If you want another prime example of how self-serving Washington interests often seek to wield the stick of Big Government to their advantage, look no further than the effort the FCC is currently undertaking to extend its “CableCARD” set-top box industrial policy. The regulatory shenanigans here got started 14 years ago with Section 629 of the Telecommunications Act of 1996, which included authority for the Federal Communications Commission (FCC) to meddle in the video equipment marketplace. The FCC used that authority to impose a variety rules on the cable TV industry, such as CableCARD mandates, in the name of expanding device competition and consumer choice. Those regulations haven’t done much other than impose added costs on consumers for very little corresponding benefit. And whatever growth we’ve seen in the market for video devices and services has been more organic and unplanned, and it has come from unexpected quarters (think of Apple and Google’s TV efforts, and television distribution via video game platforms). Nonetheless, the FCC plowed forward today with additional layers of red tape in the hope of extending the CableCARD regulatory regime.
The Consumer Electronics Association (CEA) has long served as the prime cheerleader for this high-tech industrial policy since it would hobble video providers and benefit some of CEA’s members in the process. Indeed, to read through the CEA’s filings on this matter through the years, one is led to believe that CEA views cable systems as a sort of essential facility to which access must be granted in the name of preserving innovation by consumer electronics companies. With the CableCARD mandates, therefore, CEA is asking the FCC to impose a light form of common carrier regulation on the cable industry becuase that would help their interests in the end, regardless of what it meant for innovation at the core of networks.
Now, don’t get me wrong. There are plenty of self-serving people and organizations around Washington. Let’s face it, screwing over your competitors with regulation is what makes the “parasite economy” inside the Beltway tick! But what I find so interesting about this case study is how CEA has vociferously opposed (quite rightly, in my opinion) so many other high-tech industrial policies — the V-Chip, the so-called “broadcast flag,” HDTV tuner mandates, proposals to embed FM tuners in cell phones, and so on — and yet they wholeheartedly endorse the CableCARD industrial policy because the consumer electronics industry would benefit from this particular industrial policy. Sadly, it’s just another example of what Milton Friedman once called the “Business Community’s Suicidal Impulse”: the persistent propensity to persecute one’s competitors using regulation or the threat thereof.
Nobody said capitalists were consistent, folks. It’s capitalism for me, but not for thee.