The mechanics of how Washington works
I got tapped this morning to do Power Grid on CNBC’s Power Lunch as a follow up on my quote in the Wall St. J. and my blog post from yesterday. I think it went reasonably well, as these talking head debates go. We each made our points and followed the rules on time and avoided ad hominem attacks. Anyway, you can all judge for yourselves.
Stay tuned . . . .
Although the Department of Justice Antitrust Division (DOJ) has not confirmed it, the Wall St. Journal reported that DOJ is internally considering whether or not companies “such as AT&T and Verizon” have abused their market power. Most traditional antitrust lawyers I’ve seen quoted don’t think it likely the telcos have market power — especially given the hostility that courts have recently shown to antitrust. Indeed, in a world where even potential competition is supposed to be part of the market analysis, how can a modest 60% of the wireless market shared by the two companies, with no evidence of price fixing or coordinated behavior, support any sort of antitrust action?
Welcome to the more grown up and sophisticated view of market power in the more complex real world. After more than 25 years, U.S. antitrust authorities may be ready to reexamine the underlying limitations of antitrust in light of a new generation of economic scholarship on the subject of market power and the exercise thereof.
So are we at the dawn of a new age of antitrust, one that recognizes such modern economic phenomena as network effects, the power to constrain choice through non-disclosure agreements that create information asymetry, and the power of vertical integration to eliminate traditional geographic and product market distinctions? Will Christine Varney and John Lebowitz do to the the U of C worshipers of the gods of the marketplace as Copernicus and Galileo did to Ptolmey and his fanatics who preferred to reject the evidence of their eyes in favor of ever more complex theories of deferents and epicycles? Or will the judicial activists of the D.C. Circuit and the political might of the incumbents once again force regulatory agencies to abjure, curse and detest such heresies?
E pur si muove below . . . .
Like everyone else in the telecom world, I’m pleased and relieved the Senate finally confirmed Julius Genachowski and reconfirmed Robert McDowell. But I need to echo Commissioner Copps’ sentiments that seeing Commissioner Adelstein go makes this particular bit of good news hard to take.
Long time readers know I’ve been a huge fan of Adelstein. I should add that I have equally been a huge fan of his staff, particularly Rudy Brioche and Renee Crittendon, with whom I’ve done a lot of work over the years.
What I have always admired about Adelstein is that he has been a Populist in the best sense of the word, and in the finest tradition of rural America. i.e., someone who actually cares about people and takes the time to listen to them and fight for their issues. Over the years, Adelstein has always tried to make the time to come to events where he can hear directly from people — whether at industry trade shows or a modest gathering of community wireless activists. He has always tried to make sure that everyone has the opportunity for meaningful access to both new media and old. He has spoken passionately about the need to make sure that the benefits of broadband are accessible to everyone. He has been a friend to PEG and leased access as means for independent programmers to bring independent viewpoints to cable and because of his appreciation for the importance of local programming. Side by side with Commissioner Copps, he toured the country and rallied opposition against any relaxation of media ownership rules. He pushed harder than anyone for the Commission to take on the problem of Payolla, and repeatedly called for more ways to get independent musicians and local talent on the air.
I will miss Adelstein’s energy and friendly spirit at the Commission. On the positive side, he is certainly the right man to run the broadband program at RUS. Adelstein has always been at his most enthusiastic when looking to see how new technologies can improve people’s lives, particularly in rural America. I look forward to seeing what he can do with $2.5 Bn to revolutionize broadband access in rural communities. Hopefully, the Senate Agriculture Committee will move quickly to hold a hearing and speed him through the confirmation process.
Stay tuned . . . .
At long last, it looks like the Senate Republicans got their act together enough to settle on two FCC candidates: Current Republican FCC Commissioner Robert McDowell and former NTIA Administrator Meredith Atwell Baker. While I expect a fair number of policy fights, I also expect to see this group weighing matters fairly and searching for common ground.
I’m hopeful this can clear the Senate before July 4 recess. The FCC has a pretty big agenda, starting with the National Broadband Plan (yes, February 2009 may seem far away, but not for this), continuing through finishing up on white spaces and wireless microphones, FCC Reform, ownership, network neutrality, etc., etc. Be nice if the Senate also confirmed Larry Strickling for NTIA. Finally, if we really want to get things moving, the Senate Agriculture Committee should schedule a hearing for Adelstein’s appointment to head up the Rural Utility Service now (they don’t have to wait for him to be off the FCC to have a hearing on his nomination to RUS) so he can be confirmed in a group with everyone else.
A bit more on Baker and McDowell below . . .
Every now and then, the fact that I am a lawyer leaks through here. OK, it leaks through a lot — including my insatiable tracking of the minutia of the D.C. Circuit and how it impacts things FCC.
Which brings me to last month’s opinion in Globalstar, Inc. v. Federal Communications Commission. In the grand scheme of things, this decision only impacts two companies, Globalstar and Iridium. What makes the decision important is that it addresses the scope of a Petition for Reconsideration and whether a Petition for Recon re-opens the entire docket. Along the way, it once again admonishes parties about relying on ex partes to build an administrative record, which may actually breathe some life back into the procedural rules at a time when every FCC proceeding is “permit but disclose.”
More importantly, this case illustrates that the details of this stuff matter — not just in telecom but in all aspects of regulatory reform. If we want a real progressive movement, we need to nurture our own special teams in every policy area that follow the day-to-day mundane and prosaic details that make the difference for effective advocacy on the big ticket items.
So for all you procedure buffs out there, continued below . . . .
There’s an old saying that goes “when it rains, can’t fix the roof; when it don’t rain, the roof don’t need fixin.’” That rather sums up most efforts at government reform. When you’re out of power, you can’t really do anything about it. When you’re in power, it turns out things don’t really need fixing. So no shocker that Joe Barton (R-TX), ranking member of the House Energy and Commerce Committee, joined by Mr. Cliff Stearns (R-FL), ranking member of the Telecom Subcommittee, have decided to introduce an FCC reform bill now that (a) Democrats control Congress, and (b) Democrats control the FCC. You can find the press release here and the full bill text here.
If political expediency were a mortal sin, however, nothing would ever get done. So it is not enough to simply note that politicians of either party are more apt to want reform when they are on the outside. It is important to examine the bill in its own right. Given that a lot of folks in both parties and in the public interest community would like to see some longstanding issues corrected, and I have opined on the matter myself from time to time, it’s important to consider whether the Barton-Stearns bill makes a good start and a basis for going forward. Remember, we want functional government. If out of power Rs are now in the mood to address real issues and get substantive stuff done, the thing to do is make it easy for them to work together with Ds. Perhaps it will become a habit. OTOH, as Ds have learned over the last several month, agreement for the sake of agreement is not worth doing.
My personal feeling after a quick read is that this bill is not a bad place to start on some long-standing procedural gripes, but that there are a couple of things that worry me.
Details below . . . .
I haven’t been posting much and will continue to be busy for the next while, owing to Passover and bunch of other things. But I had to give a brief post of congratulations to Gene Kimmelman on his appointment to the Department of Justice as Chief Counsel for Competition Policy and Intergovernmental Relations. Gene has been a tireless advocate for consumer protection and pro-competitive policies as the head of Consumers Unions Washington office. His addition to the DoJ in this critical office is good news for those who want to see policies that genuinely promote competition rather than deregulation for its own sake.
Stay tuned . . . .
The Obama Administration has nominated Larry Strickling for the post of Administrator of the National Telecommunications Information Administration (NTIA). While long anticipated, the nomination was delayed until Commerce actually had a Secretary — it being polite to give the person running the Department at least the opportunity for input into who his assistant secretaries will be. It also looks like, contrary to my analysis last week, that Genachowski may come on board as soon as late April/Early May when Congress comes back from recess rather than after the DTV transition in June, and that Adelstein will simultaneously move to RUS. This would mean that the Obama administration would have their primary media/telecom team on board within the first 100 days, with the balance of the FCC waiting for the Republicans to come to some sort of consensus on whom to recommend for the second Republican slot.
More below . . .
I find myself in complete agreement with the wireless industry on supporting The Radio Spectrum Inventory Act. This Bill, sponsored by John Kerry (D-MA), Chair of The Subcommittee on Communications of the Senate commerce Committee, and Olympia Snowe (R-ME), Bill Nelson (D-FL) and Roger Wicker (R-MS), requires NTIA and the FCC to account for every MHz of spectrum between 300 MHz and 3.5 GHz within 180 days of the bill’s passage. You can see Kerry’s statement here, and Snowe’s statement in here.
“Same bed, different dreams” was the title of a book by David Lampton on Sino-US relations, and comes from a Chinese expression describing people whose lives are fundamentally intertwined but who do not fundamentally communicate with each other. That pretty much sums up supporters of more licensed spectrum and supporters of more unlicensed spectrum, both of whom very much back this bill. Kerry caught this duality nicely by saluting both the 700 MHz auction and the opening of the broadcast white spaces as demonstrating the value of spectrum access and the need for the inventory.
A bit more on this below . . .
Not unsurprisingly, we have considerable debate on the merits of the broadband stimulus package, even leaving aside the network neutrality provisions. They range from this NYT article suggesting that building out in rural is a waste and won’t create jobs to Yochai Benkler’s more optimistic piece to my own previous enthusiastic support (here and here). Along the way, we find plenty of folks with a “yes, but –” because it does not address urban builds or competition or network neutrality or other issues in a way they consider satisfactory, and this weakness, from their perspective, makes the whole bill a worthless boondoggle and a multi-billion gift to the incumbents to boot.
I find the claims of those pushing tax credits or opposing the network neutrality conditions that grants will not create any jobs or result in any new broadband uptake, and that conditions on grants will prevent anyone from building these systems, simply not credible. I can only conclude those pushing this line either don’t get outside Washington DC and New York City much or have their own agendas. Otherwise, they should check out my friend Wally Bowen at MAIN and how he and projects like him are creating jobs for network operators and bringing economic opportunity for their communities. But even setting aside such extremes, it should come as no surprise that we see a variety of opinions on what the broadband stimulus does or should do because:
1) We have a set of complex problems;
2) Everyone has a different perspective on the nature of the problem(s).
This makes assessing the cost/benefit difficult, and makes getting the prospect of any consensus of opinion phenomenally unlikely. What constitutes proof for me that this bill (even after the Senate changes) looks to do a lot of good and is therefore worth the cost won’t persuade others who disagree with me on the fundamental nature of what we need to fix.
In the hope of persuading folks, however, I lay out my arguments below on why I think the broadband stimulus is well designed to handle one piece of the very difficult puzzle of deploying a ubiquitous nationwide broadband system that all citizens will use so they can partake of the rich opportunity for civic engagement, economic development, educational opportunities, and new services such as telemedicine (even if they don’t realize they need this yet). Along the way, the stimulus bill gives another nudge (but hardly solves) the question of how to keep the internet open to innovation and “as diverse as human thought.”
