This is a good piece that uses the BP Oil Spill and the Net Neutrality debate to illustrate what "Regulatory Capture" means. It's a term I've heard before but this served to clarify it quite a bit.
The [so-called] liberals’ fury at the President is almost as astounding as their outrage over the discovery that oil companies and their regulators might have grown too cozy. In economic literature, this behavior is known as “regulatory capture,” and the current political irony is that this is a long-time conservative critique of the regulatory state….
What the Oil Spill Really Says About Net Neutrality: Regulatory Capture v. the Nirvana Fallacy