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Robert of Man Without Qualities comments on the public choice problems of the recent "Third Way" proposal on net neutrality.
But perhaps the most disturbing aspect of this "Third Way" is the complete absence of any considerations pertaining to the regulatory capture issues that would be raised by the scheme itself. It's all very nice to say that the FCC (or any agency) will do this or that nice thing to the people and firms it regulates. But history shows that's not how things often work out in practice. Just what are the likely regulatory (and lobbying!) incentives that might be created by a scheme that couples big federal financial give-aways with lots of authority by a (captured) FCC to exclude competitors in the market it was supposed to facilitate? One shudders to imagine. But one shudders more to realize that the authors of this "Third Way" haven't even bothered to try to imagine - or at least to write about it here. Has the history of FCC protected competition been better than the competitive history of the unregulated internet? I don't think so. For an answer, look at Tom Hazlett's article The Wireless Craze, the Unlimited Bandwidth Myth, the Spectrum Auction Faux Pas, and the Punchline to Ronald Coase's "Bigt Joke" (2001), which details the dreary history of the FCC's success in suppressing new technologies (pp. 405-451).
posted by James DeLong @ 5:41 PM | Telecom
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