Recently, the Philly papers reported that “Comcast’s lobbying budget soars.”
I’m not sure how to interpret this. I’d like to think that our victory in the network neutrality case convinced Comcast execs they needed to make even bigger investments in influencing government, that taking on a few folks at public interest organizations the American public takes real dollars.
But it’s more likely that standard “public choice theory” is at play.
Public choice theory predicts that big companies have more incentive than the broad public to lobby and influence government. The big companies get huge benefits from government lobbying, while the costs to society are spread out among millions, each with a small stake. So Comcast makes 1 million; 1 million people lose a dollar. Comcast has the incentive to lobby. Each person will just forget the dollar, or complain, but isn’t going to hire a lobbyist.
But why is Comcast spending more now? Probably not our net neutrality victory. Maybe because Comcast fear more policy losses. The Obama tech agenda is not friendly to Comcast–it’s friendly to the public.
But here’s another idea, suggested by the article itself. When smaller companies merge into bigger companies, the bigger companies have more incentive to lobby. Let’s leave aside that more laws potentially affect bigger companies (like antitrust limits), which would itself prompt more lobbying on more issues. Bigger companies simply get a larger share of the benefits accruing to their entire industry from lobbying. When Congress changes a cable law, each cable company gets a benefit. After mergers, Comcast gets a bigger and bigger share of the benefit, so it has more incentive to lobby for the benefit. Each member of the public still gets the same small cost, so the public becomes even more outgunned. As a result, as an industry gets more concentrated–like when the FCC rubber stamps merger after merger for a decade–the remaining dominant players have even more incentive to invest in lobbying, getting a larger and larger share of the lobbying goodies going to the industry. A friend of mine wrote an interesting article on this point, though he was arguing for privatization of government monopolies, rather than opposing private concentration.
The upshot is: we’ve already known concentrated industries are bad economics, that they can reduce competition, raise consumer prices, decrease supply and variety, and inhibit innovation. But we shouldn’t overlook how concentration may affect political power, undermining the representativeness of our democracy, concentrating not just economic power but political power in the hands of a few. That is, economic concentration may lead to industries investing more and more in lobbying, further skewing the balance between special interests and the general public interest.
The solution to this is bringing sexy antitrust back. It’s enforcing the FCC’s public interest standard.
And, it’s working to organize with the public, in effect organizing and metaphysically merging their interests. The only way to win in Washington, as industries invest more in influence-peddling, is to have more of the public even more committed to solving the problems that face us, from national security to network neutrality.