Saturday, June 30, 2007

Internet Radio

You may have noticed last Teusday that lots of internet radio stations decided not to broadcast. This is in protest of the FCC's decision to vastly increase the royalties that internet broadcasters must pay.

I can't help but think (as I did the minute I first heard about this) that the royalty increase was done as a favor for XM and Sirius Satellite Radio, and perhaps ClearChannel and the EIB network. Wireless broadband technology is getting more sophisticated and compact all the time, so devices similar to the iPhone are going to be able to bring portable music on demand to people. At that point, demand for satellite radio will drop precipitously, particularly since most people would rather be their own program directors. Also, it would make all the webcasters available on personal-sized devices, thus putting XM and Sirius in direct competition with them. That too would be bad for satellite radio.

Given that the legislative solution that webcasters are proposing is to make their royalty rates the same as those for satellite radio, this particular notion of mine has been greatly reinforced.

This just brings to the fore one of my regular libertarian contentions: big government is the friend of big business and the enemy of small business, and regulators are typically in the pockets of big businesses, and regulations are most often designed to impede small businesses. Consumers lose out, since the government prevents them from having choices that others wanted to give them.

Basically, Big Business gives Big Money to Big Government, with the result being that the guns used to enforce these malum prohibitum regulations are pointed at their smaller, more agile competitors. The government becomes Big Business's goon, shutting down competition with violence, just like gangsters used to during Prohibition. We do so much better when the government just lets those businesses that are dealing honestly be.

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