Dingell in the Middle

by on November 9, 2006

The once and future chairman of the House Energy & Commerce Committee, John Dingell, recently supported strong net neutrality regulation (to prevent “private taxation of the Internet”) and opposed cable franchise reform. Now he has warned the FCC that it ought to postpone consideration of the AT&T-BellSouth merger until next year. These positions suggest Dingell believes there are benefits of regulation.

Perhaps he does. Yet, this is the same man who forcefully advocated deregulation when Congress debated the Telecommunications Act of 1996. During the floor debate on Aug. 2, 1995, Dingell noted:

… the rates of AT&T, MCI, and Sprint fly in perfect formation. They fly like the formation of the nuts and bolts in an aircraft, all tied together by invisible forces, which has led to a situation where they all make money and nobody gets into that because of the behavior of Judge Green and his law clerks and a gaggle of Justice Department lawyers and three floors of AT&T lawyers, who have been foreclosing the participation of any other person in or outside of the telecommunications industry.

Regulation, although meant to benefit consumers, was exploited by the regualted entities to maintain higher prices even though computers and fiber optics were driving down the cost of providing service.

Then, when the FCC decided to try to jump start local competition through cost-based unbundling and other gimmicks under former chairmen Reed E. Hundt and William E. Kennard, Dingell went ballistic. For example, here is what Dingell told one trade group on Mar. 2, 1998:

The implementation of the 1996 Telecommunications Act is a shambles. The Commission has chosen to not only perpetuate, but actually increase bureaucracy in virtually every area the Congress had intended to eliminate it….

Two years after the Act was signed into law, the Bell companies have spent more than $8 billion implementing the checklist items. They are arguably no closer to getting the FCC nod to enter long distance today than the day the Act was passed. Worse, each time they file their applications with the Commission, they are forced to submit tens of thousands of pages of documentation. If those mountains of data are actually read by the bureaucrats [at the FCC], it is a waste of taxpayer money bordering on the criminal….

Would it be impertinent of me to suggest a radical idea? And that is, if you want competition to bring down prices, why don’t you just get the hell out of the way and let it happen?

In the same speech, Dingell also demonstrated his legendary ability and inclination to come down hard on hubris and incompetence:

I note that the copy of the National Journal that appeared in my in-box Friday contained a reference to, and I quote, “the arrogant style of Reed E. Hundt.”

This came as a great shock to me. Reed Hundt? Arrogant? Where on earth would anyone get that idea?

Nevertheless, I’ve always concerned myself more with substance than style. (A Polish lawyer from Detroit with my looks has little choice.) And I’m afraid that in terms of substance, the current Chairman may be a few affiliates short of a network.

Regulation is wonderful in theory though rarely in practice. Following the deregulation of railroads, airlines, cable television and telecommunications, service for most consumers improved and prices fell. Net neutrality, video franchising and merger conditions are all attempts to save the regulatory apparatus and will discourage investment in broadband networks. The positions seem a bit curious for someone as enlightened as Dingell, except that there was an election the Democrats needed to win and chairmanships aren’t always handed out solely on the basis of seniority anymore. Dingell is a master politician.

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