Chapter | Preventing Regulatory Capture: Special Interest Influence and How to Limit It | 2013

Capturing History: The Case of the Federal Radio Commission in 1927

by David Moss and Jonathan Lackow

Abstract

In the study of regulation (and political economy more generally), there is a danger that historical inferences from theory may infect historical tests of theory. It is imperative, therefore, that historical tests always involve a vigorous search not only for confirming evidence, but for disconfirming evidence as well. We undertake such a search in the context of a single well-known case: the Federal Radio Commission's (FRC) 1927 decision not to expand the broadcast radio band. The standard account of this decision holds that incumbent broadcasters opposed expansion (to avoid increased competition) and succeeded in capturing the FRC. Although successful broadcaster opposition may be taken as confirming evidence for this interpretation, our review of the record reveals even stronger disconfirming evidence. In particular, we find that every major interest group, not just radio broadcasters, publicly opposed expansion of the band in 1927, and that the broadcasters themselves were divided at the FRC's hearings.

Keywords: Capture; History by Inference; Economic Theory of Regulation; Federal Radio Commission; United States;

Citation:

Moss, David, and Jonathan Lackow. "Capturing History: The Case of the Federal Radio Commission in 1927." Chap. 8 in Preventing Regulatory Capture: Special Interest Influence and How to Limit It, edited by Daniel Carpenter and David Moss. Cambridge: Cambridge University Press, 2013.