In this time of intellectual, political and philosophical
rigidity, I embrace eclecticism and flexibility. I have suffered in the marketplace
for funding and invitations to speak at conferences, because I don’t fit into
one single camp. I combine salt and fresh water economics, as well as views on
the marketplace from both political party templates.
I consider intellectual nimbleness a virtue, even as the
current political and regulatory climate imposes litmus tests. I am not alone: even some Chicago School economists
have started to consider whether ventures can profit from predatory pricing as
may be occurring when Internet platform intermediaries like Amazon postpone
profit maximization to acquire more shelf space and market share. For true believers, this is anathema, because
they can’t conceive of a venture having the patience and ability to forego near
term profits for greater future gains.
Throughout my intellectual mix, two guiding principles remains
key: 1) find the truth and 2) identify how consumers benefit, or suffer from
any government initiative. What’s so
wrong with these drivers? Even ideologues
like FCC Chairman Ajit Pai see some benefit in government and regulation. I
expect him to make a taxpayer-financed grand tour of Hawaii’s Diamond Head, an
extinct volcano now home to several military, emergency and governmental
outposts.
On other days, the Chairman appears drunk on the prevailing Chicago
School ideology that cannot identify any good in government. See Jeff John Roberts, Network Neutrality:
The FCC Chair is Drunk on Ideology, FORTUNE (Dec. 15, 2017); available at: http://fortune.com/2017/12/15/net-neutrality-pai/. Such blind trust in the marketplace ignores
several inconvenient truths.
Corporations, Subject
to FCC Oversight, Pursue Greedy, Knucklehead Strategies
While marketplace purists consider the marketplace
completely able to impose self-discipline, in reality company managers come up
with truly foolish initiatives which seemed so clever at the start. Use a search engine with key words like
Verizon + FCC + fine and you will see a rather tawdry record where even high
visibility ventures have engaged in shameful conduct apparently to squeeze out
a few more million.
Consider this strategy in the context of aggressive
lawyering, research sponsorship and mandatory arbitration contract terms that foreclos
consumers’ legal redress. It took 3
years for Verizon to acknowledge that maybe it could have inserted a second
screen on certain cellphones to confirm that a subscriber really wanted to
launch an Internet session instead of an inadvertent pressing of a poorly
placed button. Today the Big 4 wireless
carriers insist on a definition of “unlimited” that does not match the usual
expectation.
Let’s not forget that
Comcast considered it strategically advantageous to lie to the FCC and to
stonewall rather than fest up that the company was sending reset commands to
frustrate peer-to-peer networking. Let’s
remember that Verizon found ways to disable tethering and all wireless carriers
disabled Wi-Fi access until they realized they could offload traffic using that
preinstalled feature in most cellphones.
Have we forgotten the numerous instances where major companies like
AT&T and Verizon allowed, if not sanctioned the “cramming” of false,
unauthorized additional fees and charges?
Regardless of Party Majority, the FCC Regularly Engages in
Results-Driven Decision Making
We need an FCC that seeks the truth, not a preconceived outcome
for which Commission staff “interpret” evidence to support that finding. Does anyone think the Pai-led FCC objectively
considered the facts and reached positions 100% opposite what the Wheeler-led
FCC identified?
With great pride and solemnity, Chairman Pai has announced
the creation of an economic analysis group well qualified to conduct the cost/benefit
analyses he endorses.
Does anyone think
economists are any less likely to selectively interpret evidence and doctrine using
a results-driven template? So the
marketplace can self-regulate, except when it doesn’t.
Safe travels and Aloha Chairman Pai.
