Publius Squared: The Regulatory State, Congress, and Democracy

As many people should know, Obsidian Wings is often a bastion of worthwhile discussion and debate combined with unapologetic opinion in the sea of hackery and straw men that is the political blogosphere.  Over the last several days, the site’s most prolific blogger, as well as an expert on communications law and a passionate advocate of net neutrality, Publius (known in real-life as law professor John Blevins) was kind enough to indulge me (who once likewise blogged using a derivation of Publius as a pseudonym) in an exchange of e-mails on the interplay between regulation, legislation, and democratic accountability, and what the FCC’s recent actions on net neutrality say about it.  For the sake of the readers’ sanity, I should note upfront that the questions get significantly shorter and more focused as the interview wears on, and Publius may deserve sainthood for his ability to respond to the first question at all.

Mark: One aspect of American policy that tends to get little attention in our public discourse is that of administrative law, rulemaking, and adjudication, not to mention even more discretionary issues such as enforcement priorities.  Yet, at least on the federal level, this is quite often where the real “action” is.  With some notable exceptions, it seems (to me, at least) that it is physically impossible for government agencies to uniformly enforce all of the laws and regulations on the books, almost no matter how many resources we give to those agencies. Meanwhile, rulemaking procedures are often immune from the kind of democratic accountability that theoretically exists in the legislative branches – they are uniquely low-visibility, often – though certainly not always – attracting the input only of the most interested players with the biggest budgets.  Even where rulemaking succeeds in overcoming these more basic regulatory capture concerns, the resulting regulations are still inevitably of the one-size-fits-all variety, such that the largest players often wind up increasing their comparative advantage over small players, even where it was the malfeasance of the large players that created the impetus for the rule in the first place.  Additionally, the wide grant of quasi-legislative powers and enforcement discretion to administrative authorities has seemingly given Congress the ability to duck responsibility for its own action or inaction by allowing it to blame agency bureaucrats and appointees for various problems.  For example, we often hear GOP politicians argue quite plausibly against gun control legislation on the grounds that it is only necessary to enforce existing gun laws; meanwhile, to take another issue near and dear to my heart, Democratic politicians avoid responsibility for the nasty effects of the Consumer Product Safety Improvement Act by claiming that those effects are the result of an improper interpretation by the CPSC.

First, I do think the benefits of a strong administrative state outweigh the harms.  My vision of the administrative state isn’t quite as bleak as what you described, though I certainly share some of your frustrations and skepticism.

In general, I think problems with the regulatory state often reflect external problems.  For instance, if wealth and power are concentrated, then those disparities in political power will be reflected in rulemakings.  If, by contrast, there is less concentration, then rulemaking will benefit from more adverse, competing “vectors.”

Similarly, if one of our political parties views regulatory action essentially as a means to enrich industry, then that too will be reflected in the ultimate rulemaking and adjudications.  But that’s a problem with the intellectual state of the political party more than with the administrative state.

Finally, if the broad public isn’t organized and engaged (particularly at an institutional level), that too will be reflected.

But it doesn’t have to be that way.  Indeed, I think the FCC’s recent actions on open networks and net neutrality show the promise of administrative action, and undermines public choice skepticism (a topic we’ve discussed before).

First, the proposals show that you don’t necessarily need powerful rich industry groups to make change happen.  Open networks are the result of lobbying by underfunded, idealistic public interest organizations like Free Press.  The bigger content companies like Google aren’t doing much heavy lifting.  And I think, frankly, that Democratic policymakers are more attentive to policy at this point in history.

Second, the FCC’s actions show the importance of political mobilization and organization-creation.  In many instances, rich industry groups get their way simply because they’re the only people in the room providing information to policymakers.  In a sense, policymakers often read the brief from only one party.

With the rise of public interest and watchdog organizations, policymakers have more sources of information.  The process, therefore, isn’t hopelessly corrupt — it’s just that a lack of organization is depriving policymakers from hearing other voices.  Legislative and regulatory staffers are busy, and it’s an enormous benefit to receive useful information wherever they can get it.

First, I’m not sure it’s possible to say — ex ante — that we should always favor one form of regulatory action over the other.  Each has its own strengths and weaknesses, and so it really depends on the context.  Adjudication has the benefit of flexibility (as you note), but it also provides less clarity for industry.

In the Comcast/open networks proceeding, I’m happy for any FCC action.  But if I had to choose between the two, I’d prefer rulemaking for several reasons.  First, rulemaking offers a stronger and clearer message.  Second, rulemaking will be harder for a future Republican administration to reverse.  Third, the ongoing threat of adjudication assumes we can detect misbehavior as it arises.  I’m not sure that’s a safe assumption.  Comcast, after all, only got caught because they happened to block the uploads of an extremely sophisticated network engineer who happened to home suffering from an illness, as I recall.

In addition, the risks of rulemaking are less of a concern here.  Remember that this isn’t some newfangled untested regulation.  Openness and neutrality have been the historical norms — and they’ve been an enormous economic and social success.

Accordingly, there’s much less risk that the FCC’s actions will thwart business in unforeseen ways.  The bigger risk is that granting network providers impunity to block would thwart the Internet in unforeseen ways.

To start, though, I think presidential support is important.  One good thing about a national executive is that it’s less susceptible to capture by any one interest group.  For this reason, getting commitments from presidential candidates early in the campaign process is huge.  Without the Obama administration’s strong support, this never would have happened.

Second, political activism and engagement matters.  David Simon is one of my favorite people, but the open networks debate has proven him wrong — politics can bring about meaningful change.  It’s hard work, but new organization building and activism can create good results.

Third, Congress can also limit capture by writing better legislation (at least to the extent you think Congress is less susceptible to capture than agencies).  One problem with the 1996 Telecom Act, for instance, was that Congress left too many decisions in the hands of the agency.  I’d prefer to see Congress provide more detail in many areas to prevent lobbyists from filling in the gaps — that’s why I’m ok with a 1,000 page health care bill.

I actually would prefer to see more oversight of the administrative state by the public.  I wish people (including me) were more informed about administrative actions, and their impact.  Congress certainly has an important role to play – I don’t mean to diminish its responsibilities.  But “Congressional oversight” often consists of getting a Senator to sign his or her name to an industry-drafted letter complaining about something.  And Congressional oversight will always vary depending on what party is in charge.

Public interest groups and grassroots activism, by contrast, don’t change after the election.  People can do more good than you might think simply by drawing public and media attention to a given decision.  Administrative officials are fairly risk-averse, and public criticism really can influence their decisions.

For instance, it’s been public pressure and private litigation that has forced changes in our detention policy.  Congress has been (and remains) horrible on the issue.

Another problem is simply that the public doesn’t know much about the administrative state.  Much of it is complex and nontransparent, even to lawyers.  Indeed, today’s law schools are part of the problem.  The first-year curriculum doesn’t teach you anything about the administrative state, and students aren’t generally required to take “admin law” for either the law school or the bar.  Personally, I think admin law should be a required first-year class (or at least required before you graduate).

But thanks so much for the interview — I’ve enjoyed it, and I very much enjoy reading the blog.  Gotta get rid of that pesky libertarianism, but we’ll work on that.  🙂