Trends

A SMALL STEP TOWARD TV FREEDOM

The Federal Communications Commission (FCC) attempts to justify its regulation of broadcast radio and television on the grounds that the number of available channels is so limited that government must intervene to prevent "monopolies" and ensure "fairness." Although this justification is seriously defective, it at least possesses surface plausibility; the FCC's control over cable TV, however, has never had any justification other than arbitrary government power. Cable TV does not use the airwaves at all, and provides the capability for upwards of a hundred channels; hence, it presents little likelihood of monopolistic control or of one-sided programming. Yet for more than a decade the FCC has held back the full development of cable TV, much to the delight of those with heavy investments in existing broadcast companies.

But all of that may soon change, based on a top-level government report recently released. For the past 2½ years Clay T. Whitehead and the federal Office of Telecommunications have been wrestling with the cable TV problem, in light of the strong political influence of the broadcast industry. Whitehead's report on cable TV begins by stating the obvious—that the usual justifications for FCC regulation do not apply to cable TV. It therefore recommends that cable be exempted from the "Fairness Doctrine" and the accompanying federal supervision of program content. Indeed, the report explicitly calls for application of the First Amendment's freedom of the press protection to cable TV.

This is great news, for if adopted by Congress and the FCC, this kind of hands-off policy could lead to the flowering of a new era of diverse, sophisticated programming, catering to hundreds of markets currently too small to be served by broadcasting's mass-media approach. Unfortunately, however, the Whitehead report could not leave well enough alone. Although opposing federal control of program content, it proposed a wide variety of controls on the ownership and use of cable systems:

• Cable systems would be barred from carrying sports events in competition with broadcast TV,
• Cable owners would be forbidden from controlling program content, and would be forced to sell time or lease channels to all users equally,
• Common ownership or control of complete transmission systems and program supply systems would be forbidden,
• Freedom of the press would have to give way to continued restrictions against "pornography, libel, criminal incitement, and the like."

Fortunately, these restrictions are at this point only proposals. Hopefully, Congress and the FCC will have the good sense to modify or eliminate them, while strongly embracing the jettisoning of the Fairness Doctrine. Perhaps then there will be new life in America's vast television wasteland.

SOURCE:
• "Plan for Developing Cable TV Offered," Don Irwin, LOS ANGELES TIMES, January 17, 1974.

ECONOMIC ENLIGHTENMENT

Ignorance of the findings of modern economics is not limited to the general public; it is also widespread among those making policy in our mixed economy. The nation's law schools train more policymakers than any other institution; hence, it is especially significant that a major effort to bring economic enlightenment to law schools is under way. The Summer Economics Institute for Law Professors last year completed its third annual season. Directed by Professor Henry Manne of the University of Rochester, the Institute brought together 23 law professors (out of 120 applicants) to hear UCLA economics professors Armen Alchian and Harold Demsetz lecture on, respectively, market and price theory, and the theory and structure of property rights.

Although all three Institute professors personally favor free market solutions to social problems (and all three are listed in REASON's Faculty Registry—see the January 1974 issue), the emphasis in the summer sessions is on economic theory and myth-busting. Professor Alchian notes that one of the principal aims of the course is to enable the participants to "read and understand economic literature, so they'll be able to avoid the more blatant economic errors in their teaching and perceive the simple economic flaws that appear in daily newspapers." Students are also encouraged to contrast the approach taken in Paul Samuelson's popular ECONOMICS textbook, with that of Professor Alchian's own UNIVERSITY ECONOMICS; the latter is noninterventionist, non-Keynesian, and solidly empirical, in contrast to the Samuelson book.

Among the Institute's graduates are former acting Attorney General Robert H. Bork (known for his revisionist views on antitrust policy) and Glen O. Robinson of the University of Minnesota, expected to become the next member of the Federal Communications Commission. In funding such an endeavor, the four sponsors (the Koch Foundation, the Earhart Foundation, the Veritas Fund, and General Motors) appear to have identified a key "leverage point" for righting some of the wrongs caused by decades of rampant interventionism.

SOURCE:
• "Bringing Law Profs Up to Date on Economics," Edwin McDowell, WALL STREET JOURNAL, July 23, 1973, p. 8.

SETBACK FOR ZONING

In a landmark decision, a federal district judge has overturned one of the country's most restrictive zoning laws. The case, if appealed, may well find its way to the Supreme Court, in the continuing battle between environmentalists and property owners.

The city of Petaluma, a fast-growing 31,000-person suburb of San Francisco, last year enacted a special zoning ordinance restricting the construction of new housing to 500 units per year. The ordinance was an attempt by the city government to slow down the city's rate of growth, which was rapidly changing its former semirural character. In response, the Construction Industry Association of Sonoma County and other builders' groups brought suit to have the ordinance overturned. The National Council of Home Builders contributed $25,000 for legal expenses of the suit.

In declaring the law unconstitutional, Judge Lloyd H. Burke said the U.S. Constitution does not allow a city to prohibit people moving in from elsewhere. "The issue is relatively simple," he said. "It is the use of zoning by people who live there, versus those who want to live there." Unfortunately, Judge Burke's decision did not grapple directly with the most important underlying issue—whether a city has the right to prohibit property owners from utilizing their property. To have addressed that issue would have (properly) thrown into question the validity of all zoning laws.

SOURCES:
• "Petaluma's Growth Rate Law Unconstitutional, Judge Rules," Daryl Lembke, LOS ANGELES TIMES, January 18, 1974.
• An Antigrowth Law Runs Into Trouble," BUSINESS WEEK, January 26, 1974.

GETTING GOVERNMENT OUT OF THE BEDROOM

In much of the world, government has taken upon itself the job of policing people's private sexual conduct, enforcing a puritanical set of rules on everyone. Although the situation is slowly improving in the United States, recent developments in three other countries make American progress look meager.

In Toronto, despite an official ban on televised "obscenity," UHF Channel 79 leads the Friday night ratings with its "Baby-Blue Movie." Such films as I Am Curious (Yellow), and The Conjugal Bed constitute the program's regular, highly popular fare. Canadian law does not define "obscenity" and Canadian broadcasting regulators are apparently not as uptight about sex as the American FCC. Most of the complaints about the weekly show have come from the U.S. side of the border.

In Italy, despite a centuries-old church-state alliance, prostitution is both legal and booming. Ironically, the current expansion of prostitution owes its origins to a 1958 law aimed at wiping it out. The "reform" law closed down all 717 of Italy's state-controlled brothels, thereby driving prostitutes into the streets. Their number has more than quadrupled in the 15 years since the law's passage. Today there is even a prostitutes' union—the Italian League for the Defense of Prostitution—started by a female postal worker. Miss Titti Sciascia founded the League after losing her job for proposing the legalization of brothels, along the lines of the "eros centers" in West Germany.

It is West Germany where the trend toward getting the state out of the bedroom has recently been most apparent. Last November Parliament passed historic legislation reducing the role of the state as follows:

• Sale of "pornography" to adults (over 18) is no longer forbidden,
• Homosexual acts among adults are no longer forbidden,
• Extramarital sexual relations are no longer forbidden,
• The age of sexual responsibility is reduced from 21 to 18 (and in certain cases to 16 and 14).

The new legislation is the first major change in German sex laws since the 19th century, and makes West Germany among the least restrictive countries in the world with regard to government interference with sex.

SOURCES:
• "The Blue Tube," TIME, April 9, 1973.
• "Prostitution Booming in Italy as Law Shutting Brothels Backfires," Reuters (Rome), November 23, 1973.
• "Bonn Sex Law Reform: Anything Goes—Almost," LOS ANGELES TIMES, November 10, 1973.

ENERGY CRISIS RESPONSES

Amidst the plethora of new controls and regulations arising out of the energy crisis, two moderately encouraging developments have occurred in Southern California. First, IRS investigators reported in January that more than half of all gas stations in the region were ignoring the government-imposed price freeze. Most of them were getting away with it, since IRS staff limitations permitted only spot checks. The Southern California violation rate was reportedly twice the national average.

The other development, of more lasting significance, occurred in Los Angeles. After months of procrastination, the City government has finally yielded to common sense and removed its prohibition on jitney service in the city. Owner-drivers of passenger cars and small vans will now be allowed to provide low-cost transportation that combines much of the comfort and convenience of taxicabs with economy approaching that of buses. With the new availability of jitney service, many more people will be able to get around Los Angeles without having to use their own car, thereby helping reduce congestion, smog, and overall fuel consumption. The same idea could be applied in every city, if ordinances prohibiting jitneys were repealed (see "Taxis and Jitneys: The Case for Deregulation," REASON, February 1972).

In addition to permitting jitney service, Los Angeles officials have recently decided to allow taxicab competition throughout the city, thereby ending the 40-year monopoly granted to the Yellow Cab Company. The combination of competing cab companies and unrestricted jitney service could make a sign significant difference in Los Angeles' auto-dependent transportation system, especially in light of the current fuel shortage.

SOURCES:
• "Over Half of Gas Stations Violate Price Freeze, IRS Says," Mike Goodman, LOS ANGELES TIMES, January 20, 1974.
• "Private Jitneys in L.A. Win Board O.K.," LOS ANGELES TIMES, January 18, 1974.
• "Transportation Unit OKs Citywide Taxi Competition Plan," Doug Shuit, LOS ANGELES TIMES, February 8, 1974.

REDEFINING THE PUBLIC INTEREST

Traditionally, one of the greatest blank checks that could be handed to an agency of government has been legislation enabling it to act on behalf of the "public interest," or "public convenience and necessity," or "public safety, health, morals, or general welfare." Since nobody can agree on what is meant by these terms, they permit the agency to decide cases arbitrarily—or rather, whichever way is most conducive to the most influential special interest. Two little-noticed 1973 court decisions made small dents in this bureaucratic license, however.

Both cases concerned the use of state regulation by professional groups to further their own economic interests, under the guise of protecting the public welfare from "less qualified" practitioners. In the first instance, real estate interests in Florida had persuaded the Florida Real Estate Commission to prohibit the licensing of applicants who had studied real estate via out-of-state courses. Upon challenge, the State Court of Appeals ruled that the law was a clear-cut case of using the state to restrict competition, to the detriment of consumers, and found the law unconstitutional.

The second case concerns pharmacists. In Maryland, as in most states, the State Board of Pharmacy prohibited all advertising of prescription drugs as "unprofessional." In court, the pharmacy interests raised every possible defense of their anticompetitive rule: that it reduced drug abuse (by reducing demand for drugs), that it enabled pharmacists to monitor a customer's prescriptions, and that it prevented "demeaning rivalry" among pharmacists. But the Court of Appeals saw through this special pleading and found the law unconstitutionally anticompetitive.

These two cases may set valuable precedents for ending the state-guaranteed monopoly status enjoyed by many professions.

SOURCES:
• "Public Interest Regulations," BUSINESS WEEK, November 17, 1973.
• Florida Real Estate Commission v. Windsor, Ct. App., 3rd Dist., Fla. (1973).
• Maryland Board of Pharmacy v. Sav-a-Lot, Inc., Ct. App., Md. (1973).

THE NEW VIGILANTES

Though it may be hard for life-long urbanites to comprehend, many people in America's rural West have a strong, basic attachment to private property rights. In recent years Western landowners have become increasingly frustrated as bureaucratic land use plans, environmental legislation, recreational vehicle owners, and hunters have shown increasing disregard for their property rights. Even law enforcement agencies are often perceived to be spending "too much time chasing illegal Mexican laborers" to be effective in warding off intruders.

As a result of these concerns, farm and ranch owners in Idaho, Utah, northern Nevada, and Wyoming have formed the Vigilante Committee of 10,000, pledged to keep environmentalists, bureaucrats, and hunters off their lands. So far, according to a representative, the group has 3500 members (including several state legislators), each of whom pays $50 per year and posts signs warning trespassers. Group members do not plan to shoot trespassers, but apparently have no qualms about shooting up their vehicles. Member Del Ray Holm lists the group's enemies as "environmentalists, state fish and game personnel, hunters, rustlers, vandals, and state officials who forget who owns private land." Apparently the spirit of the Old West lives on.

SOURCE:
• "Legislators Reported to be Vigilantes," UPI (Roberts, ID), November 4, 1973.