Adam Thierer on Regulating Media Platforms

The Mercatus Center’s Adam Thierer analyzes communications technologies and the policies influencing the development and use of them, and I’ve always found his work extremely valuable in my own thinking. Adam and Brent Skorup have a new Mercatus study on lobbying in the information technology sector, A History of Cronyism and Capture in the Information Technology Sector.

One area where Adam and I have common cause is in the interaction of regulation and technological change, and the extent to which regulation may not yield the desired outcomes when regulation dilutes incentives to innovate and stifles change, due to some static definition of “public interest” that is inconsistent with dynamism and experimentation.

I recommend this Surprisingly Free podcast, in which Adam discusses proposals to regulate Facebook and other social media platform companies as public utilities; the podcast page also has links to some of Adam’s written work. In particular, if you want to explore these ideas I suggest Adam’s Mercatus paper on the perils of classifying social media companies as public utilities, in which he argues:

Social media aren’t public utilities for two key reasons:

1. Social Media do not possess the potential to become natural monopolies. They are virtually no costs to consumers and competitors have the ability to duplicate such platforms. The hottest networks are changing every year, and there is no way for the government to determine which platform is going to become popular next.  Remember MySpace or CompuServe?
2. Social Media are not essential facilities. Those who claim that Facebook is a “social utility” or “social commons” must admit that such sites are not essential to survival, economic success, or online life. Unlike water and electricity, life can go on without social networking services.

Public utility regulation would instead stifle digital innovation and raise prices of these services for users. Not only are social media sites largely free and universally available, but they are also constantly innovating.

I am going to be digging into a new research project later this summer using some of Adam’s arguments, so I am particularly interested in your comments and thoughts.