The Federal Communications Commission’s (FCC) recently issued notice calling for a review of the agency’s broadcast-ownership rules raises a foundational question: what purpose do these rules serve in a world of digital abundance?
Indeed, FCC Chair Brendan Carr has observed the fundamental changes in how broadcasters compete in a marketplace of “numerous online audio and video streaming services.” But in this post, we take the question a step further with a thought experiment: If we began with a clean slate, would we create any of the regulations that currently exist?
A Clean Slate
Imagine a world where over-the-air broadcasting technology—the transmission of radio and television signals through the airwaves—was invented not in the early 20th century, but today.
In this 2025 alternate reality, consumers are already served by a mature and competitive market for audio and video content delivered over the internet. Streaming services, podcasts, and websites offer a virtually unlimited selection of on-demand news and entertainment.
But then, one day, scientists develop a novel method to send a single video or audio stream to an entire metropolitan area via radio waves. How would we react?
Would policymakers conclude that this new technology required a sweeping reallocation of radio spectrum, pulling it away from 5G mobile networks and Wi-Fi? Would they impose caps on how many of these new broadcast stations one company could own? Would they mandate that existing distributors like cable or satellite companies—or internet providers or streaming services—must carry these new signals?
The answer to these questions is almost certainly no.
In a world of digital abundance, a one-to-many, linear-distribution technology would be seen as a niche supplement, not a foundational element of the media landscape that would require its own unique and burdensome regulatory framework.
Of course, we currently live in such a world of digital abundance. The FCC reports that 95% of homes and small businesses have access to high-speed terrestrial internet (100/20 Mbps) and 92% have access to 5G mobile service. This is further supplemented by the near-total availability of satellite internet from providers like Starlink, which reaches 99.8% of U.S. households. Nearly every American has access to instant, high-quality streaming of 4K video, interactive gaming, and immersive augmented- and/or virtual-reality experiences at home, at work, and on the go.
Yet the existing system of broadcast regulation in the United States is predicated on the opposite assumption that broadcasting is a uniquely powerful and central medium that must be constrained and controlled in the “public interest.”
I posit that, if broadcasting were a brand-new technology rather than a long-established industry, three core pillars of broadcast regulation would quickly collapse: spectrum allocation based on the public-interest standard, media-ownership limits, and the must-carry/retransmission-consent rules.
Viewed through this “clean slate” lens, these regulations appear not as necessary safeguards for the public, but as historical artifacts that solve problems of technological scarcity that no longer exist. They now function primarily to hinder broadcasters’ ability to adapt and compete against their largely unregulated digital competitors.
A rational approach to reform would not involve tinkering with these rules at the margins. It would involve their complete removal, clearing the way for a more dynamic and competitive media market governed by the standard laws of property, contract, and antitrust that apply to other industries.
Spectrum Allocation in a Digital World
The key question for our hypothetical new broadcast technology is whether the government would—or should—allocate a significant portion of the radio spectrum for that nascent industry’s use at no charge to the broadcasters. From an economic perspective, such a reallocation would be difficult to justify.
Radio spectrum—the range of electromagnetic frequencies used for wireless communication—is a scarce and immensely valuable resource. Every decision to use a block of spectrum for one purpose carries an opportunity cost, which is the value of the next-best foregone alternative use.
In 2025, spectrum is used intensively for services that generate hundreds of billions of dollars in economic value and are central to the modern economy. Mobile broadband networks, such as 5G, use wide swaths of spectrum to connect smartphones, homes, and businesses to the internet. FCC auctions have seen wireless carriers pay more than $100 billion for spectrum licenses, a direct market signal of its value in these uses.
Unlicensed spectrum bands support Wi-Fi, Bluetooth, and the “Internet of Things” (IoT), creating what the Wi-Fi Alliance estimates is nearly $1 trillion in annual economic value in the United States alone. Other portions of the spectrum are critical for public-safety communications (such as the FirstNet network), GPS navigation, satellite services, and emerging technologies like autonomous vehicles.
To introduce over-the-air broadcasting into this environment would require taking spectrum away from these high-value in-demand uses. The opportunity cost would be immense.
The UHF television band, for example, occupies spectrum with excellent propagation characteristics, making it highly desirable for mobile broadband. Based on prices from the FCC’s 2017 incentive auction, where broadcasters voluntarily sold spectrum that was then auctioned to wireless providers, the spectrum currently used for television broadcasting is worth tens, if not hundreds, of billions of dollars more in mobile uses.
Forcing this resource into a lower-value use destroys wealth and slows innovation. That 2017 auction revealed a fundamental value mismatch: wireless carriers paid nearly $20 billion for spectrum that broadcasters were willing to relinquish for about $10 billion. In a world with ubiquitous internet, over-the-air broadcasting offers few unique benefits to justify this cost.
Internet-based distribution is superior in nearly every dimension that consumers value. It provides vastly more content choice, on-demand access, personalization, and interactivity. Broadcast technology is a one-way, one-to-many system that is technologically inferior for most modern media consumption. Its lone potential advantage—efficiency for mass simultaneous viewing, such as the Super Bowl—is of declining relevance as content delivery networks (CDNs) and other internet technologies become more sophisticated at handling viewership peaks.
Even so, as we noted in an earlier post, this year’s Super Bowl game was broadcast live on the Fox network and streamed on Tubi and Fubo. The Academy Awards ceremony was broadcast on ABC and streamed on Hulu, as well as on internet-based services that offer live streaming of ABC, such as Hulu + Live TV, YouTubeTV, AT&T TV, and FuboTV. Moreover, for the vast majority of viewing, where different people watch different things at different times, broadcasting’s efficiency advantage disappears entirely.
Consumer behavior provides the strongest evidence against reallocation. Nielsen data from 2025 shows that streaming accounts for 46% of household television viewing time, more than double the 19% share of broadcast. Ad-supported audio accounts for only 64% of listening time, and radio accounts for only 64% of that. That means radio itself accounts for just 41% of consumer listening time.
This is evidence of consumers’ revealed preferences. Even with broadcast available for free, consumers are increasingly choosing to pay for streaming services that offer a better experience. A market-based allocation of spectrum would reflect these preferences.
If we were to allocate spectrum from a clean slate, the most efficient method would be through open, competitive auctions with flexible-use rights—a system championed by the late Nobel laureate Ronald Coase. The government’s role would be to define the property rights to a given spectrum block and prevent interference, but the market would determine its highest-value use. A company that believed it could generate sufficient value from broadcasting could bid for spectrum against a wireless carrier or a satellite company. The winner would be the entity that could put the resource to its most productive use, as measured by its willingness to pay. That willingness to pay would, in turn, be driven by consumer demand for the broadcast service.
One might argue that broadcasting serves public goals, like providing emergency alerts or access for those without access to the internet. These arguments, however, justify only a minuscule allocation, if any at all. A single dedicated channel for emergency alerts—akin to the existing NOAA Weather Radio service—would require a tiny fraction of the spectrum currently reserved for radio and television.
For universal-service concerns, a direct subsidy to low-income households to afford internet access would be far more efficient and provide recipients with access to a world of information, not just a few dozen broadcast channels.
Would We Recreate the Old Rules for the New Broadcasters?
If we began with a clean slate, would we subject station operators to the unique ownership limits, public-interest obligations, and carriage rules that exist today?
The logic of our thought experiment suggests we would not. These rules were designed for a bygone era of information scarcity and are wholly unsuited to the modern competitive landscape. Applying them today would be like requiring a new electric-vehicle manufacturer to install tailpipes on their EVs.
Ownership Caps out the Door
Current FCC rules strictly limit the number of television and radio stations a single entity can own, both nationwide and within a single local market. For example, a single company may not own television stations that collectively reach more than 39% of U.S. households.
The primary rationale for these rules was to promote viewpoint diversity and foster “localism.” When three television networks represented the dominant source of news and information for most Americans, limiting concentration was seen as a way to ensure a variety of voices on the public airwaves.
This scarcity-based rationale has been rendered obsolete by technology. The internet provides access to a practically infinite range of viewpoints from sources around the globe. To argue that limiting a single company from owning television stations in Los Angeles and New York is necessary in order to protect viewpoint diversity is to ignore the existence of YouTube, thousands of online news sites, social media, and podcasts.
Consumers don’t suffer from a scarcity of voices. Rather, they are challenged with navigating an seemingly overabundant number of them. As we reported earlier, with more than 200 streaming platforms available, Nielsen indicates that households spend an average of more than 10 minutes a day simply searching for something to watch
In a clean-slate world, ownership caps would serve no purpose other than to handicap the new broadcast industry. The rules prevent broadcasters from achieving the scale necessary to compete effectively with national and global streaming giants like YouTube, Netflix, Amazon, and Disney, who face no such ownership restrictions. Prohibiting a broadcast company from merging to gain national scale, while allowing tech companies to grow to massive proportions, creates a competitively distorted market.
The proper tool to address concerns about excessive market concentration is not industry-specific ownership caps, but general antitrust law. The Department of Justice and the Federal Trade Commission already review mergers for their potential effects on competition. This standard approach allows for a case-by-case analysis of market power based on actual competitive conditions, rather than relying on arbitrary numerical limits set by a regulator or adherence to a nebulous “public interest” standard. If a merger of two broadcast groups would harm competition in a specific market for, say, local advertising, antitrust law is fully equipped to block it.
Taking the ‘Public Interest’ Standard to the Trash Pile
Since the Radio Act of 1927, broadcasters have been licensed to use the public airwaves on the condition that they serve the “public interest, convenience, and necessity.”
In practice, the FCC has translated this vague mandate into a set of specific content and operational requirements. These have included obligations to air a certain amount of children’s educational programming, provide equal time to political candidates, maintain records of their public-service activities for public inspection, and adhere to indecency standards.
These obligations impose direct compliance costs on broadcasters that their digital competitors do not bear. A streaming service is not required to air three hours of educational programming per week, and a podcast is not subject to political-advertising rate regulations. This asymmetry puts broadcasters at a distinct disadvantage.
In our thought experiment, imposing a “public interest” standard on newly invented broadcast stations would be illogical. What public interest is served by forcing a broadcaster to air specific types of content when consumers can already access a boundless supply of that content online? If parents seek educational programming for their children, they can choose from dedicated services like PBS Kids, Amazon Kids+, or countless YouTube channels. They do not depend on a local broadcast affiliate.
Furthermore, the standard itself is problematic. The idea that a panel of three to five presidentially appointed FCC commissioners in Washington can better determine the “public interest” than the public itself—through its viewing choices in a competitive market—is a relic of progressive-era central planning. In reality, the vague standard invites regulatory capture and rent seeking, where politically connected groups lobby the FCC to define the public interest in ways that benefit them, rather than the public at-large.
If a particular type of content, such as local news, is deemed a public good that the market underproduces, the economically efficient solution is a direct and transparent subsidy. A tax credit for hiring local journalists, for example, would be a more targeted and effective policy than conditioning a broadcast license on vague promises to cover community affairs.
Freeing broadcasters from the public-interest standard would not mean an end to public service. Moreover, public-service programming is worthless if no one watches it. It is worth even less when it is readily available at any time on the internet.
‘Must Carry’ and Retransmission Consent Relegated to the History Books
Perhaps the most vexing and economically distorting broadcast regulations are the must-carry and retransmission-consent rules established by the Cable Act of 1992.
- Must carry requires cable-television providers to carry the signals of local broadcast stations.
- Retransmission consent is the alternative: a broadcaster can waive its must-carry right and instead demand payment from the cable provider in exchange for permission to carry its signal.
The justification for this regime was the “cable bottleneck.” In the early 1990s, most homes received television through a single monopoly cable provider. Congress feared that these providers could use their gatekeeper power to refuse to carry broadcast stations, threatening their viability. But in 2009, the U.S. Circuit Court of Appeals for the D.C. Circuit concluded in Comcast v. FCC that:
Cable operators… no longer have the bottleneck power over programming that concerned the Congress in 1992.
In our 2025 thought experiment, this bottleneck does not exist. A newly launched broadcast station would not depend on a single cable company for distribution. It could distribute its content directly to consumers through its own website or app or partner with existing streaming platforms. Consumers, in turn, are not captive to a single provider; they can choose among cable, satellite, and a host of internet-based video distributors.
Without the bottleneck problem, the entire rationale for must carry and retransmission consent collapses. These rules become a solution in search of a problem.
If a broadcaster’s programming is valuable, distributors will want to carry it to attract and retain subscribers, and they will negotiate for the rights to do so voluntarily. If the programming is not valuable, it should not be carried. This is how the market works for every other form of content, from ESPN to HBO to the Smithsonian Channel. There is no economic reason to create a special regulatory regime for broadcasters.
In the real world, these legacy rules actively harm consumers and distort the market. Must carry forces distributors to use scarce channel capacity on unpopular stations, preventing them from offering programming that consumers might value more. Retransmission consent has morphed into a system where broadcasters collect nearly $15 billion annually from distributors, with that cost passed to consumers in the form of higher cable and satellite bills. This has led to contentious negotiations, signal blackouts that harm viewers, and a regulatory framework that advantages incumbent broadcasters over other content creators.
If we were starting from scratch, the relationship between broadcasters and distributors would be governed by private contract and copyright law. A broadcaster’s intellectual property is already protected by copyright. If a distributor wants to carry that content, it must secure a license. The terms of that license would be determined by voluntary negotiation. This simple and efficient framework is all that’s needed.
A Path to Pro-Competitive Reform
The thought experiment of inventing broadcasting today leads to a clear conclusion: the regulatory structure that governs the industry is an anachronism.
We would not allocate vast amounts of high-value spectrum to broadcasting at no charge. We would not impose arbitrary ownership caps or vague public-interest obligations. We would not create a complex and coercive carriage regime like must carry and retransmission consent.
Instead, we would treat broadcasting like any other technology for content distribution. Broadcasters would acquire spectrum in competitive auctions if they could use it to its highest value. They would be free to structure their businesses and achieve scale, governed by general antitrust principles. Their relationships with distributors would be based on voluntary contracts.
The current regulatory framework shackles broadcasters to a 20th century business model and prevents them from adapting to a 21st century competitive environment. Freeing broadcasters from these legacy rules would eliminate the regulatory asymmetry between them and their lightly regulated streaming competitors. It would allow them to innovate, achieve efficiencies of scale, and focus on their core mission: creating compelling content that consumers value.
Rather than managing their decline through archaic regulation, policymakers should enable their evolution by embracing comprehensive reform.
