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Regulations are a double-edged sword and serve many lords, just like most actions of government. It's possible for the same regulation to vastly decrease the ri

Regulations are a double-edged sword and serve many lords, just like most actions of government. It's possible for the same regulation to vastly decrease the risk of harm to consumers, yet act as a barrier to entry for smaller players. This can happen both intentionally and unintentionally. It also doesn't help that drafting effective regulations requires domain expertise, so the field is vulnerable to infiltration by industry to further their own ends. Then there's the sort of regulations that account to little more than elaborate CYAs, or data collections for some governmental official's pet project. On the other hand, it's bewildering to think that every area of life has been subject to so much regulatory capture (in dozens of jurisdictions nonetheless) that the year 2000 formed a tipping point of corporate profits in the US. Half of the years have been under administrations more friendly to mergers, so the vertical consolidations in the style of CVS-Aetna or Cigna-Express Scripts could have gone on to become a tool for deep-pocket entrants to enter heavily-regulated markets. Instead, horizontal consolidation mergers like GlaxoSmithKline and Pfizer-Wyeth dominated. Don't forget AOL-Time Warner, Comcast buying AT&T Broadband, or the saga where SBC bought Ameritech and then the remnants of the original AT&T, renamed itself to AT&T, and then bought BellSouth too. Or any number of big bank mergers. Or oil companies. So, it seems instead of entering new markets during a time of favorable regulatory environment, companies chose to buy out competitors instead, lay off a bunch of newly-redundant staff, and pocket the profit. Hmm.

AnthonyMouse 7y ago
> So, it seems instead of entering new markets during a time of favorable regulatory environment, companies chose to buy out competitors instead, lay off a bunch of newly-redundant staff, and pocket the profit. Hmm. You say favorable regulatory environment, but favorable to who? If you have a bunch of regulations that make it hard to start a new ISP and compete with the incumbents, but also get rid of the ones that prevent them from buying each other, it's hard to call that "deregulation" rather than regulatory capture.
- rayiner 7y ago
  > You say favorable regulatory environment, but favorable to who? If you have a bunch of regulations that make it hard to start a new ISP and compete with the incumbents, but also get rid of the ones that prevent them from buying each other, it's hard to call that "deregulation" rather than regulatory capture. Can you point to a non-hypothetical example of the former?
  - AnthonyMouse 7y ago
    > Can you point to a non-hypothetical example of the former? Build-out requirements that prevent small ISPs from forming to serve only a specific neighborhood.
    - rayiner 7y ago
      Fair enough, but an odd one to cite in the context of the point above regarding "favorable regulatory environment." I assumed you were talking about something in the federal law. State and municipal law has never been favorable to anything.
      - eecc 7y ago
        Hmm, what about the US prohibition for municipal utilities to provide network service and compete on the micro local level?
        rayiner 7y ago
        First, there are no such prohibitions at the U.S. (i.e. federal) level. Some states have such laws. Second, that is a poor example of regulations that "make it hard to start a new ISP and compete with the incumbents." Presumably, that's talking about upstart private competition. What you're saying is the opposite. Government entities or government-sanctioned monopolies (like the local power or water utility) don't in any sense "compete" with the private sector. They displace it. If you're a startup ISP, you can't hope to compete with say the local electric utility, which can make large capital investments in network service and recover from captive electricity rate payers. As an aside, the idea of government entities "competing" is a weird new brand of rhetoric (you also see it with the "public option"). I'm not sure where it comes from, but it makes no sense. If you're a New Deal liberal and believe government would do something better than the private sector, then own that. Don't pretend like private companies can meaningfully compete with an entity that doesn't have to turn a profit to stay in business.
bsbechtel 7y ago
I really wish discussions about how regulations protect the consumer didn’t start with the assumption that there was no better option than government regulation to afford that same protection.
- D_Alex 7y ago
  >better option than government regulation to afford that same protection What do you have in mind?
  - nostromo 7y ago
    I think Uber vs the SF taxi commission is one such example. Regulations on taxis were sold as a public safety measure but the regulators became captured by the industry. Uber and Lyft sidestepped the regulations and prices went down, service improved dramatically, and there was no reduction in safety. (In fact, it’s likely drunk driving has gone down and improved public safety.) In this instance, private industry is currently a better regulator than the regulators were.
    - D_Alex 7y ago
      This is a good example, but: have you ever dealt with airport car ride hustlers? This is what the alternative to taxi regulations looked like before smartphones enabled solutions like Uber. Furthermore: Is there a general principle here that can be applied across a range of situations as a better alternative to government regulations?
      - rohit2412 7y ago
        And guess what, Uber is just subsiding rides to capture market share. With a monopoly, they'll be worse than the airport ride hustlers.
    - Guvante 7y ago
      > Uber and Lyft sidestepped the regulations and prices went down, service improved dramatically Technically neither of those is a failure of regulation, those are side effects of regulation. Uber and Lyft removed transparency of costs beyond knowing the cost of your trip for instance which isn't a benefit. In fact I can't think of much that is related to regulation that they do better beyond being good enough for now by most metrics that people care about. Of course if that changes in the future nothing can be done. I am fine with Uber and Lyft existing and I do agree that taxis had in some places made themselves into a nuisance but I don't know that those companies did a better job as much as they just ignored all those problems and assumed they weren't important.
TomMckenny 7y ago
You mention an excess of mergers over the decades which reminds me of a new problem with the inverse: anti-trust enforcement. It appears that anti-trust, which was rare to begin with, may now have been politicized. For example, it's hard to understand why favoritism is shown to ISPs yet effort is put into breaking up large software companies. Especially in light of the difference in campaign contributions in 2018.
- quanticle 7y ago
  "May now have been politicized"? Anti-trust has been politicized for a long time. It just seems like it's politicized now, because it's our companies which are being targeted. When the Obama-era Justice Department prevented the T-Mobile/Sprint merger, that was considered to be a just and fair application of anti-trust law, but somehow when the same scrutiny is applied to Google and Facebook, that's considered "politicization". To be clear, I'm don't disagree with the Obama Justice Department's blocking of the Sprint/T-Mobile merger. Such a merger would certainly have reduced the competition in wireless markets, and would probably have led to higher prices and poorer service. But it's hard to characterize the decision to pursue telecom companies (while ignoring big tech) or the reverse (pursuing big tech while ignoring telecoms) as anything but political.
  - _emacsomancer_ 7y ago
    > When the Obama-era Justice Department prevented the T-Mobile/Sprint merger Wasn't it the ATT/T-Mobile merger? Which is a bit different from T-Mobile/Sprint in various aspects.
    - deleted 7y ago
      [deleted]
  - ajxs 7y ago
    A fair person would consider that the political leverage possessed by companies like Facebook or Twitter to be an issue irrespective of what political party they supported. Surely the fact that multinational corporations such as these are able to work together with domestic political organisations to serve their own interests while being able to evade enforcement of domestic laws is an issue. The unpopularity of the Trump administration notwithstanding, they have a clear reason to want to push in this direction. I can't imagine the Democratic party being quick to act on this issue for the time being, since ostensibly the overreach of these organisations is working in their favor.

AnthonyMouse 7y ago

> So, it seems instead of entering new markets during a time of favorable regulatory environment, companies chose to buy out competitors instead, lay off a bunch of newly-redundant staff, and pocket the profit. Hmm. You say favorable regulatory environment, but favorable to who? If you have a bunch of regulations that make it hard to start a new ISP and compete with the incumbents, but also get rid of the ones that prevent them from buying each other, it's hard to call that "deregulation" rather than regulatory capture.

rayiner 7y ago
> You say favorable regulatory environment, but favorable to who? If you have a bunch of regulations that make it hard to start a new ISP and compete with the incumbents, but also get rid of the ones that prevent them from buying each other, it's hard to call that "deregulation" rather than regulatory capture. Can you point to a non-hypothetical example of the former?
- AnthonyMouse 7y ago
  > Can you point to a non-hypothetical example of the former? Build-out requirements that prevent small ISPs from forming to serve only a specific neighborhood.
  - rayiner 7y ago
    Fair enough, but an odd one to cite in the context of the point above regarding "favorable regulatory environment." I assumed you were talking about something in the federal law. State and municipal law has never been favorable to anything.
    - eecc 7y ago
      Hmm, what about the US prohibition for municipal utilities to provide network service and compete on the micro local level?
      - rayiner 7y ago
        First, there are no such prohibitions at the U.S. (i.e. federal) level. Some states have such laws. Second, that is a poor example of regulations that "make it hard to start a new ISP and compete with the incumbents." Presumably, that's talking about upstart private competition. What you're saying is the opposite. Government entities or government-sanctioned monopolies (like the local power or water utility) don't in any sense "compete" with the private sector. They displace it. If you're a startup ISP, you can't hope to compete with say the local electric utility, which can make large capital investments in network service and recover from captive electricity rate payers. As an aside, the idea of government entities "competing" is a weird new brand of rhetoric (you also see it with the "public option"). I'm not sure where it comes from, but it makes no sense. If you're a New Deal liberal and believe government would do something better than the private sector, then own that. Don't pretend like private companies can meaningfully compete with an entity that doesn't have to turn a profit to stay in business.

bsbechtel 7y ago

I really wish discussions about how regulations protect the consumer didn’t start with the assumption that there was no better option than government regulation to afford that same protection.

D_Alex 7y ago
>better option than government regulation to afford that same protection What do you have in mind?
- nostromo 7y ago
  I think Uber vs the SF taxi commission is one such example. Regulations on taxis were sold as a public safety measure but the regulators became captured by the industry. Uber and Lyft sidestepped the regulations and prices went down, service improved dramatically, and there was no reduction in safety. (In fact, it’s likely drunk driving has gone down and improved public safety.) In this instance, private industry is currently a better regulator than the regulators were.
  - D_Alex 7y ago
    This is a good example, but: have you ever dealt with airport car ride hustlers? This is what the alternative to taxi regulations looked like before smartphones enabled solutions like Uber. Furthermore: Is there a general principle here that can be applied across a range of situations as a better alternative to government regulations?
    - rohit2412 7y ago
      And guess what, Uber is just subsiding rides to capture market share. With a monopoly, they'll be worse than the airport ride hustlers.
  - Guvante 7y ago
    > Uber and Lyft sidestepped the regulations and prices went down, service improved dramatically Technically neither of those is a failure of regulation, those are side effects of regulation. Uber and Lyft removed transparency of costs beyond knowing the cost of your trip for instance which isn't a benefit. In fact I can't think of much that is related to regulation that they do better beyond being good enough for now by most metrics that people care about. Of course if that changes in the future nothing can be done. I am fine with Uber and Lyft existing and I do agree that taxis had in some places made themselves into a nuisance but I don't know that those companies did a better job as much as they just ignored all those problems and assumed they weren't important.

TomMckenny 7y ago

You mention an excess of mergers over the decades which reminds me of a new problem with the inverse: anti-trust enforcement. It appears that anti-trust, which was rare to begin with, may now have been politicized. For example, it's hard to understand why favoritism is shown to ISPs yet effort is put into breaking up large software companies. Especially in light of the difference in campaign contributions in 2018.

quanticle 7y ago
"May now have been politicized"? Anti-trust has been politicized for a long time. It just seems like it's politicized now, because it's our companies which are being targeted. When the Obama-era Justice Department prevented the T-Mobile/Sprint merger, that was considered to be a just and fair application of anti-trust law, but somehow when the same scrutiny is applied to Google and Facebook, that's considered "politicization". To be clear, I'm don't disagree with the Obama Justice Department's blocking of the Sprint/T-Mobile merger. Such a merger would certainly have reduced the competition in wireless markets, and would probably have led to higher prices and poorer service. But it's hard to characterize the decision to pursue telecom companies (while ignoring big tech) or the reverse (pursuing big tech while ignoring telecoms) as anything but political.
- _emacsomancer_ 7y ago
  > When the Obama-era Justice Department prevented the T-Mobile/Sprint merger Wasn't it the ATT/T-Mobile merger? Which is a bit different from T-Mobile/Sprint in various aspects.
  - deleted 7y ago
    [deleted]
- ajxs 7y ago
  A fair person would consider that the political leverage possessed by companies like Facebook or Twitter to be an issue irrespective of what political party they supported. Surely the fact that multinational corporations such as these are able to work together with domestic political organisations to serve their own interests while being able to evade enforcement of domestic laws is an issue. The unpopularity of the Trump administration notwithstanding, they have a clear reason to want to push in this direction. I can't imagine the Democratic party being quick to act on this issue for the time being, since ostensibly the overreach of these organisations is working in their favor.