in an effort to target advertising that might interest consumers based on previous Internet usage patterns. Spyware software also has the potential to allow for theft of personal information from computer hard drives. Accordingly, most states have passed legislation prohibiting spyware software from attaching itself to computers without the consumer’s knowledge and permission.

To protect intellectual property, or copyrights, there was a global, multilateral approach to regulating this aspect of the Internet. The World Intellectual Property Organization (WIPO) Performances and Phonograms Treaty of 1996 was adopted by 171 countries around the world. The WIPO was designed to enforce copyright laws around the globe and officially applied international copyright law to the Internet. Although this was an important first step in enforcing copyright law on the Internet, Eko (2001) stated that “given the fundamental cultural and legal differences among nations with respect to certain aspects of intellectual property and moral rights, the harmonization of different, even conflicting intellectual property law regimes on the Internet is still a work in progress” (p. 456).

Global Comparison

The United Nations is examining the manner in which the United States regulates the Internet in a way that might encroach on Internet usage in other countries around the world. McChesney (2004) asserted, “Linked closely with the tempestuous negotiations surrounding global and regional trade deals and economic agreements, the future of the Internet is anything but certain” (p. 220). In 2005, at the World Summit on the Information Society, nations discussed the governance of the Internet and whether the United States should remain in charge of key Internet governance issues.

The European Union was not comfortable with the United States having unilateral control of the Internet through the ICANN and instead preferred a more multilateral approach to Internet governance. Geist (2005) stated,

It is difficult to fault the European Union and other foreign governments for expressing discomfort with a system that grants ultimate control over the Internet to a single government. Dozens of countries, including Canada, have identified the Internet as a critical public resource that plays an essential role in commerce, communication, and delivery of social services. While it is unlikely the U.S. would shut down the domain name system of another country, the threat that such a power exists is justifiably worrisome to many government leaders. (p. D03)

Despite the controversy surrounding Internet policy development and regulation on a global scale, Eko (2001) stated,

The nations of the world find themselves struggling to develop regulations and policies for a medium that has been so successful in inter-connecting computer networks around the world in such a short time that policy makers have not had the time to think through the complex implications of the technology on international communication, commerce, economic development and cultural exchanges. (p. 447)

Thus, the basic foundation for a regulatory structure and ancillary policies for the Internet in the 21st century remains a work in progress.

21st Century Regulation: Marketplace Forces versus Government Oversight

In the 1920s, when the radio industry requested the government to intervene and provide regulatory oversight to minimize the confusion of frequency crowding, it was indeed an unprecedented move by a market-driven, commercial industry. What started as an unbiased mediator for broadcasters in the 1920s has blossomed into a juggernaut with an established regulatory agency, known as the FCC, which wields an enormous amount of regulatory influence and oversight.

There have been cycles of increased regulation and cycles of deregulation by the FCC. There has been, and remains, a very robust debate surrounding the continued need for government regulation of the telecommunications industry in the 21st century. Although the mid-1990s brought deregulation to the telecommunications industry in a major new policy, some observers believe that additional policies to deregulate are still needed. Maxwell (2005) asserted,

The 1996 Act made positive contributions to the telecommunications industry, particularly by facilitating competition in local telecommunications. But it was built on a foundation of legal and regulatory categories created over the preceding 60 years that have grown increasingly inconsistent with today’s marketplace. These inconsistencies now stand as a barrier to even more competition and even greater innovation. And while the Act was avowedly deregulatory, the FCC created more regulations than it eliminated, in effect attempting to stimulate competition while, at the same time, managing it. (p. 5)

McChesney (2004) observed that media policy is very important in the development of media industries and argues that policy created by and implemented by the federal government is what creates and perpetuates technological advancements. For example, the government created radio, satellite, and Internet technologies and then gave those innovations to the commercial industry. To illustrate the important role media policy plays in the development of new technology, the development of highdefinition television, or digital television, is used as an example. McChesney suggested that high-definition television channels could have doubled the number of channels from which the public could choose; instead, the National Association of Broadcasters (NAB) successfully lobbied Congress to give the digital channels to existing television station owners to broadcast existing analog content side by side, thus reducing competition and reducing additional options for consumers.

Even though the government created the new technologies and stabilized them before handing them over to media industry leaders, McChesney (2004) further asserted that “any future efforts to exact public service from the huge firms granted all these privileges will be dismissed as a callous attempt by the government to interfere with the free market” (p. 215).

McChesney (2004) suggested that despite regulatory attempts to create a media environment that encourages competition and promotes more options for consumers, an oligopoly has been created instead where only a few conglomerates control the media. Accordingly, this environment reduces competition and reduces more options for consumers. McChesney stated,

It means that media markets may “give the people what they want,” but will do so strictly within the limited range of fare that can generate the greatest profits. The more competitive the market, in economic theory, the more control consumers have over expanding that range. The argument in oligopolistic markets becomes circular: people consume from a relatively narrow range of what media firms find most lucrative to produce; then when consumers select from these options, the firms say, “See, we must be giving you what you want.” (p. 199)

In contrast, Maxwell (2005) stated,

Anti-competitive acts should be prevented, and the industry should draw upon the lessons of the Internet in promoting open systems, such as ensuring that all of the disparate platforms can be interconnected. A key component of policy in the new era of telecommunications will be the principles of openness—openness regarding platforms, network attachments, applications, and content—and the prevention of unreasonable discrimination that reduces openness. (p. 33)


From a policy and regulatory perspective, the Internet has become and will remain a major force in the 21st century. Every policy developed and every regulatory action taken both within the United States and by other nations around the globe must account for the Internet. The Internet and ancillary technological advancements of new media have altered the traditional manner in which media policies and regulations occur.

Past regulatory efforts have focused on media that were confined to specific geographic regions or nations. The Internet has completely changed this paradigm of media policy development and media regulatory attempts. The Internet has no geographic boundaries, and enforcing policies is oftentimes difficult, if not impossible. Due to the global nature of the Internet and its lack of geographic boundaries, nations are changing the way in which regulatory policy development is approached. Regarding global Internet regulatory attempts, May, Chen, and Wen (2004) noted that the “movement toward global regulation of Internet activity is not an easy task. Rooted in each state are cultural, political, social and economic differences that impact approaches and perspectives on regulation and regulatory methods” (p. 260).

The proliferation of new media and the rapid advancements of technology are changing the way in which consumers obtain news, listen to music, and even watch television. In 2007, the Internet World Usage Stats reported that more than 1.1 billion people worldwide were accessing the Internet and the worldwide Internet penetration is at 16%. Although the United States has the largest number of Internet users, there are still significant numbers of users from every corner of the globe who are quickly adopting new technologies, and these new Internet users bring cultural and language barriers to the policy table for consideration. These numbers and demographics are expected to continue to increase as technology becomes more affordable and even more user-friendly. Thus, there will be a need for a multilateral approach to regulation and policy development of the Internet in the 21st century. Some nations argue that nongovernmental regulatory agencies such as the ICANN should not have complete authority to oversee the Internet outside the United States. Some nations have challenged its mission.

In 1999, William E. Kennard, the chairman of the FCC at the time, delivered a report to Congress titled A New Federal Communications Commission for the 21st Century. The report noted that technological advancements had changed the landscape of media regulation and policy development and that the FCC needed to modify the manner in which it approaches its mission in the 21st century. The report stated that those core functions included (a)providing universal service and access to all citizens, (b) consumer protection and privacy, (c) promotion of pro-competitive goals both domestically and globally, and (d) oversight of the electromagnetic spectrum. The report stated, “In the [media] marketplace of tomorrow, it is expected that traditional industry structures will cease to exist” (p. 3).