Bloomberg’s Gotham — where fun and freedom come to die.

Bloomberg’s Gotham — where fun and freedom come to die.

I hate when people smack their mouths when they chew gum.  But I wouldn’t want the Bloomberg administration to pass a law banning it in New York City. The city has better things to do with my tax dollars, such as improving public schools. And yet this is the path the administration seems to be on, as Mr. Moynihan points out in Bloomberg’s Nanny State Targets Street Food.

The Nanny State article shows why regulation can be very dangerous: entrenched competitors, in the form of brick and mortar restaurants, want to use the state to make it more difficult for trucks selling street food to do business. The city encroaches on individual liberty for a private purpose. This should not be the province of city government, or any government, for that matter.

Of course, regulation has another negative consequence: it limits liberty. Smokers were easier targets than the street vendors for the city. That’s why Bloomberg first targeted smokers with his smoking ban in not only bars, but in parks, too. While I am not myself a smoker, I think this was going too far, too. With bars, the argument is that you are in a closed space and so smokers shouldn’t be able to impose their externality on non-smokers. I get it. That is not the case with the park. And yet, unlike with the park, most people go to bars to drink booze and more often than not get drunk. Their purpose is not health. Quite the contrary. Secondary smoke is part of the package. Bars should be free to choose whether or not they outlaw smoking. That will leave the right to choose where it should be — with consumers.

In the case of New York City parks, smokers should have the right to use them, too. I am exposed to all sorts of pollution by choosing to live in New York City. Smelling some smoke in a park is not the worst of them. I hate when people smack their mouths when chewing gum, and when they blow loud bubbles, on the streets and subways. If I were mayor, I would pass a law banning those things, in addition to: sagging pants, tank tops on men, yelling in public, too much perfume (or cologne), too much popcorn eating, too many Yankee hats, live music on weekdays, impromptu music in parks, among others. At some point, such heavy handed regulation by the city will make Gotham the place where freedom and fun come to die.

Antitrust should police Internet hogs, not the FCC.

Antitrust should police Internet hogs, not the FCC.

Recently, the Washington Lawyer ran a great piece called Net Neutrality: Who Should Be Minding Online Traffic?   The article goes back and forth between the extremes of: (1) heavy handed Orwellian like regulation of the Internet by the Federal Communications Commission (“FCC”), and (2) self-regulation and content discrimination by greedy Internet Service Providers (“ISP”). This seems to be a false dichotomy. Even in the absence of heavy handed FCC regulation, which can crush innovation, the Sherman Act (“Act”) is an available tool to punish unlawful Internet hogging or collusion by ISPs.

The Internet is a public good.  It was created by the government.   Before, it was called ARPANET.   It was a tool of the military.    As a result, the Internet is akin to a public park.   At the same time, there are now Internet Service Providers (“ISP”) who provide Internet users with differentiated access to this public good.   Think of the ISPs as competing private tour guides in Central Park.   Some tours will be faster but more pricey than other slower tours.

The net neutrality debate wrongly omits how the Sherman Act can help police the ISP market without the need for heavy handed regulation by the FCC.   To the extent an ISP has market power and tries to keep competing companies out of the market, the essential facilities doctrine would likely apply.   To the extent that there is an oligopoly of price fixing ISPs, then there will be claims under Section 1 of the Act.   If an ISP tries to obtain too much market power through a merger, the government can oppose it.   The problem with too much regulation by the FCC is that it discourages technological innovation by ISPs who compete for customers by providing better service at a lower price.   If the FCC requires such companies to take a one size fits all approach to every customer, competitive innovation will likely suffer.  So, too, will consumers seeking faster rides through the Central Park that is the Internet.