Wednesday, April 7, 2010

Government oversight

Consider the following excerpt from USA Today:

The U.S. Court of Appeals recently ruled that the FCC overstepped its authority in 2008 when regulators barred Comcast from interfering with Internet traffic from peer-to-peer, video-sharing services.

The cable company said the sites were hogging scarce Internet bandwidth, which slowed all Web traffic. The FCC said it wanted to prevent Comcast from using its clout as a broadband service provider to favor some services over others.

But the court unanimously agreed with Comcast that the FCC doesn't have an explicit right to regulate broadband service, and can't infer it from its power to set rules for cable TV and phone services.

In response to this ruling against the FCC, Sen. John Kerry (D-Mass) said that "without oversight, market giants would be free to do as they wish, even if their actions hindered the free flow of information, treated consumers unfairly or discriminated against content creators."

I do not pretend to know the intricacies of laws regulating cable TV, phone services and broadband services. Lawmakers probably paid little attention to the language when they voted for those laws and wouldn't be able to determine if the FCC was taking too many liberties with the letter of the law in its enforcement of those laws. It took one of the highest courts in the land to determine that the FCC overstepped their bounds.

I do know that as long as there are even just a few market giants instead of a singular market giant, in the long run, as Senator Kerry would say, information will flow freely, consumers will be treated fairly and content creators will see no discrimination. How do I know this? Competition. One search of broadband service providers (BSP) shows a list of 29 all the way from Adelphia to Comcast to Yahoo. What if Comcast continues to engage in such activity? Would disgruntled consumers not switch to another BSP?

Consider also this excerpt from www.fastcompany.com.

An attorney who defended FCC said that the federal court's decision "represents a severe limitation on the agency's future authority."

We should not be worried about severe limitations imposed on the FCC, or any other agency, by our federal courts who strive, or at least should strive, only to interpret laws and see that they honor the supreme law of the land, the Constitution. We should, however, be worried about the largest market giant, namely the federal government, which naturally seeks to insert itself into the daily decisions of millions of free people. We need less government oversight of the free market and more free market oversight of the government.