Posted on January 15th, 2009 in Life, Politics and Law, Technology | No Comments »
Last month, Jim Harper started an interesting discussion on regulation around the holidays. Although I was hiding from my computer in an attempt to take a vacation at the time I have finally caught up with the discussion. If you happen to have missed this as well, I think it’s well worth reading.
What Burnett meant when she called for a “real” regulator, of course, was “the regulator I can imagine.” The regulators people imagine are foresighted, interested only in the public good, they’re resistant to lobbying, and they run efficient organizations. But these characteristics are simply imaginary.
Too many advocates of regulation seem to have never considered the possibility that the FCC bureaucrats in charge of making these decisions at any point in time might be lazy, incompetent, technically confused, or biased in favor of industry incumbents. That’s often what “real regulators” are like, and it’s important that when policy makers are crafting regulatory scheme, they assume that some of the people administering the law will have these kinds of flaws, rather than imagining that the rules they right will be applied by infallible philosopher-kings.
The FCC is designed to ensure (theoretically) that these bureaucrats are independent, but if you take a look at what is actually happening, then it becomes clear that independence is in many ways imaginary. The FCC’s website describes the organization of the Commissioners as follows:
The FCC is directed by five Commissioners appointed by the President and confirmed by the Senate for 5-year terms, except when filling an unexpired term. The President designates one of the Commissioners to serve as Chairperson. Only three Commissioners may be members of the same political party. None of them can have a financial interest in any Commission-related business.
News today that FCC Chairman Kevin Martin will resign on Inauguration Day makes the FCC an even more interesting topic for discussion. With this resignation, Obama will have nominated all five of the serving FCC Commissioners by this summer. Also, it goes without saying that the FCC will be regulating some important aspects of our society, including the Digital TV transition that’s slated for February.
Obama’s choice for FCC Chairman is Julius Genachowski. Wikipedia describes him as “an American business executive with experience in telecommunication and technology issues.” This ideal of not having a financial interest in Commission-related business isn’t starting off well. Of course, that’s Wikipedia, so maybe it’s not trustworthy. Let’s look at Reuters’ description:
Genachowski was chief counsel for Reed Hundt, an FCC chairman under former President Bill Clinton. He also held various positions at Internet search and media company IAC/InterActiveCorp (IACI.O) and several firms investing in technology, including Rock Creek Ventures and LaunchBox Digital.
Again, it sorta feels like this is a man with financial interests in technology. Business Week even lauds his “business sense” as a key benefit that he brings to the table. But let’s take a step back from this individual appointment. I really don’t know much about Genachowski other than what’s been reported in the news, and I certainly don’t want to pick on him as an individual that’s emblematic of the larger problem with “real” regulation.
My point is simply to consider this: Is it really possible to find anyone who has the knowledge needed to help run a regulatory organization like the FCC that doesn’t have a financial interest in Commission-related business? If it isn’t outright provably impossible, then at the very least I think there’s a strong argument to be made that it is impossible. Sure we may wish that it weren’t so, but if wishes were fishes, we’d all be casting our nets. Of course, I’m open to your thoughts in the comments.