Wednesday, March 23, 2011

Getting past big-is-bad

About a dozen years ago, Richard McKenzie wrote Trust on Trial: How the Microsoft Case is Reframing the Rules of Competition, which argued that modern technology and its applications had overtaken anti-trust law and that the application of the law simply favored rivals who had been left behind.

Yet, the big-is-bad idea is a standard. I listened to a couple of radio-news commentators on the drive home yesterday who fretted over the market share that the AT&T-T-Mobile entity would get. They signed off saying, "the politcians will have to get involved." They will, of course. But they were never not involved.

The spectrum (available to radio, wireless, etc.) has long been likened to real estate, best allocated by market competition. But the FCC likes to do the land use planning (along with pals from Congres and their pals from K-Street). We get the demands of technology moving much faster than the FCC can possibly keep up with.

The Justice Department lost the Microsoft case, but innovation and falling prices continued anyway. In fact, both keep accelerating. I believe that we can take away the lesson that it would be best if the FCC loses this fight too -- if it chooses to fight.