Will discusses “certificates of necessity” (CONs) in business.
In some industries in some states new businesses must actually “prove” that there is a need for their service. Of course the market will determine this almost instantly, but as one might imagine “need” is not the real reason for such regulations.
(From The Washington Post)
Applicants must notify their prospective competitors, who can and often do file protests. This frequently requires applicants to hire lawyers for the hearings. There they bear the burden of proving current inadequacies and future necessities. And they usually lose. From 2007 to 2012, 39 Kentucky applications for CONs drew 114 protests — none from the general public, all from moving companies. Only three of the 39 persevered through the hearing gantlet; all three were denied CONs.