Freedom Line Blog

The nine most terrifying words in the English language are: I’m from the Government, and I’m here to help.

There’s a good reason why one of Ronald Reagan’s most memorable adages remains so poignant today.

Namely, government officials’ ability to harm people whom their well-intentioned laws are meant to benefit remains a tragic and all-too-common pitfall of government activity.

A recent illustration of that tragic paradox exists in a California proposal known as AB 1414, which if enacted would prohibit landlords from making internet service subscriptions with specific service providers part of their rental packages.

Although any proposal that purports to increase tenant choice seems superficially positive in the abstract, the problem with AB 1414 is that it would only undermine a critical tool that makes broadband access more affordable for lower-income tenants throughout the state.

Here’s why.

Landlords serving lower-income tenants often reach agreement with internet service providers to offer group discounted rates to their tenants.  Accordingly, those lower-income tenants become able to access high-speed broadband at much lower rates and without such additional costs as deposits, installation fees and even credit history investigations.  It’s a big win for lower-income tenants.

However well-intentioned, AB 1414 would undermine those beneficial accommodations.  As a result, lower-income tenants would only suffer reduced access to high-speed internet, pay more for the service, reduce incentives for internet service providers to offer service to those customers and only widen the nation’s “digital divide” between upper-income and lower-income Americans.

What’s more, existing federal laws already protect tenants by banning service providers from imposing contractual provisions granting them exclusive rights to provide video services to apartment complexes.

Accordingly, while it’s in everyone’s interest to close the digital divide and increase internet access for lower-income consumers, AB 1414 will only have the opposite effect.  Hopefully California lawmakers perceive that reality in time.

In today’s hyper-competitive and ever-changing telecommunications sector, private enterprises must remain empowered to fluidly navigate and combine for greater market scale without gratuitous government regulatory interference.  How private companies choose to navigate today’s competitive environment isn’t particularly any of our business or concern, but the recent merger proposal between Charter Communications and Cox Communications does merit attention as it relates to something that the federal bureaucrats should not do:  intrusively overregulate.

It bears emphasis because for four years we at CFIF highlighted the egregious excess of the Biden Administration when it came to needlessly micromanaging private companies’ decisions on such matters.  The new Trump Administration has returned a more market-based economic approach that emphasizes lower taxes and less regulation, and the payoffs have already been obvious.

Let’s hope that current regulators – whether at the Federal Trade Commission (FTC), Department of Justice (DOJ) or Federal Communications Commission (FCC) – recognize the peril of the last administration’s discredited hyper-regulatory opposition to mergers of all sorts, and that they instead let the free market work itself out without needless bureaucratic interference.  As was the case in the first Trump Administration, the winners of that less-regulatory approach will be American consumers, our economy and private innovation.