Regulation Means Never Having to Say You're Sorry

Washington attorney Ken Robinson--a proto-blogger who has been publishing privately for 20 years, but not on the Internet--looks at the implications of Bernie Ebbers's recent fraud conviction on telecommunications policy:

Bernard Ebbers of WorldCom, Bert Roberts, Bob Allen, and then C. Michael Armstrong of AT&T were among the Federal Communications Commission's (FCC) most-favored "anchor clients" throughout the 1990s, weren't they? Remember Roy Orbison's song, "Anything You Want, You Got It!"? Virtually nothing these failed executives asked of the FCC was ever denied them. Now, however, it's beyond reasonable disputation that at least one of these fellows was a serious crook. . .

Interestingly, the current FCC members -- who seem eager to issue press statements on just about anything -- didn't have anything to say about this particular policy disaster. As Business Week and the Economist noted, it was the biggest conviction stemming from a wave of corporate crookedness during the 1990s. None of their predecessors in title apologized to the public, not to mention New York (and California, and Ohio) pensioners, incidentally.

But the FCC's "hide-out" stance is understandable. After all, the "expert regulatory agency" and its many staff were truly bewitched, bothered, and bewildered, weren't they? Talk about being asleep at the switch!

What, exactly, is the FCC supposed to be regulating? Not Global Crossing, Quest, Tyco or Worldcom, each of which was booking fantasy revenue from "capacity-swaps," forcing subsequent downward restatement of revenues. Not AT&T, where ex-CEO Michael Armstrong destroyed one of America's best (and widely held) companies, incinerating tens of billions of dollars of shareholder value. Now AT&T's about to be swallowed-up by one of its Baby Bell progeny--which didn't stop the company from giving the departing Armstrong $21 million, plus sweeteners such as free financial consulting and rides on corporate jets.

Whether the agency was a captive of the companies it supposedly regulated, or simply unable to spot and stop the scams, the FCC failed to protect the public interest. The various profit restatements and bankruptcies cost billions. Why, on top of that, fund the FCC's budget?

I can understand "double or nothing." But apparently Washington regulatory agencies embody "double for nothing."