Like with all huge new government power grabs, there are a few very predictable post-grab outcomes. Let’s look at a few through the prisms of relatively new grab Net Neutrality – and ObamaCare, a more vintage grab thus doing even more predicted damage.
And as we know, and will see – past is prologue. Net Neutrality will age just as poorly as has ObamaCare.
ObamaCare and Net Neutrality opponents both warned of loss of private sector investment/participation in the respective sectors. Because government is toxic – and for the private sector, coming into contact with it is lethal. As government expands, the private sector retracts – to get out of government’s way, and to limit as much as possible its exposure.
Has that happened? It has with ObamaCare.
Major Health Insurance Companies Leave Obamacare Exchanges: “The companies’ refusal to participate in the exchanges is only the latest development in a long string of setbacks that make implementation of Obamacare on schedule almost impossible.”
And Net Neutrality? The government has imposed on the Internet 1934 law written to regulate a landline telephone monopoly. Of course, if you regulate an uber-vibrant, multi-provider sector under monopoly law – you’ll end up with a monopoly. Killing off one provider after another – until but one remains. And for Net Neutrality proponents – that provider isn’t even a private company. It’s government:
“At the moment, the battle over network neutrality is not to completely eliminate the telephone and cable companies. We are not at that point yet. But the ultimate goal is to get rid of the media capitalists in the phone and cable companies and to divest them from control.”
More government regulations inherently means less private sector investment.
Does The Tumble In Broadband Investment Spell Doom For The FCC’s Open Internet Order?: “They said it wouldn’t happen. They offered assurances from three Wall Street analysts, who insisted that Internet service providers (ISPs) would continue to invest at the same levels regardless of the regulatory climate….The average decline across all wireline ISPs was 12 percent. Including wireless ISPs Sprint and T-Mobile in the sample reduces the average decline to eight percent. This capital flight is remarkable considering there have been only two occasions in the history of the broadband industry when capex declined relative to the prior year: In 2001, after the dot.com meltdown, and in 2009, after the Great Recession.”
Investment leaves when government grabs – for myriad reasons. One of them is – government imposes too many mandates and restrictions on how companies may invest. Creating a vacuum – which government bloats further to fill.
Has that happened? It has with ObamaCare.
There’s the employer mandate. The individual mandate. Mandated abortion drug coverage (as someone who likes the Hyde Amendment, I am particularly pleased with this one). Mandated maternity and pap smear coverage (as a single guy, I am particularly pleased to be exorbitantly paying for those). And on, and on, and….
Mandate explosion – causes cost explosion.
As ObamaCare Mandates Explode, So Will Insurance Costs: “Not surprisingly, lobbyists for provider groups are pressing state legislatures to make sure their particular service gets on that list.”
Because nothing the government gives you for “free” – is actually free.
“Free” government broadband – isn’t free either. And as government’s new regulations regime chokes out private Internet providers – government is ramping up government broadband.
Democrats Support ‘Ambitious’ Tech Investment: “The just-released draft of the Democratic party platform…supports Net Neutrality and expansion of high-speed broadband networks….It seeks ‘a major federal jobs program’ centered on infrastructure investment for…(amongst other things) broadband.”
After the government grabs – there is also less private sector innovation. More and more government means the private sector knows less and less what it is permitted to do. Thus we are forced to play “Mother May I” with government. Begging for permission to do anything different than what we are already doing – otherwise known as innovation.
Has it happened? It has with ObamaCare.
‘Mother, May I?’: Will Republicans Fall for Wyden-Brown?: “The bill, introduced by Senators Ron Wyden (D-OR) and Scott Brown (R-MA), would basically just move up, from 2017 to 2014, the date when states would be allowed to petition the feds for some flexibility from Obamacare’s numerous rules and mandates. Whether it’s 2017 or 2014, it’s still ‘Mother, may I?’”
And Net Neutrality? There was PLENTY of advanced warning that the uber-stupid regulations would create a “Mother May I” mandate.
One recent Internet innovation is “zero rating.” Which is wireless companies negotiating deals with content companies – so that the content companies pay for the data for their content, so we users don’t have to do so. We get free, unlimited data for that content – which frees up our metered data to be used for other content. Everyone wins.
Except government may rule it to be a Net Neutrality violation. Which means the wireless companies and the content companies – all have to play “Mother May I” with the government. Just as (very easily) predicted.
T-Mobile Asks Binge On Partners for FCC Help: “A dozen small video providers participating in T-Mobile’s Binge On zero-rating service fired off a letter to the FCC praising the offering. T-Mobile confirmed to MT that they’ve asked small video providers to weigh in with their support for Binge On, as the FCC’s informal review of such services continues. ‘[Binge On] is contributing to the success of our services and the satisfaction of our users and we strongly support it. We think it meets the commission’s Open Internet objectives and urge you to support it,’ wrote the firms…Earlier this week, T-Mobile announced that more than 100 video and music services, including Apple Music, are taking part in Binge On.”
More than 100 content providers – providing free, unlimited content via a wireless Internet provider.
Sounds like a great innovation to me. But that’s just me. Will 300 million United States consumers think so? And make 300 million individual, free market determinations that zero-rating is a good idea?
We may never get to find out. Three unelected Democrat FCC bureaucrats may preemptively prohibit we 300 million from making that decision.
How’s that for a free market?
This is a guest post by Seton Motley Founder and President of Less Government