Maybe I’m just a grumpy old economist, but I was struck just how misleading a recent commercial from the Esurance auto insurance company is.
It suggests that there are real savings, economically and ecologically, associated with the fact that Esurance provides only online proof of insurance cards. Since states still require you to have a paper proof of insurance in your car, all this amounts to is transfer of the transaction costs associated with printing a paper proof of insurance from Esurance to the customer. That’s hardly a savings to the customer.
What’s worse is that the claimed ecological savings is complete bunkum. If Esurance provided the paper proof of insurance, it could ensure ecological benefits by a corporate policy of printing them only on recycled stock. By forcing the customer to print it, Esurance virtually guarantees that only customers who assume the transaction costs of obtaining recycled stock to use with their own printers provide the promised ecological savings. Esurance’s policy virtually guarantees that the vast majority of its paper proofs of insurance will benefit the environment not a whit.
Just for the misleading economic and ecological claims I’d be inclined to give Esurance a thumbs down, but the assumption that people are too stupid to think this nonsense through really seals the deal.
One may logically ask, if I am right about the wireless microphones being such a big problem for public safety, why haven’t the public safety folks complained to the FCC about this?
Answer: turns out they have. But, the public safety folks being quiet and unassuming, failed to make themselves heard.
Allow me to change that. The National Public Safety Telecommunications Council, a federation of public safety associations, sent a letter to Chairman Martin asking that the FCC address the problem of wireless microphones back on June 30, 2008. i.e., about two weeks before I filed. While I wish I could claim that it was the NPSTC letter that inspired me, I had no idea it was out there until today. My conversations with the public safety guys were all informal and off the record. Still, as always when folks remind me I’m not an engineer (or an economist, or technologist, or any of the other topics on which I chose to share my humble layperson’s opinion), I am rather pleased to find a bunch of actual engineers that agree with me.
Mind you, the NPSTC letter asks the FCC to go a heck of a lot further than I have. NPSTC wants wireless microphones kicked out of the entire 700 MHz band. I, OTOH, think lots of folks can productively use the broadcast white spaces. Still, I do feel compelled to point out that wireless microphones do not have nearly the level of intelligence/sophistication being discussed for interference avoidance for the white spaces devices at issue in 04-186. Perhaps we should require wireless microphones to rely on sensing as well, or require that they consult an online database for possible new users in the band, or require them to acknowledge some sort of “permissive beacon.” Perhaps public safety entities like NPSTC should administer the database or beacon, and we should require wireless microphone users to pay for these services.
I mean, after all, we wouldn’t want to let these devices run around loose, would we? Think of the terrible interference that might cause. Unless these devices can meet the same rigorous standards that Shure and others seek to impose on unlicensed devices in 04-186, I don’t see how we can ask NPSTC to abide by circumstances that they feel place our public safety at risk.
For those who subscribe to Tales of the Sausage Factory but not Wetmachine Main, I thought I would let you all know that my friend and ace economist Dr. Gregory Rose has started a new blog here at wetmachine called Econoklastic. You can read his first post here. Regular readers will recognize Greg’s name as the author of several spectrum studies that I quote incessantly, such as the ones describing how SpectrumCo and its wireless allies blocked competitors from getting licenses in last year’s AWS auction.
As you can tell from his first post, Greg is quite contrarian and willing to grind more than a few sacred cows into hamburger. It’s why we like to keep him around.
As I said last night, the refusal to look at new evidence is what makes the difference between religious conviction and mere operating bias. More recent stories now quote the only FCC source to go on the record (as opposed to unnamed sources) as saying the suppression of the report was ordered by “a senior official,” rather than definitively going up to Powell. Powell denies he ever saw the report or ordered it destroyed.
All the more reason for Martin to conduct an investigation and get this matter resolved. Because I’ve read the study and run it past an economist and, as far as he and I can determine, it is sound methodologically and valuable in the debate on ownership. It should have been published when it came out. If there is a “senior official” at the FCC who ordered it destroyed who is still there, that “senior official” needs to get removed from the process.
So I will start with an apology to Powell for rushing to judgment. It is entirely possible that some “senior official,” entirely unknown to Michael Powell, killed the report to avoid giving Powell news he thought Powell would not want to see. I will add that I wish I lived in a world where my first thought was not “that is just so typical of this administration.” And no, it’s not Powell’s fault that after admant denials that the administration was spying on Americans, it turned out they were, and after adamant denials that the administration did not keep prisoners in secret prisons in Europe, we did, etc. But Powell deserves to have his chance to reply and deserves an investigation at the FCC to resolve the matter once and for all.
For the forseeable future, we’re stuck with spectrum auctions, so we may as well try to get them to work as well as possible. Contrary to what some folks argue, I don’t think that means just jacking up one-time revenue to the government. It means trying to get licenses to folks who don’t usually get ’em (like women-owned businesses, minority-owned businesses, and small businesses generally), trying to get services deployed to underserved communities, and trying to foster real competition.
So last week, MAP submitted a lengthy set of comments (including a 30-page econ analysis from my economist friend Greg Rose) on reforming the FCC’s designated entity “bidding credit” for the upcomming AWS auction.
What does all this mean, and why should the guy who says “spectrum auctions are the crack cocaine of public policy” care? See below . . .