Federal

Federally Sanctioned Propaganda Machine

by Gary Howard on December 11, 2008 · 1 comment

in Bailout Watch, Economy, Intellectual Property, Nanny State, Odds & Ends, Privacy, Regulation, Tech & Telecom

 

Apple's 1984 "Big Brother" commercial.

Apple's 1984 "Big Brother" ad

An article over at Ad Age brings up an angle on the whole auto industry bailout probably not considered much before.  The fact that a yet-to-be-appointed “car czar” will have control over a multibillion dollar advertising budget for the big three.  Under the guise of “oversight,” this would effectively “Create World’s Most Powerful Marketing Exec[utive].”  

The draft rescue plan for Detroit sent to the White House by Congress yesterday calls for the appointment of a “car czar” who will oversee the Big Three automakers’ expenses over $25 million — which, by extension, would include media buys. Based on Advertising Age’s estimates of spending by General Motors Corp., Chrysler and Ford Motor Co., that would give the as-yet-unnamed car czar control over some $7.3 billion in marketing spending in the U.S. alone.

The most disturbing thoughts about this (particularly to those concerned with liberty) are provoked here: 

The car czar would wield a budget more than double those of AT&T, Verizon, Unilever and Johnson & Johnson, which round out the nation’s top five marketing spenders, and give the car czar more clout with media and agencies than such famed names in marketing as Walmart Chief Marketing Officer Stephen Quinn and Anheuser-Busch VP-Marketing Dave Peacock.

…If the bailout goes through, agencies that work for the Big Three will essentially be toiling on a government account, with all the associated red tape and strictures that involves.

So there you have it.  We should all be concerned about this for many reasons.  As mentioned, the large ad budget that comes with a czar-controlled U.S. auto industry will allow a government bureaucrat to wield unbalanced and unchecked influence over not only who gets ad contracts, but what media outlets get ad money. The czar can simply refuse to give business to an advertising agency who works for a foreign competitor of the big three (or a “non-compliant” corporation), or refuse to pay money to show ads on outlets that they deem “unfriendly” to the administration or its mission.   This will be an unequivocal disaster.  We have already seen the lengths to which administrations (and pre-administrations) have gone to influence and/or silence media they do not like.  What kind of power plays do you think are possible when the administration’s appointee controls a major source of media outlets’ ad revenue? Whatever it ends up being, it won’t be pretty.

FCC Might Actually Roll Back an Outdated Regulation!

by Ryan Radia on October 15, 2008 · 1 comment

in Tech & Telecom

If you wanted to communicate over long distances in real-time 25 years ago, you had little choice but to rely on your local phone company for carriage. Email and mobile phones were still oddities, and neither SMS text messages nor tweets had even been conceived.

Federal regulators, concerned that some companies might not maintain a  high level of service, imposed reporting requirements so the FCC could monitor phone companies and ensure calls were being handled properly.

Fast forward to 2008, and the traditional phone company is but one of numerous firms providing voice and data services to consumers. From cable digital voice to cell phones to free, IP-based applications like Skype, there are a growing number of ways to talk to people in another part of the country. Yet federal regulators have continued enforcing strict reporting requirements on phone companies, forcing these firms to spend countless man-hours filling out forms that some Washington bureaucrat may one day glance over. And these FCC rules apply exclusively to phone companies, putting them at an unfair advantage simply because they happen to be older and more well-established.

As we’ve discussed many times before, the FCC’s paperwork-intensive service quality reporting rules impose millions of dollars in compliance costs on phone companies. These costs are passed on to customers, resulting in higher prices without any actual benefit.

The FCC’s service quality reporting requirements needlessly duplicate the function of a competitive marketplace. How could a phone company get away with subpar service without losing customers to superior competitors? Market discipline-not federal regulation-is ultimately what pushes telecom firms strive for high quality service.

Fortunately, in a notice published today in the Federal Register, the FCC describes its plans to provide regulatory relief to AT&T and Verizon, among others. This needed reform will help reduce unneeded regulations, possibly translating into more competitive offerings from telephone companies.

Of course, the Federal Register is loaded with myriad regulations that, collectively, cost Americans well over $1 trillion dollars per year (as CEI catalogues in its annual publication, Ten Thousand Commandments: An Annual Snapshot of the Federal Regulatory State). The FCC’s decision to relieve telcos of reporting rules is a welcome move, but we have a long way to go before the regulatory leviathan is in check.