Nobody reasonably doubts the need for responsible regulation.\u00a0 It’s for that reason that we need to understand the limits of reasonable regulations, and the risks that come from the temptation to exceed them.<\/p>\n
Last week as a bad week for bad regulation.\u00a0 First, this example of entrenched industries<\/a> using regulators to further their own interests at the expense of their customers:<\/p>\n The National Association of Broadcasters is lobbying Congress to stipulate that FM radio technology be included in future cell phones.<\/p>\n In exchange, the NAB has agreed that member stations would pay about $100 million in so-called performance fees to music labels and artists. Radio stations would be required to pay performance royalties on a tiered schedule with larger commercial stations paying more than smaller and non-profit stations.<\/p><\/blockquote>\n FM radio now has to compete not only with AM, but with all manner of streaming media.\u00a0 So of course, they want the government to force their competition to pay the freight to expand FM’s market.\u00a0 The irony is that the regulators writing these rules are just as clueless: my smartphone already includes an app where I can listen to any local FM radio station.<\/p>\n The other lesson is in the risk of politicizing well-established rules.\u00a0 BP was browbeaten, if you recall, into putting $20 billion into escrow for the executive branch to dispose of as it wishes.\u00a0 Some of us argued at the time that there were rules for how to deal with liability, and that the courts were a better, non-political venue for doing so.\u00a0 Even assuming that Kenneth Feinberg were completely incorruptible personally, he would find himself buffeted by political pressures he – or his administration employers – might feel the need to respond to.<\/p>\n The first, most obvious pressure, is to be lenient in disposing of BP’s money.\u00a0 Feinberg has tried to make it clear<\/a> that he will, in fact, be far more lenient and timely than the courts would be:<\/p>\n Appearing … before about 300 people in Houma, La., Feinberg lectured, cajoled and asserted that once he takes over Monday, the process will be accessible, fast and fair.<\/p>\n “I will be extremely lenient in documentation,” Feinberg said. “I don’t need reams and reams of stuff. I don’t need a tax return. Do you have something you can show me? Well, the ship captain will vouch for me \u2014 fine. Well, my priest will \u2014 fine.”<\/p><\/blockquote>\n