19.2.04

REGULATION IN THE PUBLIC INTEREST. Today's teachable moment in the regulated industries class comes when a student asks about the possibility of entry into a regulated industry, as a way of getting lower prices for the consumers and improving the chances of discovering the minimal cost frontier. There is this term of art called "certificate of public convenience and necessity" that everyone has to learn about. In order for an applicant to secure such a certificate, said applicant must convince the commission that the existing service is inadequate, which gives the existing providers every reason to argue that the existing service is adequate, that the existing providers would be capable of providing the additional service if it were required, and that the applicant is incapable of providing the additional service. Something along those lines is happening in DeKalb. The Northern Star turned up two cases today. In one, the city council is considering creating some new liquor licenses, to be used by retail stores only. (There are currently sixteen Class A liquor licenses that are for either retail stores or taverns.) Not surprisingly, the existing license holders are not happy about the creation of additional licenses. " Louis Schoenburg, owner of American Liquors, said he was against any more additions concerning liquor licenses. He said his establishment is already dealing with a loss in sales." Put another way, the existing service is adequate. Confounding the issue, some of the existing license holders continue to have trouble with underage drinking at their taverns. No doubt some intervenor will argue that the existing allocation of licenses is what is at fault, not the number of licenses.

There is also an independent regulatory commission governing fraternities and sororities. This commission is dealing with an unauthorized sorority house. Chris Juhl, the activities adviser for Greek affairs (no, there are no shipping tycoons here, go away) sounds exactly like any chairman of any Interstate Commerce Commission any time before 1980: "It hurts our own membership. It isn?t fair to groups that are here looking to increase their membership." Translation: the existing service is adequate, and the existing providers are capable of providing any additional service required. "Alpha Sigma Omega applied to become a recognized group at NIU but was denied. ASO?s history and what it planned to offer didn?t meet standards the board required." Translation: the applicant is not competent to provide the service.

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