The Federal Communications Commission (FCC) shows once again how truly apt is the ‘bureaucracy-is-cancer’ metaphor. Cancers multiply their cells feeding off of the host organisms. Cancer can lie in waiting for just the right conditions and then grow exponentially. The FCC is a bureaucracy that has grown and fed off of the public and the markets for communications since 1934, a time of great unrest and change – a time that presented the right conditions for the cancer to start.
Current FCC Chairman Julius Genachowski is riding the wave of elitist liberal thought that says “we are smarter than you and therefore should control you and your activities, for your own good.” It is the set of conditions that was ushered in by a combination of Recession and War and promises of change that swept the nation to elect a Liberal Administration and Congress. Being unelected, but appointed by that new Liberal Administration, Mr. Genachowski has not felt the voting public’s recent rebuke of the Liberal policies that exist today in Washington, D.C. Instead, he sees the right conditions to expand FCC control over new and powerful communications networks that we call “the Internet.”
In 2011, the FCC will spend about $325 Million and will employ 2,000 people (an average of well over $160,000 per employee). With “only” 2,000 employees, will the FCC really be able to regulate the internet? Or will they need a massive injection of staff and money to accomplish this job?
If you want to read a bit about Net Neutrality, I recommend both an article by Sam Gustin in Daily Finance, and one by Craig Pirrong at Seeking Alpha.
I’m not sure I understand the issue well enough at this point to properly weigh in on the overall issue. I do, however, wonder about the FCC and have the following questions:
Is it right to have an agency of the Federal Government, made up of entirely appointed personnel, take control of the internet? Should they be able to basically enact laws (regulations) that will rule the organizations that provide the various components of internet service?
“It is the mission of the Federal Communications Commission to ensure that the American people have available – at reasonable costs and without discrimination – rapid, efficient, nation- and world-wide communication services; whether by radio, television, wire, satellite, or cable.”
It seems to me that the (basically) free market has already provided us with an internet at reasonable costs without discrimination. Will imposing FCC rule and price controls really make it better? Or will it just make government bigger and more powerful?
Another question: When Verizon recently bid $5 Billion for a new chunk (C block) of the 700Mhz bandwidth, where did that money go?
Responsibility-Freedom Demands It 
7 comments
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December 22, 2010 at 7:41 am
The Skald
This garbage makes me want to choke! Here’s a bit from the WSJ that might interest you on this subject: http://online.wsj.com/article/SB10001424052748703886904576031512110086694.html
December 22, 2010 at 11:29 am
ttoes
Thanks, Steven. I did read the WSJ item this morning (after my post, mind you). I also heard a Mike Huckabee piece about the issue on the radio this morning. I guess this is the new hot topic. In the big scheme of things, I’m sure this is a pimple on an elephant’s ass, but it truly is symptomatic of the of the ‘regulatory creep’ that is making it so complex and challenging to just exist in today’s society.
Tom
In case I didn’t make the point well in my post-travel post, if you get a chance, get a copy of Rebecca Costa’s book, The Watchman’s Rattle, easily the most stimulating read I’ve had in a couple of years.
T.
December 22, 2010 at 3:03 pm
pmv
Couple comments…
As a business owner I’m sure you know that Annual Expenditure divided by # of Employees does not equal Average Salary.
And sorry, that WSJ article is garbage. The author spent more time writing “Socialist” and “Marxist” than explaining net neutrality. And who is this Marxist? A guy who worked with a woman who then worked for the guy in charge of the FCC. McCarthy? Also, Net Neutrality has nothing to do with the Fairness Doctrine (“Fairness” is another buzzword) – it’s really more like an anti-trust case.
I agree that this is pretty much a non-issue, but I would add that just as liberals see an opportunity to regulate, conservatives see an opportunity to cry socialism when what the government is doing is the same thing it has done for every other means of communication.
December 22, 2010 at 4:26 pm
ttoes
PMV,
Like most business owners, as you point out, I do know that you can’t divide annual expenditure by number of employees and get average salary. That’s why I did not do that. I merely stated that for every employee they expend $160,000. The amount expended on each employee varies greatly by industry type, but generally varies based on the: 1- education, training, and experience of the employees as reflected in employment cost – recruitment costs,salary, benefits; 2 – Overhead costs to make the employees productive – office or shop space, equipment, services, utilities and subscriptions, etc. My inference in showing this was that the number is high in relation to the type of work done. With the exception of the management, I don’t see FCC work as being the type that demands high cost employees with high cost equipment and high travel and communications costs. The FBI which maintains many offices all over the world and huge transportation and communication and technology costs runs at about $125,000 in expenditures per employee (if my math is right ($8B exp. with 64k employees) I would have estimated their expenditure per employee to be under $100,000 – just an opinion, like everything else on this blog, BTW.
As for the comment that the WSJ article was “garbage,” you are entitled to your opinion. I tried to give one article on each side of the debate because I am still not sure where I fall on this subject, except, that I don’t like public law written by bureaucrats who work for agencies, none of whose members are elected.
The only place I disagree with myself is in the insignificance of this issue. I feel it is noise level, until the regulation gets to the point of impinging on free speech. At that point, which I anticipate is in the FCC’s future, this does become a very significant issue.
Thanks for the comment.
T.
December 23, 2010 at 9:27 am
The Skald
I suppose garbage is in the eye of the beholder… perhaps, perhaps not. Still, for the record, the WSJ article was an Opinion piece. The title of the article “The Net Neutrality Coup: The campaign to regulate the Internet was funded by a who’s who of left-liberal foundations” suggests that the man has an opinion on who’s funding the effort rather than trying to define what net neutrality happens to be. Perhaps it’s simple hyperbole, but seriously, the word “Marxist” appears precisely twice – same for the word “socialist” (one of which happens to be part of a website’s name).
Four words out of over a thousand, but yes, that’s more than he devoted to explaining what net neutrality is…
While I disagree that this is a non-issue, I do agree that elements are similar to an anti-trust case – except that a government agency is creating regulatory law to do an end run around the courts. I would venture a guess that it’s because pursuing the issue in court using existing anti-trust legislation… would be a bit difficult considering the number of companies involved in the attempt.
I would also argue that the internet is unlike any other communications that the FCC is responsible for regulating in one very important way – individual access. I can run down to my local library and gain access to the internet to have my say. Nobody has to listen, just like radio and television, but at least I can put my point of view out there as a part of the conversation.
Realistically, for anyone interested in what net neutrality actually is, the wiki article is a click away, and it does a stand up job of providing insight into the definitions as well as some of the complexities.
Cheers,
Steven
December 23, 2010 at 9:35 am
The Skald
Oh! And on another matter… I just started Costa’s book – I ordered it the same day I read your post, and I received it yesterday 🙂 Can’t wait to get into the meat of her exposition. Thanks for the lead to another interesting book!
Steven
December 29, 2010 at 12:07 am
pmv
Thanks for your reasoned response Mr Skald. Sorry if I get a little worked up. I am fine with the notion that we should try to prevent the government from controlling any more of our lives, but I really believe that certain laws and regulations actually enhance our freedoms.
The Net Neutrality issue reminds me of when Microsoft wanted their Windows operating system to only work with their Internet Explorer web browser. Similarly Comcast/ATT/etc now want to be able to limit the devices and software and websites they will interact with. I personally think that the market today can deal with a situation like this, but there are certainly arguments to be made on both sides of the issue.
In my opinion, the government’s decision to step in and prevent Microsoft from making Internet Explorer the only real option on all Windows computers was instrumental in creating the kind of open internet that has led to the rush of innovation we all now take for granted. Of course that was a different situation. Also, as you point out the internet is different in some ways from other modes of communication. But it is also similar in many ways – all our internet relies on a central grid of communication lines, and Comcast/ATT/etc only build/maintain the “last mile” that takes extends the network to individuals and busineses (wireless is another matter). The government also regulates internet content (or attempts to) just like they regulate TV content. I would also guess that within 10 years a majority of people will get their phone, tv, and radio service through the internet.
Anyway, I don’t really see this as a conservative/liberal issue or an issue of fairness. I think we all want the internet to be as free as possible and to continue fostering innovation and economic growth. The question is how we go about ensuring that freedom.