Free Market Comes Full Circle

May 1995

Free Market Comes Full Circle

By Chip Mellor,
President & General Counsel

"This is the happiest day of my life!"

Ani Ebong's ebullient, Nigerian-accented voice resonated from the speaker phone. Freedom Cabs had just cleared its final legal hurdle and the streets of Denver beckoned. Together with Ani and his heroic colleagues, the Institute for Justice had broken a corrupt, government-imposed taxicab monopoly. Contained in that moment's joyous emotion was all of the human drama, exhilarating thrill, and professional satisfaction that makes being a libertarian public interest lawyer so greatly satisfying. Savoring the moment, I reflected back with a certain irony on lessons that had brought us this far.

Eleven years earlier I had tried to break another government-created monopoly in Denver. The result was not so happy for the entrepreneurs being shut out of the market, for Denver residents, or for yours truly. The monopoly took the form of an exclusive cable television franchise at a time when cable was touted as the ultimate in home communications technology.

Denver was, and in many respects remains, the cable capital of the world due to the presence of several of the industries' largest companies and financiers. With great fanfare, the city announced that it planned to have a state-of-the-art, world-class showcase for cable technology, containing interactive programs, subsidized community access, business and education networks, and an emergency broadcast system that enabled the public safety director to turn on every TV set, adjust the volume, and make announcements. To obtain this gold plated system, the city announced that it would award one cable company an exclusive, heavily subsidized permit.

Every influential person in Denver seemed to be wildly enthusiastic about this cable extravaganza. Prominent community activists and celebrities proclaimed stalwart support after receiving preferential stock options worth thousands of dollars. Educators relished the special network that would hook up the public schools and libraries. Republicans and Democrats, fueled with generous campaign contributions, outdid one another to see who could pledge the loudest allegiance to the nation's most ambitious, high tech, public works project. Meanwhile, the business community, in a display of boosterism exceeded only by its subsequent support of the Denver International Airport, swore that the future well-being and economic prosperity of Denver depended on this monopoly.

There was just one problem. By allowing only one cable company to serve Denver residents and by controlling the programming, the city trampled market forces and ran roughshod over the First Amendment.

I was working for a conservative, public interest legal foundation in Denver at the time. It seemed to me that this cable monopoly offered a perfect opportunity to establish First Amendment principles for new information technologies and to thwart the ability of cities to create monopolies. The foundation's board of directors agreed enthusiastically that there were important principles worth fighting for and urged us forward. Without delay, we assembled our litigation team which included two staff attorneys at the foundation and the chairman of the board of litigation. One of the staff attorneys was Alison Ling, who later became my wife. The other was a young man named Clint Bolick, now my partner at the Institute for Justice. Providing sage counsel as litigation board chairman was the former Wyoming attorney general, David Kennedy, now chairman of the board of directors at the Institute for Justice.

Careful planning preceded the filing of our lawsuit. Yet nothing prepared us for the intense national attention we received or for the vitriolic opposition to the lawsuit from the business community and its Republican allies in Colorado. Charges were made that the lawsuit was anti-business and bad for Colorado. As the controversy and media coverage increased, contributions to the legal foundation dropped, especially from corporations. We persevered in court, but we were increasingly constrained by the foundation from making our case aggressively in the media. Meanwhile, the screws continued to tighten on the funding front. In the face of this, the foundation decided to abandon the fight.

I was summarily fired (two weeks before our wedding.) Alison and I moved to Washington to join the Reagan Administration. Clint soon followed. David Kennedy left to become president of the prestigious Earhart Foundation in Michigan. We were all deeply disappointed, but unanimous in our belief that public interest law offered uniquely powerful tools to protect the principles of liberty. Without knowing just when or how we would be able to do it, we resolved that one day we would practice public interest law the right way, applying the lessons learned in Denver. We never lost sight of that dream.

Eight years later, Alison enthusiastically supported our cross-country move from San Francisco to Washington, D.C. so Clint and I could launch the Institute with David Kennedy as chairman of the board.

So you see, breaking the taxicab monopoly in Denver brought us full circle. Whenever you see us in court, you will know that we are guided by these experiences and the lessons learned. Of course, we won't stop there. Our experience will continue to provide lessons. And by learning from those lessons, our advocacy for liberty will continually improve.


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