The FCC is pushing for net neutrality again, warns columnist Holman Jenkins in the Wall Street Journal. He writes that a key goal is, “an unstated agenda to deliver bandwidth to cable’s competitors at a price that suits those competitors.”
That’s ironic, Jenkins notes, since creative destruction is busy giving us new and better ways to get programming. Meanwhile, Washington may step up and save the failing cable business. “Cable distributors, once as popular in Washington as health insurers, become a new protected class just as technology and competition are dictating that their heyday is over.”
And that brings us back to the reason Goldman is only offering its Facebook investment to foreigners. After the investment bank announced plans to sell Facebook shares to its richest clients the federal Securities and Exchange Commission started making noises about possibly investigating the sale. “Experts on securities law said Goldman’s switch reflected the strict regulatory climate in this country,” the L.A. Times explained.
The odd thing here is that Goldman’s sale would have been limited to its millionaire clients, people who could presumably afford to lose money but are presumably good enough investors that they’re unlikely to do so. It’s overregulation in the service of protecting folks who don’t need the protection.
Facebook may succeed, as Amazon.com and Google have. Or it may crash and burn, as Pets.com and MySpace did. What’s important is that it be allowed to succeed or fail on its own, without support or opposition from the government.
Creative destruction, “revolutionizes industries and ultimately multiplies productivity and value,” Wu writes. It is especially important to maintain on the Web. After all, “where information is the ultimate commodity, the multiplier effect is incalculably great.”
That’s a lesson that rent seeking companies and federal regulators should take to heart.