The FCC: Part Two. On the Death of Competition.

Chapter One

The Coase Theorem.

Let’s set the table with some familiar economic faces from our Chicago School days. Recall that one of the influential economists from Chi-Town was Ronald Coase, who hung with the likes of Frank Knight, Aaron Director, George Stigler and Milton Friedman, among others. Friedman’s role was in defending Coase at an infamous gathering of Chicago economists assembled to debate the merits of what is known as the Coase Theorem. As the story goes, Uncle Stinkyfart was the lone supporter among scores of economists at a nerd house party. By the end of the night, Friedman had flipped the entire group in support of Coase.

Here’s the theorem, in a nutshell.

A famous British economist named Arthur Pigou published a theory that lower prices spurred consumer spending, which in turn spurred investment that contributed to full employment.

The key to Pigou’s theory was that government had a role in regulating the market and creating conditions that favored low prices and support of the lower classes to be able to buy things. Coase felt his contribution to the world was a rejection of this theory on the principle that government intervention carried external costs that were, in a roundabout way, contributing to market inefficiencies.

Government, to Coase and other rising Chicago School stars, is perhaps the prime example of what they refer to as externalities. Something outside of the most fundamental elements of a transaction that add to the cost of it. The idea being that, absent such externalities, the market is the most efficient way to transact. And to illustrate his case, he actually used the FCC allocation of spectrum as his prime example, and here’s where our stories intersect.

Quoting from one of my favorite books, as you well know, called The Illusion of Free Markets, by Bernard Harcourt:

“In 1959, Coase had published an article called ‘The Federal Communications Commission,’ in which he argued that broadcast frequencies should be allocated in a manner that takes into account economic efficiency—specifically, that frequencies should be assigned to higher-value users.”

Translation: Don’t create a bureaucratic structure that hands out licenses based on fairness or any measure other than someone’s ability to pay for it.

Translation to the translation: Just give broadcast licenses to rich people.

So, this is a massively important point because the Coase Theorem, applied originally to spectrum allocation, would be adopted on a wholesale basis by nearly every administration from Reagan forward. Essentially, what Coase was arguing was that spectrum was finite, and therefore scarce. But since government oversight carries hidden costs, or externalities, by nature of its intervention—people, rules, red tape, etc.—it artificially increases the cost of spectrum.

Therefore, instead of adding to the cost of something like a radio or television frequency, it should simply set a high price and get the fuck out of the way. The intention there is to maximize the one time purchase price with little to no intervention or barriers to entry, but to the highest bidder, thereby placing this all important information vehicle out of reach of everyday citizens and into the hands of the monied class. And that’s exactly what happened. It’s also exactly why sometimes we need to take the words and ideas of economists with a grain of salt.

Now, because I feel like we’ve worked through a great deal of free market theory, Unf*ckers are prepared to dig a little deeper. So, if I can beg your indulgence for a moment, I want to reference an interview with Duke University research and economics professor Steve Medema, a prolific author who has covered Coase extensively. This interview was actually during his tenure at the University of Colorado and he does a really good job distilling the Coase Theorem, how it has no practical application and how it was applied in unlikely, and in my opinion, dangerous arenas:

Medema: “The Coase theorem is one of the more fascinating ideas in the history of post-war economics. And what’s particularly interesting about it is that it’s attracted an enormous amount of attention—literally thousands of academic articles dealing with it—in spite of the fact that it deals exclusively with a world that doesn’t exist.”

 

Interviewer: “That’s the fiction part.”

 

Medema: “That’s the fiction. It’s theoretically nice, tight and actually quite amazing and wonderful in a lot of ways but it has absolutely no real-world applicability whatsoever.”

 

Interviewer: “But what’s the legal part?”

 

Medema: “The legal part is that the theorem deals with the assignment of legal rights and it tells us that no matter what judges do, in a frictionless world there would be no impact whatsoever on the allocation of resources in society. So, in essence, it says law doesn’t matter, institutions don’t matter in a frictionless world. And the idea happened to captivate the minds of all sorts of people, particularly at the University of Chicago, but also a lot of other places, and in fact became part of the basis—especially the ethical basis—for the whole economic analysis of law.”

Something I definitely want to make clear, from what I understand, Coase himself was disappointed that his legacy was tethered to the interpretation of what he considered to be a theoretical foundation for economic examination of externalities. I don’t believe he intended it to be a doctrinal element of neoliberal politics and the basis for legal analysis of economic questions.

That being said, a great example of this happening was Antonin Scalia, who considered the Coase Theorem to be a fundamental truth. Not only did he frequently cite it, it’s enshrined in the teachings at the George Mason law school that bears his name.

Medema published a research paper that documents 36 cases in which the Coase Theorem is specifically cited in the opinion and 4,000 others in which it is referenced. So, this small idea that was intended to inform an approach to measuring efficiencies in a given system, was extracted from the theoretical universe and placed squarely in the real world. And it has had real world consequences in our politics and our legal system.

But, where it matters to us today, is that it grew from a model based on the FCC’s treatment of spectrum allocation. It became so fundamental to our understanding of who should control the media in this country that policy makers, legal experts, economists and broadcasters themselves understood this to be the law of the land. And, there’s no question that the germ of this idea that started in a house party of nerds in Chicago became the North Star of neoliberalism and the beginning of the end of fairness, competition and equal time.

Chapter Two

Reagan and Clinton. The best QB & wide receiver combo in the game.

Dan Rather on consolidation, 2012:

“We’ve reached the point now with media consolidation that no more than six—my count is four—but no more than six large international corporations control at least 80% of the true national distribution of news in this country. And these very large corporations, news is a small part of what they do. They make defense department products, they run theme parks, they have all kinds of issues in Washington. They need legislation stopped. They need legislation put in to benefit them. They need legislation passed and need legislation to stop.

 

“And so, forgive my reporter’s language, if you must, we have a situation in which very big business is in bed with very big government in Washington. Whether that government be controlled in a given time by Republicans or Democrats. And for their mutual advantage they work together. What the big corporation wants are things that Washington can give. What any administration—people in power in Washington—want, they don’t want reporters digging around on the stories that can embarrass them; they want what’s known in the trade as sweetheart coverage. This is a collaboration at the top. I’m not suggesting some widespread conspiracy, if you will, but this is the way things now work.”

“Reagan’s eight years in office seemed at times dedicated to destroying the independence of the media,” writes Brian Karem in Free the Press:

“The [Reagan] administration expanded the number of television stations any single person or company could own from seven to 12 in 1985. Reagan abolished guidelines for minimal amounts of non-entertainment programming 1985. In 1985, the FCC dropped guidelines for how much advertising could be carried. By deregulating the industry, he allowed fewer owners to make greater decisions, ensuring a survival-of-the-richest scenario. But the coup de grâce was in 1985 when FCC Chairman Fowler…”

Remember him, Unf*ckers?

“...FCC Chairman Fowler began dismantling the fairness doctrine. That year, the FCC released a report on general fairness doctrine obligations that stated that being fair hurt the public interest and violated free speech rights guaranteed by the First Amendment.”

So, this is part and parcel of what we covered in Part One. This period made for strange bedfellows, with liberals arguing that the doctrine wasn’t in conflict with free speech, conservatives defending the First Amendment when it suited them, broadcasters telling Congress that they actually thought the doctrine was good, but not perfect, and so on. We litigated that enough.

The part that I want to focus on is the move in 1985 to loosen the ownership standards. This was a critical move done to theoretically allow for greater competition through consolidation, the most counterintuitive argument ever made. And, of course, it resulted in the situation described by Dan Rather in the excerpt above.

This is where Bill Clinton picks up a 50 yard pass from Ronald Reagan several years later. By expanding the limits of spectrum ownership within individual markets, Reagan loosened the cap on the bottle of deregulation. Midway through the Clinton years, Bill Clinton twisted it off completely and let the genie out with the Telecommunications Act of 1996. Let’s hear from Clinton himself and invite his id to translate.

Bill: “This historic legislation, in my way of thinking, really embodies what we ought to be about as a country and what we ought to be about in this city. It clearly enables the age of possibility in America to expand to include more Americans.”

Bill’s id: Ah, the opening platitude. The age of possibility. This is where I squint a bit and bite my lip. Works every time.

Bill: “It will create many, many high wage jobs.”

Bill’s id: There’s the first must have. First rule of legislation. Just say it will create more jobs.

Bill: “It will provide for more information and more entertainment to virtually every American home.”

Bill’s id: Unless you’re really poor and live in a rural area, because we’re going to let the market determine who gets the internet, unlike that time we forced the phone companies to extend service to everyone in the country. Because I’m the face of neoliberalism. Don’t take my word for it, just listen to the three part series UNFTR produced on my time in office.

Bill: “It embodies our best values by supporting the kind of market reforms that the vice-president mentioned, as well as the v-chip.”

Bill’s id: That’s a thing Al Gore really wanted so parents could manage what their kids watch. I’m sure that’s gonna work out great and that every single kid in America won’t see hard core porn by the time they’re five years old.

Bill: “And it brings us together. And it was passed by people coming together. This bill is an indication of what can be done when Republicans and Democrats work together in a spirit of genuine cooperation to advance the public interest and bring us to a better future.”

Returning to Karem to describe the act Fairness & Accuracy in Reporting called “bought and paid for by corporate media lobbies.” Here’s Karem:

“The Telecommunications Act of 1996 was the first significant overhaul of the country’s telecommunications law since the Communications Act of 1934. The act’s stated objective was to open up markets to competition by removing regulations and barriers to entry, the idea being that with the emerging internet and cable television markets, anybody in the world should be able to jump in and compete. It was sold as a way to lower the barriers of entry into the market, making for greater competition and democratization of the telecommunications world…In other words, it only encouraged the monopolies that the act stated it would help prevent. Instead of allowing more competition, it only made it easier for the monopolies to gobble up smaller companies, becoming larger and more dominant along the way.”

And that’s exactly what happened. Public companies went into a feeding frenzy, buying frequencies at absurd multiples. As consumers eventually moved away from broadcast media with the rise of the tech giants, these high prices would eventually come back to haunt them. But it had the opposite effect of the stated goal of increasing competition; because the only companies that could afford to buy these frequencies were either public companies or venture-backed companies seeking to go public. In a matter of a few years, individual operators in the biggest media markets had cashed out, and in their place conglomerates shrunk staffs, streamlined programming to cut costs, relied on national formats that killed market specific identities and all but eliminated public benefit programming.

Spectrum had been fully commoditized.

Choose Your Master

So that’s the broadcast side of things that’s often overlooked because the headlines behind Telecom ‘96 were more about the internet. It was unclear to most Americans just how important the internet would become in all of our lives, but that’s where the Clinton administration really had some keen insight. Remember that Al Gore invented the internet. In all seriousness, you might remember from our Clinton series that the administration was very connected to Silicon Valley, and the so-called New Democrats were keen to harness the tech sector in support of its anti-poverty initiatives.

There was a true belief, and much of it justified, that the government needed to clear the barriers to entry to telecommunications that had been previously restricted when the baby bells were broken up. The fear at the time, again that was founded to a large degree, was that the companies most appropriate to invest in lighting up the nation with access were the telecom companies. Before wireless, fiber and cable, it was the phone companies that were seen as the primary access points to bringing consumers the internet. Without the ability to transform this access nationally, many feared the United States would lag behind other nations because it restricted investment into infrastructure.

The stated goal of the bill was to, “accelerate the deployment of an advanced capability that will enable subscribers in all parts of the United States to send and receive information in all its forms—voice, data, graphics, and video—over a high-speed switched, interactive, broadband, transmission capability.”

As usual, the United States—particularly under the New Democrats who were in power at this all important intersection of technology and demand—pursued a market approach to solve the problem of connectivity. Incentives were given to large corporations, very few restrictions were placed on them and as many obstacles were cleared as possible. Did it work? You bet. That’s why the United States is so competitive in the digital arena. And I’m not just talking about tech companies, though they were certainly among the largest beneficiaries of deregulation. But our entire financial and banking system. Communications and supply chain. You name it.

On the other side of the world, the next closest competitor is of course, China. And there’s an argument to be made that China is ahead of us in terms of connectivity and internet usage. China pursued a centralized planning route that brought it to the same point as the United States and forced the birth of a tech sector. Europe, on the other hand, lags behind because of the fractured nature of regulations, privacy issues, national interests and lack of whole-Europe conglomerates. It is, after all, made up of different countries.

And now, the United States is beginning to compete with China in other areas of the world such as Africa, and they’re both encroaching on the Mediterranean, which has fallen significantly behind other parts of the world. China calls this the “Belt and Road Initiative,” which is commonly referred to as the Digital Silk Road.

The point is that we cannot dismiss the gains that were made to modernize the economy, foster the tech sector and set us up for success to compete in the coming years.

There’s always a flip side. Ours is that we’re beholden to the tech giants and conglomerates who rule the airwaves and the internet. China is of course beholden to the interests of the CCP. In our case, our data is owned by private companies. They determine what we see, hear and purchase. In China’s case, their government does. Let me ask you. Is there a difference? In Europe, they’re leading with security and privacy first. In the U.S. and China, these ships have sailed.

Did it Work?

A Brookings analysis by Stuart Brotman, 20 years after deregulation, offered a muted but sanguine review of its effectiveness. I’ll go through the high points of his critique, then offer my two cents before the next chapter.

“By 2001, concentration within the industry actually increased, with only four companies in the United States handling 95 percent of local telecommunications service: Verizon, SBC, BellSouth and Qwest.”

“According to the United States Telecom Association, broadband providers have made $1.4 trillion in capital investments from 1996 through 2014.”

“And the National Broadband Map shows that all parts of the country (50 states, along with all U.S. territories) now have broadband service, as the law intended. Competition from new entrants, notably Google, has provided competitive incentives for upgrading the speed of fixed broadband even further. Today, fixed broadband at 100 mbps download or greater is available to 65 percent of Americans, up from only 11 percent in 2010.”

“Competition remains vigorous in mobile broadband, which has virtually universal availability, with 97 percent of Americans able to choose among three or more mobile providers.”

“These metrics do not demonstrate that the Telecommunications Act of 1996 was an unqualified success, but they are evidence of the law’s real economic and consumer benefits.”

So here’s the two cents before we get into the next chapter, which illustrates the true problem with our approach to communications.

Building a national infrastructure is daunting and requires a coordinated investment. Here at home, we chose to mint the tech sector. In return, they’ve recorded unfathomable profits, and are completely in control of our data and the information we consume. And what Americans got in return for this is Donald Trump, stagnant wages and unequal access to broadband. In China, they got the same or better in terms of technology, but have also ceded their privacy and digital lives to a central authority. Not better. Probably worse. Different.

Europe is taking its time. Deciding first and foremost how to protect the consumer. It might lag behind in terms of competitiveness and technology, but it has placed the consumer at the center of the debate.

So it sounds like there’s a fair argument for the free market versus a centralized approach like China’s. In terms of privacy and being at the mercy of either corporations or a central government, at least Verizon and Google don’t have the power to incarcerate. But in terms of the economic argument, consider this.

More than 500 other communities around the country operate publicly owned internet networks. In general, these networks are cheaper, faster, and more transparent in their pricing than their private sector counterparts, despite lacking Comcast and Verizon’s gigantic economies of scale. Because the people operating municipal broadband networks serve communities rather than large shareholders on Wall Street, they have a vested interest in respecting net neutrality principles.

In fact, an article in Fast Company covered the “unequivocal success” of an effort in Chattanooga, Tennessee to build its own high-speed network. According to Consumer Reports:

“Chattanooga’s municipal broadband network is the top-rated internet provider in the entire U.S.”

This tracks with one of our familiar themes, and that’s the assumption that privatization is always superior to public services. And it’s a great jumping off point for our next chapter.

Chapter Three

Title II and Net Neutrality. Pick a side, any side. As long as it’s the side of big business.

I’m excited about this next chapter, Unf*ckers, because it allows me to set this up with an excerpt from a listener’s essay on the FCC. More than a year ago, I received a message from a listener named Tristin E., a political science student at a college in Los Angeles with a deep interest in many things, including the FCC’s role in undermining net neutrality.

I flagged the email at the time after reading his essay on the subject and returned to it when I was putting this episode together. I asked Tristin if he would allow me to source him for the episode, and he responded graciously. Yet another example of the powerful collaborative nature of our journey together here. Let me begin with Tristin’s framing of net neutrality as a concept before digging further into his explanation of the issue we face as consumers. Here’s Tristin:

“Net neutrality advocated viewing the complete neutrality of content delivery as the cornerstone of the open internet. A bill was proposed in Congress mandating by law to prevent internet service providers from practicing data discrimination as a competitive tactic. Verizon lobbyists shot this down shortly after its initial discussion. Surprisingly, many organizations support a free and open internet; Google, Facebook, Amazon, Microsoft, and many human rights activist groups all believe that an open internet is critical for the democratic exchange of ideas and free speech.”

I like this because, like the fairness doctrine debate illustrated, not all participants have the same view. Of course, this one is more logical. It makes sense that the providers of service would be opposed to the government dictating its terms of service. On the other hand, it benefits the tech giants greatly to have an open internet with as many users surfing at high speeds.

Now, back to Tristin to explain the concept more fully:

“In 2002, the term net neutrality was born. The concept was proposed in response to efforts by the FCC to require Internet Service Providers to share their infrastructure and cable lines with other ISPs. After much debate, the Supreme Court finally struck down the regulation, siding against in National Cable & Telecommunications Association v. Brand X Internet Services. The main sticking point was whether Internet Service Providers were considered information services, similar to traditional media outlets, which allow users to upload and share content on the internet. In 2015, new net neutrality guidelines were established, which barred providers like Comcast or Time Warner Cable from deliberately throttling internet traffic from specific websites based on demand or business preferences.

 

“The concept that all data on the internet should be treated equally is the foundation of net neutrality, forcing all companies, governments, and organizations to treat all content equally, regardless of user, platform, or application. Net neutrality requires all internet service providers to provide equal access to all internet traffic and that no one service or website can be blocked or throttled.”

It was big news toward the end of the Obama administration that we would pursue a path toward a more open internet. Former Chairperson Tom Wheeler celebrated the FCC’s commitment to an open internet in 2015, only to see this work completely undone by the Trump administration just under two years later.

John Oliver has actually done two full features on the issue of net neutrality, which should tell you something about the importance of it. His first piece was such a success that his audience wound up crashing the FCC’s website. The second one revealed the emergence of Trump’s FCC hatchet man and bad guy in our story, Ajit Pai.

Both episodes are terrific, if you want to take a closer inspection on this particular issue.

On with our story today, let’s take a closer inspection of Ajit Pai himself.

Prior to ascending to the top of Trump’s FCC, Pai had a fairly distinguished legal career. His last place of employment was a large law firm called Jenner & Block, which is known for its revolving door. And… what’s this? He was also counsel at Verizon from 2001–2003.

In 2017, Republican Ajit Pai effectively gutted net neutrality rules in the United States and ended the era of the internet as a public utility.

While his ruling would make him something of a villain in Democratic circles—especially among those who advocated for personal internet freedoms and greater consumer protections—it was actually Barack Obama himself who appointed Pai to the FCC in 2012 on the recommendation of Sen. Mitch McConnell of all people.

Pai was unanimously approved by the Senate, and he went on to thank Obama for the appointment five years later by killing the Obama-era rules adopted in 2015 that served as the basis for net neutrality and broadband regulations. Pai—as with most FCC chairs throughout recent history—is a free-market capitalist who believes greater competition and less regulations are a boon to consumers.

Here’s the basis of Pai’s argument, according to the FCC’s 2017 ruling:

“We determine that this light-touch information service framework will promote investment and innovation better than applying costly and restrictive laws of a bygone era to broadband internet access service.”

In citing Telecom ‘96, Pai argues that Congress intended to draw a line between “highly regulated ‘information services’ and more heavily regulated ‘telecommunications services.’” And that’s essentially where the distinction lies between the two competing groups. Pai’s predecessor, Tom Wheeler, ruled in the opposite direction in 2015, classifying broadband services as a telecommunication service under Title II of the Telecommunications Act. Title II is important, and we’re going to come back to this in a moment.

Pai went on to say that Congress promoted the development of the internet to “preserve the vibrant and competitive free market that presently exists… unfettered by Federal or State regulation.”

While proponents of greater regulation of Internet Service Providers and net neutrality—a term coined by Columbia Law School professor Timothy Wu—fought hard to protect consumer interests, Pai’s ruling was hardly surprising. Pai’s biography on the FCC’s website—a government entity—reads like a love letter to unfettered capitalism:

“Chairman Pai’s regulatory philosophy is informed by a few simple principles. Rules that reflect these principles will result in more innovation, more investment, better products and services, lower prices, more job creation, and faster economic growth. Consumers benefit most from competition, not preemptive regulation. Free markets have delivered more value to American consumers than highly regulated ones.”

Title II

We need to distinguish between net neutrality as a concept and Title II as a statute. Net neutrality is a concept within a larger one, and that is how broadband is classified. Neutrality specifically considers whether internet providers are common carriers. Common carriers are required to deliver the same service to all classes of consumers. And that’s an important part of the equation. But the larger idea behind Title II was to treat internet providers as utilities, which carries far more weight than simply customer service.

Full adoption of Title II, which is what we had for a brief moment at the end of Obama’s term and the rewriting of the rules under Pai in 2017, would reclassify broadband as a utility and require companies to do things like:

• Replace old networks that are being decommissioned.

• Ensure that everyone has equitable and affordable access to broadband.

• Build in resiliency to prevent blackouts and downtime.

• Offer universal service to prevent digital redlining.

• Schedule replacement and maintenance to better prepare for emergencies.

• Mandate that Unf*cking the Republic is universally available and accessible to all.

The pandemic changed the conversation completely. Thankfully. Though it didn’t necessarily change our approach. But at least it demonstrated the value of universal access to high-speed broadband in education, healthcare, emergency services and work.

Senator Ed Markey has introduced a bill that will help the country get back on track and restore the authority to the FCC to re-chart the path to net neutrality. Here’s a good, quick analysis from the Electronic Frontier Foundation:

“The Net Neutrality and Broadband Justice Act and its companion in the House of Representatives aim to put a stop to these abuses by reclassifying broadband internet services as telecommunication services under Title II of the Communications Act, thereby giving the Federal Communications Commission (FCC) the authority they need to reinstate net neutrality and lay down equitable rules of the road once more.

 

“While the bill is narrow, what it does is important: it prevents the FCC from reclassifying broadband internet services again in the future. The bill stops the back and forth we’ve experienced, with one FCC instating net neutrality rules, only for another to strip away those protections.”

It’s still too early to tell whether Markey is going to get much support for this. Right now, it’s in committee, so we’ll see what it looks like when it emerges and is marked up. If anything, what will hold it back is the shift from FCC regulation to law. The back and forth the foundation describes. So long as it stays as a regulatory maneuver, it will ebb and flow with whoever is in power. Once it’s law, it’s law, so I have to imagine the lobbies are in full offensive, battle formation to block attempts to codify Title II.

Chapter Four

Bring it home, Max.

Here’s an excerpt of a video from the acting chairwoman of the FCC illustrating a few essential points for us. Let me start by saying that she is an advocate for net neutrality and is only in an acting capacity, but I would consider her an ally in this effort to a degree. But there’s more to unpack here:

“Hi, I’m Jessica Rosenworcel, the acting chairwoman of the Federal Communications Commission. In May, the FCC launched the $3.2 billion Emergency Broadband Benefit program, the largest program ever to help Americans afford broadband service. In just five months, we’ve already enrolled over 5.5 million households who are receiving up to $50 or as much as $75 off their monthly internet bill.

 

“Separately, we have created the Emergency Connectivity Fund, the largest effort in our nation’s history to make sure that all students have access to the broadband and devices they need outside of school. And during this program’s first application window, we received requests for over $5 billion to fund 9.1 million connected devices and 5.4 million broadband connections. The overwhelming response to these programs demonstrates one thing: there is real demand for help with broadband affordability.”

No, acting chairwoman, it proves something altogether different. That the free market will never step in to provide such an essential service in the modern economy. Only the government can make this happen, thus proving the necessity for more clear and robust oversight over connectivity to close the digital divide.

I’m not criticizing the acting chair. She’s doing what is in her power right now to respond to the need for access. To help the students in poor and rural communities who didn’t have access during the pandemic and are suffering severe learning gaps now that schools have fully returned to in person. Those who suffered quietly without access to quality care and were limited by broadband inefficiencies. Those who weren’t able to thrive in certain white collar industries tailor made for remote work because of unstable connections.

The chair’s exuberance over the demand for service, the volume of requests for relief on monthly bills, the money required to fill in the gaps left by tech companies, the reality of digital redlining; all evidence that the free market isn’t free. Corporations require regulations and commands. They will never simply elect to serve the public good, which is why the FCC in this case has to spend billions of dollars covering their asses. It’s such a farce. Then there’s the fact that they’re all leveraging technology literally created by the government.

The externalities that were so anathema to Coase and his ilk were typically measured in costs such as price, regulations and wages. All referred to in negative terms. Externalities. More modern thinking is thankfully putting externalities in their proper place. Neoliberal economists price in factors like wages and regulations as negative externalities and try to eliminate them. Modern thinkers understand that the most prominent and deleterious externalities is greed. And when you live in an inverted totalitarian state run by corporations, it is the single greatest factor there is.

Water. Sewer and stormwater infrastructure. Health insurance. Energy distribution. Public education. Prison. The military. The internet. None of these should be in the hands of private enterprise, and yet here we are. You think Ajit Pai was just some sort of Chicago School free market acolyte? Nah. Just another fucking corporate shill who moved effortlessly through the revolving door. Today, he’s a partner at a huge private equity firm in New York called Searchlight Capital that specializes in broadband, telecommunications, fiber, online payment systems, cable systems and managed IT among other niches, because of course he does and of course they do.

We need Markey’s bill to succeed. I’m not sure if we have the time or it has the momentum to move ahead in this Congress though. If Dems hold the Senate, perhaps it can continue; but should they lose the House, it’s unlikely to find a home until the next time around.

Humans aren’t externalities.

Public services shouldn’t be privatized.

Fuck Ajit Pai.

Here endeth the lesson.