The Long Arm of the European Community

For 25 years I managed a small electronics manufacturing firm. I had uniformly bad experiences with both U.S. regulators and, surprisingly, European regulators. Government regulators respond to political forces. Science and economics comes second and the regulators readily twist the science or economics in order to pacify political forces. Regulation of pollution responds to the scare of the day, be it asbestos, lead, radiation, DDT, dioxin, plutonium, carbon dioxide, etc. Regulators have absolutely no interest in protecting industry unless the industry has political influence. That, of course, favors big companies that can effectively lobby. Big companies often welcome complex regulation because it handicaps their smaller competitors. Big firms can more easily afford the legal and engineering costs of regulation.

An example is the Federal Communications Commission (FCC) regulation of incidental radio emissions from computing equipment. Some years ago I wrote an article detailing the stupidity of those regulations. The regulations were originally motivated by the desire to keep computers from interfering with home televisions. However, since the regulations were written, home television has been converted to digital television that is extremely resistant to interference. Additionally the vast majority of home televisions are connected to cable, also resistant to interference. The original motivation for the regulations has vanished due to technical change, but the regulations have not changed and apparently the FCC has no intention of doing anything different. The reason? A large and influential testing industry has grown up around the obsolete regulations. Big manufacturing companies could have influence, but they have no motivation to reduce the disproportionate burden on their smaller competitors. They also have internal bureaucracies whose existence depends on supporting continuing government regulation.

The electronics industry is international. My small company had 40% of its sales outside of the U.S. When the European regulators decreed, in 2001, against all common sense, that lead-based solder could no longer be used in electronic equipment, the entire industry was turned upside down. The U.S. EPA had no problem with lead-based solder that had been used without problems for 100 years. But when the European regulators outlawed lead, the entire global electronics industry had to obey because everyone sold, directly or indirectly, to Europe. You might think that the U.S. government would come to the rescue of the domestic electronics industry and exert its influence to stop the reckless European regulations. Dream on.

Most electronic equipment is manufactured by soldering components, such as integrated circuits, to printed circuit boards. The soldering is usually done by selectively applying a sticky solder paste to the boards, placing the components and the running the assembly on a conveyor belt through an oven to melt the solder paste. When lead-based solder was banned all the practical alternative solders had a higher melting point requiring the oven to be hotter. In turn this required redesigning many components to withstand the higher soldering temperature. Additionally many new problems emerged with the unfamiliar solders. For example, in some instances, metal whiskers grew and shorted out the components. The retooling cost to the industry was in the billions of dollars. Often, expensive capital equipment had to be scrapped.

The notion that lead in electronics equipment would cause poisoning was unsupported, even comical, given that tens of millions of automobile batteries, each containing over 20 pounds of lead, are disposed of, or recycled, each year. The influential automobile industry is not going to be forced to abandon lead.

Why did the European regulators ban lead? The ostensible reason is that it might create pollution is probably not the real reason. Government regulators usually have hidden agendas that are not publicly disclosed. It may be that the European electronics industry thought that they stood to gain a competitive advantage over the Japanese and Americans. It may be that the regulators were just so dumb that they didn’t realize the havoc they would cause and when it became apparent they didn’t want to admit that they had been wrong. It is a mistake to underestimate the level or ignorance and incompetence of government regulators. To be fair it is difficult, or impossible, for a team of regulators to understand the needs and problems of a complicated industry.

If you ask government regulators whey they don’t keep their regulations up to date, the answer is usually that they need more money. That is the ready answer to evade responsibility and blame someone else. Their regulations are never wrong, unnecessary or stupid. The regulations are always prudent and based on the best information. In other words, it is all about political spin.

There is little hope of challenging stupid or unnecessary regulation in the courts because the Supreme Court has decreed that deference must be paid to regulatory agencies. Even if some sort of challenge is possible the legal costs run to the millions and the lawsuits drag on for years.

I’ve only mentioned two narrow regulations, one U.S. and one European, that affected me. Yet those two narrow regulations imposed billions of dollars of unnecessary costs on the electronics industry. Currently the Code of Federal Regulations has 174,000 pages. It is not surprising that the regulatory burden on the U.S. economy has been estimated to be in excess of two trillion dollars a year. That’s $6,000 for every person in the country, or $24,000 for a family of four.

Reining in runaway regulators is an unsolved problem. The issues are often too technical for judges, much less juries, to understand. The provisions for public hearings and public comment are a farce that the agencies generally ignore. My suggestion is to have institutional B teams whose job is to operate as adversaries creating a brief against proposed or existing regulations. Obviously the B teams would have to be independent of the agencies and well enough funded to grapple with the complex issues. The existence of B teams would make the agencies fear generating stupid or unnecessary regulations.

Norman Rogers writes often about scientific and regulatory issues. He is an unpaid advisor to the Heartland Institute and a member of the board of directors of the CO2 Coalition. He is a member of the American Geophysical Union and of the American Meteorological Society. He maintains a website.

For 25 years I managed a small electronics manufacturing firm. I had uniformly bad experiences with both U.S. regulators and, surprisingly, European regulators. Government regulators respond to political forces. Science and economics comes second and the regulators readily twist the science or economics in order to pacify political forces. Regulation of pollution responds to the scare of the day, be it asbestos, lead, radiation, DDT, dioxin, plutonium, carbon dioxide, etc. Regulators have absolutely no interest in protecting industry unless the industry has political influence. That, of course, favors big companies that can effectively lobby. Big companies often welcome complex regulation because it handicaps their smaller competitors. Big firms can more easily afford the legal and engineering costs of regulation.

An example is the Federal Communications Commission (FCC) regulation of incidental radio emissions from computing equipment. Some years ago I wrote an article detailing the stupidity of those regulations. The regulations were originally motivated by the desire to keep computers from interfering with home televisions. However, since the regulations were written, home television has been converted to digital television that is extremely resistant to interference. Additionally the vast majority of home televisions are connected to cable, also resistant to interference. The original motivation for the regulations has vanished due to technical change, but the regulations have not changed and apparently the FCC has no intention of doing anything different. The reason? A large and influential testing industry has grown up around the obsolete regulations. Big manufacturing companies could have influence, but they have no motivation to reduce the disproportionate burden on their smaller competitors. They also have internal bureaucracies whose existence depends on supporting continuing government regulation.

The electronics industry is international. My small company had 40% of its sales outside of the U.S. When the European regulators decreed, in 2001, against all common sense, that lead-based solder could no longer be used in electronic equipment, the entire industry was turned upside down. The U.S. EPA had no problem with lead-based solder that had been used without problems for 100 years. But when the European regulators outlawed lead, the entire global electronics industry had to obey because everyone sold, directly or indirectly, to Europe. You might think that the U.S. government would come to the rescue of the domestic electronics industry and exert its influence to stop the reckless European regulations. Dream on.

Most electronic equipment is manufactured by soldering components, such as integrated circuits, to printed circuit boards. The soldering is usually done by selectively applying a sticky solder paste to the boards, placing the components and the running the assembly on a conveyor belt through an oven to melt the solder paste. When lead-based solder was banned all the practical alternative solders had a higher melting point requiring the oven to be hotter. In turn this required redesigning many components to withstand the higher soldering temperature. Additionally many new problems emerged with the unfamiliar solders. For example, in some instances, metal whiskers grew and shorted out the components. The retooling cost to the industry was in the billions of dollars. Often, expensive capital equipment had to be scrapped.

The notion that lead in electronics equipment would cause poisoning was unsupported, even comical, given that tens of millions of automobile batteries, each containing over 20 pounds of lead, are disposed of, or recycled, each year. The influential automobile industry is not going to be forced to abandon lead.

Why did the European regulators ban lead? The ostensible reason is that it might create pollution is probably not the real reason. Government regulators usually have hidden agendas that are not publicly disclosed. It may be that the European electronics industry thought that they stood to gain a competitive advantage over the Japanese and Americans. It may be that the regulators were just so dumb that they didn’t realize the havoc they would cause and when it became apparent they didn’t want to admit that they had been wrong. It is a mistake to underestimate the level or ignorance and incompetence of government regulators. To be fair it is difficult, or impossible, for a team of regulators to understand the needs and problems of a complicated industry.

If you ask government regulators whey they don’t keep their regulations up to date, the answer is usually that they need more money. That is the ready answer to evade responsibility and blame someone else. Their regulations are never wrong, unnecessary or stupid. The regulations are always prudent and based on the best information. In other words, it is all about political spin.

There is little hope of challenging stupid or unnecessary regulation in the courts because the Supreme Court has decreed that deference must be paid to regulatory agencies. Even if some sort of challenge is possible the legal costs run to the millions and the lawsuits drag on for years.

I’ve only mentioned two narrow regulations, one U.S. and one European, that affected me. Yet those two narrow regulations imposed billions of dollars of unnecessary costs on the electronics industry. Currently the Code of Federal Regulations has 174,000 pages. It is not surprising that the regulatory burden on the U.S. economy has been estimated to be in excess of two trillion dollars a year. That’s $6,000 for every person in the country, or $24,000 for a family of four.

Reining in runaway regulators is an unsolved problem. The issues are often too technical for judges, much less juries, to understand. The provisions for public hearings and public comment are a farce that the agencies generally ignore. My suggestion is to have institutional B teams whose job is to operate as adversaries creating a brief against proposed or existing regulations. Obviously the B teams would have to be independent of the agencies and well enough funded to grapple with the complex issues. The existence of B teams would make the agencies fear generating stupid or unnecessary regulations.

Norman Rogers writes often about scientific and regulatory issues. He is an unpaid advisor to the Heartland Institute and a member of the board of directors of the CO2 Coalition. He is a member of the American Geophysical Union and of the American Meteorological Society. He maintains a website.