Adam Thierer, Senior Research Fellow at the Mercatus Center discusses his recent working paper with coauthor Brent Skorup, A History of Cronyism and Capture in the Information Technology Sector. Thierer takes a look at how cronyism has manifested itself in technology and media markets — whether it be in the form of regulatory favoritism or tax privileges. Which tech companies are the worst offenders? What are the consequences for consumers? And, how does cronyism affect entrepreneurship over the long term?
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The Mercatus Center at George Mason University has just released a new paper by Brent Skorup and me entitled, “A History of Cronyism and Capture in the Information Technology Sector.” In this 73-page working paper, which we hope to place in a law review or political science journal shortly, we document the evolution of government-granted privileges, or “cronyism,” in the information and communications technology marketplace and in the media-producing sectors. Specifically, we offer detailed histories of rent-seeking and regulatory capture in: the early history of the telephony and spectrum licensing in the United States; local cable TV franchising; the universal service system; the digital TV transition in the 1990s; and modern video marketplace regulation (i.e., must-carry and retransmission consent rules, among others.
Our paper also shows how cronyism is slowly creeping into new high-technology sectors.We document how Internet companies and other high-tech giants are among the fastest-growing lobbying shops in Washington these days. According to the Center for Responsive Politics, lobbying spending by information technology sectors has almost doubled since the turn of the century, from roughly $200 million in 2000 to $390 million in 2012. The computing and Internet sector has been responsible for most of that growth in recent years. Worse yet, we document how many of these high-tech firms are increasingly seeking and receiving government favors, mostly in the form of targeted tax breaks or incentives. Continue reading →
Adam Thierer and I have warned that neutrality regulation, once imposed on broadband providers, will
extend to other Internet services wherever “gatekeepers” are alleged to control access to a platform used by others. In short, the slippery slope of creeping common carriage is real and we’re already heading down it, with cyber-collectivist “luminaries” like Jonathan Zittrain and Frank Pasquale demanding neutrality regulation for devices, application platforms like iTunes and Facebook, and search!
TLF Reader Jim Reardon made a particularly astute observation on my post asking whether Americans really want net neutrality regulation:
Regulation of any service, product or industry is preceded by definition. Once defined, it is subject to taxation.
[Net Neutrality regulation] is a prelude to taxation of Internet products and services. It will likely start with telephony services and proceed accordingly to financial services, and continue from there.
As such, the activity is essentially neutral insofar as technology innovation is concerned — so long as applicable taxes are paid the government will ensure that the service is not disfavored by the network operators.
Absolutely right! One of the greatest barriers to government regulation and taxation of the Internet today is the lack of clear definitions: The FCC rules will tell you precisely what “cable television” or “commercial radio” mean, but the concepts of “social networking,” “Internet video,” “blogging,” and even “search” are indeterminate and constantly evolving.
Ronald Reagan once quipped:
Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.
Fortunately, government’s
ability to implement this view depends—to paraphrase President Clinton—”on what the meaning of the word ‘is’ ‘it’ is”: Allowing “it” to remain beautifully amorphous may be the best way to keep government at bay.
by Adam Thierer & Berin Szoka — (Ver. 1.0 — Summer 2009)
We are attempting to articulate the core principles of cyber-libertarianism to provide the public and policymakers with a better understanding of this alternative vision for ordering the affairs of cyberspace. We invite comments and suggestions regarding how we should refine and build-out this outline. We hope this outline serves as the foundation of a book we eventually want to pen defending what we regard as “Real Internet Freedom.” [Note: Here’s a printer-friendly version, which we also have embedded down below as a Scribd document.]
I. What is Cyber-Libertarianism?
Cyber-libertarianism refers to the belief that individuals—acting in whatever capacity they choose (as citizens, consumers, companies, or collectives)—should be at liberty to pursue their own tastes and interests online.
Generally speaking, the cyber-libertarian’s motto is “Live & Let Live” and “Hands Off the Internet!” The cyber-libertarian aims to minimize the scope of state coercion in solving social and economic problems and looks instead to voluntary solutions and mutual consent-based arrangements.
Cyber-libertarians believe true “Internet freedom” is freedom
from state action; not freedom for the State to reorder our affairs to supposedly make certain people or groups better off or to improve some amorphous “public interest”—an all-to convenient facade behind which unaccountable elites can impose their will on the rest of us.
Continue reading →
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.