Rent Seekers Never Sleep

Having the public be forced to buy the hardware required to access your product is a great business model. Hence, the RIAA and the music labels want Congress to mandate that mobile devices, such as cell phones, PDAs, etc., have built in FM receivers.

The only cost to the RIAA and the record labels is the price of the lobbyists. Since they presumably already have lobbyists in their employ, the cost to the RIAA and the record labels is zero. That is the cost to the proponents will be zero unless the proponents have to buy members of Congress to get the mandate passed.

The overwhelming majority of the costs will be born by the public and the manufacturers of mobile devices. The public will pay higher prices for larger and heavier devices. The mobile device manufacturers will suffer the design, and manufacture headaches of producing a more complicated device. In addition, the manufacturers will have reduced sales because their devices will be more expensive.

The proponents justify the mandate based on providing increased choice to consumers, and so the government can send messages to the public during emergencies. The proponents of the mandate have a funny notion of what constitutes providing choice to the public. Is their any evidence that the public is demanding FM capabilities in mobile devices and, for some strange reason, manufacturers are ignoring that demand?

As for the government supplying emergency messages, if most people are like me, they have plenty of stationary, portable, and car FM radios. It is hard to fathom why I would need another FM capable device in order to allow the government to tell me, “Everything is under control. Be calm, and obey orders”.

When I told my youngest son about the proposed mandate, he replied, “Nobody listens to the radio anymore”. As for myself, the only time I listen to local over the air radio is when the Internet is out. Internet radio supplies orders of magnitude more choices than is available locally even in a big market like Los Angeles.

So there you have it, private interests using the political method to extract wealth from the public.

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Posted August 18, 2010 by Brian Cantin in Uncategorized

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