From the NYT: Telecom Investor Named to Be F.C.C. Chairman

A recurrent theme in this class is elite control of governing institutions. We are said to be a democracy and that rule rests with the people, but we are in fact a democratic republic. This means that the preferences of the population are filtered through a variety of institutions - legislative, executive and judicial - established in the Constitution.

What really matters is who controls those institutions.

Quite often these people are those who have the wealth and organizational ability to help supporters get elected to office, and then have the ability to control the institutions that set the rules that govern what they do. We use a variety of terms to refer to this: agency capture, the revolving door and the iron triangle among them. All refer to the relationships that begin to develop around the different institutions, organizations and people who have an interest in and influence over, some matter of public policy.

The concern is that these relationships - and the fact that private interests are part of these networks - makes it likely that private interests will win out over public interests in how these policies are set and implemented. On the other hand, these relationships ensure that participants in the public policy process have expertise in that field. The trick is balancing these two.

Here's a recent story from the New York Times that highlights this tendency in the communications industry. A well connected telecommunications investor and lobbyist - Tom Wheeler - has been named the head of the FCC - the regulatory agency that sets rules for the industry:

Mr. Wheeler served from 1992 to 2004 as the chief executive of the Cellular Telecommunications and Internet Association, the cellphone industry trade group, and from 1979 to 1984 was chief executive of the National Cable Television Association. That has led some telecommunications watchdog groups to worry that he might favor those businesses over consumers.

And:

Once he takes office, Mr. Wheeler, 67, will be under pressure not only to demonstrate that he understands rapidly changing technologies, but also to make clear that his previous work as a top lobbyist for the cellphone and cable television industries will not prejudice his F.C.C. decision-making.

Mr. Wheeler will have to confront several issues almost immediately upon Senate confirmation and being sworn in. The commission is preparing for a complicated auction next year of bands of spectrum — the electromagnetic airwaves over which television, radio and cellphone signals travel.

. . . Mr. Wheeler and the commission will also have to decide the extent to which various companies will be eligible to bid for the bands of spectrum. Some consumer advocates say they believe that AT&T and Verizon already control too much of the wireless phone market — roughly 70 percent — and should not be allowed to lock up more spectrum.

The companies, some members of Congress and others, however, want the F.C.C. to maximize revenue from the spectrum auction — which would mean allowing AT&T and Verizon to buy as much as they want. 

Since this is topical - we might want to try to unpack the relationships that exist in the telecommunications sectors and the Federal Communications Commission. It'll give us an idea about how political influence really flows on the national level.