President Barack Obama has made headlines by announcing that he favors net neutrality -- and in particular that he wants the Federal Communications Commission to designate Internet service providers as common carriers that would be regulated like utilities. What's weird about the president's announcement is not the policy perspective, about which reasonable people can differ. What's weird is that the president’s statement has no legal effect. He appointed a majority of the FCC’s commissioners -- but he can't fire them short of malfeasance, and they won't ever run for election. What kind of democracy is this?
A brilliant lawyer I know, who's now a partner at a major firm and clerked at the U.S. Supreme Court when I did, put it this way in an e-mail to me:
There’s a big question that our nation needs to answer that will have broad implications for the development of the Internet as a content delivery system. Big policy questions are for Congress, right? Nope, Congress is going to have nothing to do with it. Oh, that’s why the president made such a big deal of announcing his position. Because this is going to be one of those unilateral executive orders that the Republicans hate so much (now that a Democrat is president)? Nope, the president will play no role in the decision. Oh, so someone has sued and the Supreme Court is about to tell us how to run the Internet? Nope, there’s no case pending.
So-called independent agencies such as the FCC are a constitutional anomaly. Formally speaking, they satisfy the Supreme Court's interpretation of constitutional legitimacy because their members are appointed by the president and therefore the agencies technically fall within the executive branch.
But Congress has set them up as seriously odd ducks. Take the FCC. Its membership must be bipartisan, and neither party can have more than three of its five members. The president gets to designate one of the members as chairman. Terms are for five years, and it's understood that through staggered appointments the president’s party will generally control the body. Nevertheless, the president cannot give orders to the members. In principle, Obama's declaration that he favors FCC regulation of the Internet to achieve net neutrality should carry no more weight than that of any other citizen.
What theory of government, if any, justifies this arrangement? The original justification lay in a belief that certain areas of policy needed to be put outside the distorting realm of ordinary politics. Created by Congress, and given the authority to issue regulations with the force of law, the agencies were supposed to make crucial decisions under conditions of insulation from the very political body that had created them.
The Founding Fathers wouldn't have recognized this notion of nonpolitical governance, which didn't begin to be imagined until the later part of the 19th century. The first independent agency, the Interstate Commerce Commission, was created in 1887 to regulate railroads. It was modeled in part on a Massachusetts Railroad Commission that was the brainchild of Charles Francis Adams Jr., grandson and great-grandson of the two Adams presidents.
Adams was an important innovator in the history of regulation. His muckraking essays on how the railroad barons had come to dominate both courts and legislatures, published (and still readable) in book form under the title "Chapters of Erie," helped provide the rationale for political insulation. In essence, Adams was worried that corporate money concentrated in the hands of a few oligarchs was subverting the very notion of republican self-government. Capital had gotten so powerful that it stood to defeat the people. Independent agencies were therefore conceived as a mechanism for protecting the people's will from the self-dealing of big business.
Adams's concerns seem fresh today -- but a problem remains that Adams didn't solve: an insulated agency isn't responsive to the people at all, because its members aren’t elected. The president is elected, but he loses genuine control over the commission the moment he nominates its members. Insulation may protect the money, but it does so at the expense of the democracy that Adams sought to preserve.
Beginning in the 1930s and continuing into the 1950s, a new justification emerged to explain insulation. Agencies such as the FCC came to be imagined as bastions of objective, technocratic expertise. Experts were supposed to be outside politics -- so that they could provide right answers to hard problems.
The trouble with the theory of insulated expertise is that no one today really believes that policy questions such as net neutrality can be solved without recourse to political values. Even if one solution is more efficient than another, efficiency says nothing about the distribution of goodies between different interest groups. Objective expertise can be useful to provide information -- but when it comes to determining policy that will create winners and losers, there's no such thing as an objective right answer.
That leaves us with today's strange situation, in which independent agencies are relics of prior theories we no longer fully accept. There's nothing inherently wrong with old institutions whose justifications have faded. Edmund Burke didn’t say, “If it ain't broke, don't fix it” -- but Burkean conservatism does capture the idea that institutions shouldn't be radically reformed or abandoned unless their function has wholly broken down. A perfectly good reason for preserving independent agencies is that we think that, on the whole, they do a good job.
But there is a further possible answer, one that goes back to Adams’s prefiguration of the Citizens United problem of oligarchic government. In a world where money interests predominate, there may be value in having an initial cut at some important policy making be done by a body that isn’t directly elected and is to a degree insulated from corporate influence. It would be undemocratic to take government completely out of the hands of the legislature. But Congress can always overturn the agency's decision if it wants. That should satisfy the demands of democracy -- and remind us that government is still, after all, supposed to serve the people.
To contact the author on this story:
Noah Feldman
at nfeldman7@bloomberg.net
To contact the editor on this story:
Stacey Shick
at sshick@bloomberg.net
