Keep the Internet Out of the Iron Triangle

by on July 12, 2006 · 8 comments

Bill Herman has a response to Ed Felten’s paper over on the Public Knowledge blog. It’s a long and thoughtful response, so I thought it would be worth quoting in detail before I respectfully disagree with his conclusion:

In the U.S. political system, most policy topics at most times will be of interest to a small number of policymakers, such as those on a relevant congressional committee (Jones & Baumgartner, 2005, p. 39). House and Senate committees specialize, develop most of the language of topical bills, and oversee the implementation by the relevant administrative agencies–which are even more specialized. Interest groups who care about niche issues can therefore easily locate and lobby the policymakers who most control their fate, providing electoral support (including campaign donations) to helpful committee members. Constituent groups also lobby on behalf of helpful (and against disagreeable) agencies. In most cases, the rest of the legislative and executive branches will pay little attention to this cozy relationship, and a hardened three-way bond of mutual indebtedness will grow over time. This is called an “iron triangle.” (Follow the link for a very useful illustration.) Well-financed interests consistently succeed in currying favors from the other two members of the iron triangle, and poorly financed public interests generally fail.

So far so good…

Yet this “stability is punctuated with periods of volatile change” (Baumgartner and Jones, 1993, p. 4). One major source of change, they argue, is “an appeal by the disfavored side in a policy subsystem, or those excluded entirely from the arrangement, to broader political processes–Congress, the president, political parties, and public opinion” (Jones & Baumgartner, 2005, p. 5). Coupled with venue shopping, disfavored advocacy coalitions will attempt to reshape the debate over the policy at hand (Baumgartner and Jones, 1993, pp. 25-38). If they succeed on both counts, they can sometimes effect a specific policy change that was impossible when the dominant coalition was able to define the issue from within an iron triangle. Hence, U.S. policymaking is characterized by a series of punctuated equilibriums; rather than moderate stability and incremental change, policies will be very stable for years, even decades, only to be radically reformed during brief windows of widespread attention.

The fact that Senator Stevens’ speech is now booming down the “series of tubes” illustrates that this issue is hot right now. This has become a major focal point of for-profit companies (Google, Amazon) and major non-profits, tech (EFF, Free Press, CDT, Public Knowledge) and non-tech (Christian Coalition, MoveOn) alike. They have finally punctured through the public consciousness on this issue.

But this cannot and will not last forever. These companies and groups have other issues to attend to, but telecom and cable can wait all decade. The media will soon stop giving airtime to network neutrality, whatever the outcome. Remember the Clintons’ push for universal health care? The number of uninsured has only risen since 1994, but media and public attention has gone down. Not even life-and-death issues can stay on the brink forever.

Now, I visited with a few friendly congressional staff about the DMCA a few months ago–an issue where my side is massively outgunned–so I certainly understand the dynamic of the iron triangle. But the problem is that Herman doesn’t extend his analysis to what happens after network neutrality regulation passes.

Regulations don’t magically enforce themselves. They’re enforced by fallible–maybe even corruptible–bureaucrats, who have to take the sometimes-vague directives of Congress and translate them into detailed policy decisions. If the law has ambiguities in the statute–and every statute does–the impact of the law will depend crucially on how those ambiguities are resolved.

So let’s say Herman is right and the good guys have limited resources with which to wage this fight. What happens once network neutrality is the law of the land, Public Knowledge has moved onto its next legislative issue, and the only guys in the room at FCC hearings on network neutrality implementation are telco lawyers and lobbyists? The FCC will interpret the statute in a way that’s friendly to the telecom industry, for precisely the reasons Herman identifies. Over time, “network neutrality” will be redefined and reinterpreted to mean something the telcos can live with.

But it’s worse than that, because the telcos aren’t likely to stop at rendering the law toothless. They’re likely to continue lobbying for additional changes to the rules–by the FCC or Congress–that helps them exclude new competitors and cement their monopoly power? Don’t believe me? Look at the history of cable franchising. Look at the way the CAB helped cartelize the airline industry, and the ICC cartelized surface transportation. Look at FCC regulation of telephone service and the broadcast spectrum. All of those regulatory regimes were initially designed to control oligopolistic industries too, and each of them ended up becoming part of the problem.

Now, those changes are going to be very gradual. It might start with a requirement that all ISPs register with the FCC and pay a small fee. Once that registration is in place, maybe the telcos will probably encourage the FCC to extend the various mandates that now apply to their infrastructure–CALEA, universal service, E-911, public access channels–to everyone offering broadband access. Then maybe Congress to pass some legislation requiring all ISPs to take various efforts to battle kiddie porn, piracy, spam, viruses, etc. The FCC will start issuing regulations telling you what kind of routers you need to comply with all the various congressional mandates.

Pretty soon, the regulatory thicket will get so dense that it will be impossible to get into the Internet business unless you’ve got a full time lawyer on staff. A few years after that, success as an ISP will require you to hire several lawyers and a good telecom lobbying firm. A few years after that, the incumbents will have made the rules so complex that entering the market is effectively impossible.

Complexity is the enemy of the public interest in political debates. Any issue that doesn’t fit on a bumper sticker is a sitting duck for special interests, because it’s impossible to get the public excited about it–and even if the public does get excited, it’s too easy for special interests to mislead them about what’s going on. Regulatory issues are inherently complicated. Which means that once you use public pressure to set up a regulatory scheme, you’re not likely to be able to use public pressure to influence its evolution. The evolution of the regulatory scheme will be driven by the best-organized interest groups, which will not, sad to say, be Public Knowledge and EFF.

Finally, it’s important to note that the iron triangle goes both ways: once you pass network neutrality regulations, repealing them will be very difficult. This follows from the same iron triangle analysis he used above–if the telcos figure out how to use the rules to their advantage, they’ll lobby just as hard against repealing them. (just look at the legal fight to liberalize cable franchises) Which means that no matter how competitive the broadband market gets (and there could easily be dozens of wireless broadband providers a decade from now) the regulations will likely stay on the books.

Herman clearly understands how Congress works, and why it often doesn’t work to the benefit of the public. But he seems to have a blind spot when it comes to the regulatory process. In fact, the regulatory process works the same way that the legislative process does. The good guys are at a disadvantage there for all the same reasons they’re at a disadvantage in Congress. Given that political institutions do such a bad job of protecting the interests of consumers, why would we want to give them more power over the Internet?

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