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Against Monopoly

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Monopoly corrupts. Absolute monopoly corrupts absolutely.





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Pearlstein: Beware the courts on government regulation

We don't often think of the courts as playing an active role in the evolution of intellectual property law, perhaps because we tend to accept the assertion by judges that they follow precedent. Writing in the Washington Post, Steven Pearlstein cites four cases where the D. C. Circuit Court has gone out of its way to assert that the regulators have exceeded their Congressionally granted authority. link here

The key graph: "Many of the D.C. Circuit judges have long since stopped pretending to defer to the factual determinations and policy judgments of duly appointed regulators, as the law requires. Deference has now given way to skepticism, hostility and contempt that can easily be read between the lines of overly legalistic opinions that routinely ignore the plain language of statute and the clear intent of Congress. It's gotten so bad that top regulators told me privately this week that they routinely put aside consideration of needed new initiatives because they assume they will be foiled by the hostile appeals court."

In the first case, the DC court went after the Federal Communications Commission for exceeding its authority in trying to regulate Comcast violations of net neutrality. In the second case, Pearlstein charges the Court with interfering in the development of generic drugs, thus extending the drug patents of the large pharmacy companies. Thirdly, he knocks the Federal Trade Commission for going beyond the pale in trying to reign in " a tech company for enhancing its monopoly in a certain chip-making process by deceiving an industry standard-setting body. According to [Judge] Williams, the fact that its deceit 'merely' enabled a monopolist to charge higher prices doesn't constitute illegal anti-competitive behavior." Huh? Finally, the court stopped the Securities and Exchange Commission when it tried to require that 75 percent of the directors of a mutual fund be independent of the company chosen to manage the fund's investments, in order to protect small investors.

I can't find the quote, but Supreme Court Justice Oliver Wendell Holmes Jr. argued that justices first decide how they want a case to come out and then pick the arguments to reach that end. With that in mind, it is much easier for us commoners to understand how judges reach their judgments and that being human, they are not averse to expanding their own powers.


Comments

Mr. Bennett, You are referring three cases in your post. I am not familiar with two of them, but I was keeping close eye on first one: Comcast vs. FCC. It is all about Net Neutrality and can FCC enforce it. For many people the Net Neutrality is some kind of attempt for government take over the Internet. The reality is that it is attempt to preserve the openest of the internet and prevent the old telecommunication cartel from changing the rules. But I don't want to debate the Net Neutrality now. The question I am asking my self how bad this decision for the Internet in USA in near and long term future. The more I think the more I realize that court decision was right one. Yes, Comcast and other ISP now can start abusing their power and start interfering with the Internet traffic. This will only demonstrate why we need to have Net Neutrality in the first place. Second now the argument is moving back to the Congress where it should be argued in the first place. As result the Net Neutrality could become law instead of some regulation enforced by non-elected bureaucrat. The risk of letting the FCC to regulate the Internet with out law framework is very dangerous. We may end up as Canada. They lets CRTC to regulate the Internet. Today CRTC is overtaken by industry lobbyist and every industry wish is rubber stamp completely ignoring the publics' opinions. The result is that in Canada the Internet sucks. Canadian pay much more then the rest of the world. The speeds are very low in most of the cities. And the ISPs are blocking competing services. And as result Canada is left behind in all Internet ranking lists. So If we let FCC to regulate the Internet without Law we are going to be in the same boat to the bottom. Best regards, SAL-e
What's needed is neither regulation nor legislation, but competition. Let companies buy and trade "white space" spectrum and some other spectrum and we'll see the cable/DSL duopoly suddenly have stiff competition from wireless providers of real, proper internet access. Reduce telco regulation, save to require they act as common carriers, as well.

Alternatively, nationalize the fiber backbones and "last mile" cables but let companies provide services over them for a low rate. This works for other natural monopolies, such as the highway system: most roads are city- or state-owned and maintained, but anyone can operate a FedEx or a truck fleet or whatnot over them to connect any endpoints like, say, a dockyard in Manhattan and a warehouse in New Jersey or that warehouse and a department store in Chicago.

John you wrote: "We don't often think of the courts as playing an active role in the evolution of intellectual property law, perhaps because we tend to accept the assertion by judges that they follow precedent." While this statement reflects how judges should act, it also implies a reluctance to accept reality. Regretfully, every time a judge rules in favor of so-called intellectual property the result is an increasing public perception of intellectual property being an entitlement. Politicians then pick up on this "public mandate" resulting in ever increasing onerous legislation supporting this entitlement. The legal community must be reminded, that is has a responsibility to act within the construct of the Constitution and for the benefit of society as a whole.

While it is good to point out how the court has ruled against regulators overstepping their authority, the real focus should be pointing to court decisions that uphold ridiculous intellectual property decisions. Failing to respond to judges establishing legal perceptions on the grounds that they shouldn't be doing this is a mistake.

I can't tell from this summary whether Bennett or Pearlstein are in favor of the FCC intervening in the market, but it seems maybe so. The state is a criminal gang, and the FCC just a branch of it. It has no business telling companies what to do. There is nothing wrong with telcos discriminating in or tiering their services. The idea that the state should use its gargantuan, unjust monopoly to try to attack small quasi-private monopolies of telcos (which the state helps to create in the first place with regulation and subsidies and tax policy ad IP law) is ludicrous. I've written on the libertarian position on net neutrality a href="http://www.libertarianstandard.com/2010/04/07/net-neutrality-developments/">here. Don't trust the state--ever. Smash it!
I can't tell from this summary whether Bennett or Pearlstein are in favor of the FCC intervening in the market, but it seems maybe so. The state is a criminal gang, and the FCC just a branch of it. It has no business telling companies what to do. There is nothing wrong with telcos discriminating in or tiering their services. The idea that the state should use its gargantuan, unjust monopoly to try to attack small quasi-private monopolies of telcos (which the state helps to create in the first place with regulation and subsidies and tax policy and IP law) is ludicrous. I've written on the libertarian position on net neutrality here. Don't trust the state--ever. Smash it!
One problem: (wired) broadband is a natural monopoly, since the infrastructure is so expensive to build out. Without the state there would still not be much broadband competition and there'd be no regulatory oversight either, so the broadband provider in an area would have a completely unfettered ability to dictate terms to customers.
Again John Bennett shows why he's the best contributor here, and Stephan Kinsella struggles to keep up so much that he double-posts on a blog he has write access to. And again S.K. confuses democracy, the system where monopoly is prevented with a non-capitalist counting system we call votes, versus private market monopolies, the kind that are created and kept with a mix of distorted non-scarcity capitalism and natural market limits.

Votes are superior to dollars when measuring public goods, like Highways, whether for basic needs like transportation or communications. S.K.: I welcome you to go off and form your own island, where you can allow private "enterprise" natural monopolies build their own toll roads, and make you stop every few feet to pay a new one. Have fun with that.


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