After a year of heading in the right direction, the California Public Utilities Commission veered off course last week when Commissioner Dian Grueneich initiated a dangerous move towards old command-and-control regulation. Grueneich claimed to be staking out a middle ground in her alternate plan to Commissioner Michael Peevey’s outline for a California Telecommunications Bill of Rights.
“This decision strikes the appropriate balance between the needs of consumers and supporting a competitive marketplace,” she announced on January 25. Though everyone wants to protect consumers and ensure a vibrant marketplace, it is folly to think that a bureaucrat and her staff have the knowledge and power to magically strike the right balance.
It’s a mistake that policy makers have been making for ages and one aptly described by Friedrich Hayek as the “fatal conceit” — the notion that a few very informed people could order societal affairs in ways that would somehow yield results superior to those that spring from the spontaneous order of a free society. This can lead to all sorts of problems, and the telecommunications industry is unfortunately a poster child for the way heavy regulations backfire.
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