Posts Tagged ‘regulation’
“All history is the history of unintended consequences”*…
Your correspondent confesses that this piece is mildly geeky in an “inside baseball” kind of way. But beyond its importance in its own right, it raises a possible broader systemic issue worth pondering…
Urged on by broadband giants such as Charter Communications, Senate Majority Leader Mitch McConnell (R-KY) is pushing to confirm a Republican to the Federal Communications Commission. However, McConnell’s goal seems to extend further: creating a deadlocked Biden FCC 2–2, then blocking confirmation of a third Democrat. What McConnell intends as a gift to his corporate patrons could turn into a nightmare for them.
McConnell and his allies believe they can force the Biden FCC into a business friendly “consensus agenda” that will move forward on 5G and corporate consolidation while blocking Democratic priorities such as net neutrality and broadband subsidies for the poor. And perhaps that is how the Democrats will respond. But in this new world of total war between Democrats and Republicans, this deadlock creates the incentive and ability for the Democratic FCC Chair to use her authority over the agency’s bureaus to push back and pressure anyone standing in the way of a full commission.
Not everything at the FCC requires a vote of the Commission. The vast majority of day-to-day work happens through the FCC’s many offices and bureaus — all of which report to the Chair. These actions must be appealed to the full Commission before parties can go to the courts. Absent the usual rulemaking process, a Democratic FCC Chair can — and should — take large (and largely unreviewable) steps to advance a consumer protection agenda without a single Commission vote.
Even more powerfully, the Chair can effectively shut down the agency until Republicans approve a third Democrat. While this sounds like an industry dream, this would quickly devolve into an industry nightmare as the necessary work of the FCC grinds to a halt. Virtually every acquisition by a cable provider, wireless carrier, or broadcaster requires FCC approval. Unlike in antitrust law, there is no deadline for the agency to act. The Chair of a deadlocked FCC could simply freeze all mergers and acquisitions in the sector until Democrats have a majority.
If that does not work, the FCC Chair could essentially put the FCC “on strike,” cancelling upcoming spectrum auctions and suspending consumer electronics certifications (no electronic equipment of any type, from smartphones to home computers to microwave ovens, can be sold in the United States without a certification from the FCC that it will not interfere with wireless communications). Such actions would have wide repercussions for the wireless, electronics, and retail industries. But the FCC Chair could slowly ratchet up the pressure until industry lobbyists pushed Republicans to confirm a third Democrat.
Finally, we come to net neutrality. Stopping the Biden FCC from restoring the Obama-era legal framework for broadband is the grand prize that supposedly justifies McConnell’s unprecedented obstructionism. Even here, the next FCC Chair can act. At present, the FCC is suing the state of California to block California’s own net neutrality law. The FCC can switch sides in the litigation, throwing its weight against the industry and supporting the right of states to pass their own net neutrality laws. The FCC can do the same in the D.C. Circuit — no Commission vote required.
Political observers might question whether a Biden FCC Chair would take such brazenly political action and put at risk so much of the economy. Admittedly, Democrats often seem to lack the same willingness as Republicans to engage in Mutually Assured Destruction. But we live in a time of unprecedented polarization and partisan division — as the last-minute campaign to deadlock the FCC shows. The only way for President-elect Biden and Democrats to work with Republicans is to show them at the outset that they can be just as destructive to Republican interests and constituencies as Republicans are to Democratic interests and constituencies. And there’s no better way to do that than to threaten the corporate chieftains at the top of the Republican food chain, the ones currently urging Republicans to deadlock the FCC.
Rather than an industry-friendly “consensus agenda,” Senator McConnell and his Wall Street allies are setting the stage for a war of total destruction. Wise investors should sell now and wait for the dust to clear — if it ever does.
Harold Feld (@haroldfeld), Senior Vice President of Public Knowledge, on how Senator McConnell’s strategy of obstruction might backfire: “In the Republican War on the Biden FCC, Wall Street May End Up the Biggest Loser.”
* historian T.J. Jackson Lears
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As we focus on Georgia, we might recall that it was on this date in 1948 that the United Nations adopted the Universal Declaration of Human Rights. Of the 58 members of the U.N. at the time, 48 voted in favor, none against, eight abstained, and two did not vote. Considered a foundational text in the history of human and civil rights, the Declaration consists of 30 articles detailing an individual’s “basic rights and fundamental freedoms” and affirming their universal character as inherent, inalienable, and applicable to all human beings.
The full text– eminently worth reading– is here.
“The Net is the new underlying infrastructure for civilization itself”*…
Most governments have traditionally argued that there are certain critical societal assets that should be built, managed, and controlled by public entities — think streets, airports, fire fighting, parks, policing, tunnels, an army. (And in just about every rich country except this one, access to and/or the provision of health care.) The choice to have, say, a city-owned park reflects two key facts: first, a civic judgment that having green outdoor spaces is important to the city; and second, that free parks open to all are unlikely to be produced by private companies driven by a motive for profit.
When it comes to the Internet we all live on, huge swaths of it are owned, controlled, and operated by private companies — companies like Facebook, Google, Amazon, Apple, Microsoft, and Twitter. In many cases, those companies’ public impacts aren’t in any significant conflict with their private motivations for profit. But in some cases… they are. Is there room for a public infrastructure that can offer an alternative to (or reduce the harm done by) those tech giants?
A diagnosis of the issue with a set of proposed remedies: “Public infrastructure isn’t just bridges and water mains: Here’s an argument for extending the concept to digital spaces.”
This article is based on a piece by Ethan Zuckerman, written for the Knight First Amendment Institute at Columbia, in which he lays out what he calls the case for digital public infrastructure. (He also published a summary of it here.)
Pair with this consideration of another piece of our political/social/economic “infrastructure,” corporate law, and its effects– contract, property, collateral, trust, corporate, and bankruptcy law, an “empire of law”: “How ‘Big Law’ Makes Big Money.”
* Doc Searles
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As we contemplate the commons, we might recall that it was on this date in 1865 that the U.S. government dismantled a monstrous piece of “infrastructure” when Congress passed the Thirteenth Amendment to the United States Constitution and submitted it to the states for ratification.
The amendment abolished slavery with the declaration: “Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.”

Thomas Nast’s engraving, “Emancipation,” 1865
“These days, the bigger the company, the less you can figure out what it does”*…
Late 19th-century Americans loved railroads, which seemed to eradicate time and space, moving goods and people more cheaply and more conveniently than ever before. And they feared railroads because in most of the country it was impossible to do business without them.
Businesses, and the republic itself, seemed to be at the mercy of the monopoly power of railroad corporations. American farmers, businessmen and consumers thought of competition as a way to ensure fairness in the marketplace. But with no real competitors over many routes, railroads could charge different rates to different customers. This power to decide economic winners and losers threatened not only individual businesses but also the conditions that sustained the republic.
That may sound familiar. As a historian of that first Gilded Age, I see parallels between the power of the railroads and today’s internet giants like Verizon and Comcast. The current regulators – the Federal Communications Commission’s Republican majority – and many of its critics both embrace a solution that 19th-century Americans tried and dismissed: market competition…
The current controversy about the monopolistic power of internet service providers echoes those concerns from the first Gilded Age. As anti-monopolists did in the 19th century, advocates of an open internet argue that regulation will advance competition by creating a level playing field for all comers, big and small, resulting in more innovation and better products. (There was even a radical, if short-lived, proposal to nationalize high-speed wireless service.)
However, no proposed regulations for an open internet address the existing power of either the service providers or the “Big Five” internet giants: Apple, Amazon, Facebook, Google and Microsoft. Like Standard Oil, they have the power to wring enormous advantages from the internet service providers, to the detriment of smaller competitors.
The most important element of the debate – both then and now – is not the particular regulations that are or are not enacted. What’s crucial is the wider concerns about the effects on society. The Gilded Age’s anti-monopolists had political and moral concerns, not economic ones. They believed, as many in the U.S. still do, that a democracy’s economy should be judged not only – nor even primarily – by its financial output. Rather, success is how well it sustains the ideals, values and engaged citizenship on which free societies depend.
When monopoly threatens something as fundamental as the free circulation of information and the equal access of citizens to technologies central to their daily life, the issues are no longer economic.
Stanford historian Richard White unpacks an important historical analogue; read it in full at “For tech giants, a cautionary tale from 19th century railroads on the limits of competition.”
[Image above: source]
* Michel Faber, The Book of Strange New Things
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As we wonder if The Invisible Hand is giving us the finger, we might recall that it was on this date in 1852 that Henry Wells and William G. Fargo joined with several other investors to launch their eponymously-named cross-country freight business. The California gold rush had created an explosive new need, which Wells, Fargo and other “pony express” and stage lines leapt to meet. It was after the Civil War, in 1866, when Wells, Fargo acquired many of their competitors, that it became the dominant supplier. (Ever flexible, they adapted again three years later, when the transcontinental railroad was finished.)
From it’s earliest days, it also functioned as a bank, factoring the shipments of gold that it carried. Indeed, when Wells, Fargo exited the freight business as a result of government nationalization of freight during World War I, the bank (which merged with Nevada National in the first of a series of “transformative transactions”) continued to operate as “Wells, Fargo,” as indeed it does (albeit under unrecognizably evolved ownership) today.
“I’ve seen zero evidence of any nation on Earth other than Mexico even remotely having the slightest clue what Mexican food is about”*…
Still, we try…
Americans love the genre of cuisine generally known as “Mexican food”. The cuisine of our southern neighbor has been ingrained in our culture since the early 20th century. In many respects, it has evolved beyond its origins to become something uniquely American (think Tex-Mex and giant breakfast burritos).
You can find it anywhere, from just across the border to the farthest corners of our northern states. This presents a great opportunity to explore which parts of the country offer the most for Mexican food aficionados. Which city has the most Mexican restaurants? Do some regions of the United States exhibit any preferences for tacos versus burritos?…
Follow the data at: “Tacos vs Burritos Index: The Great Divide in Mexican-American Cuisine.”
* “I’ve seen zero evidence of any nation on Earth other than Mexico even remotely having the slightest clue what Mexican food is about or even come close to reproducing it. It is perhaps the most misunderstood country and cuisine on Earth.” – Anthony Bourdain
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As we’re careful not to double dip, we might recall that it was on this date in 2008 that Governor Arnold Schwarzenegger signed legislation making California the first state to ban trans fats in restaurants and retail food establishments. The ban went into into effect on January 1, 2010. Other states followed suit, and in 2015, the FDA moved to ban trans fats across the nation. Trans fats have been shown to consistently be associated with increased risk of coronary artery disease, a leading cause of death in Western nations.
Oh, and Happy Hot Fudge Sundae Day!