Articles by James Gattuso
James Gattuso is a Senior Research Fellow in Regulatory Policy in the Roe Institute for Economic Policy Studies at The Heritage Foundation. Gattuso also leads the Enterprise and Free Markets Initiative at Heritage, with responsiblity for a range of regulatory and market issues. Prior to joining Heritage, he served as Vice President for Policy at the Competitive Enterprise Institute and also as Vice President for Policy Development with Citizens for a Sound Economy (CSE). From 1990 to 1993, he was Deputy Chief of the Office of Plans and Policy at the Federal Communications Commission. From May 1991 to June 1992, he was detailed from the FCC to the office of Vice President Dan Quayle, where he served as Associate Director of the President's Council on Competitiveness. He lives in Alexandria, Virginia with his wife Dana, 8 year-old son, Peter (whom he relies upon to operate his VCR), and his four year-old daughter Lindsey (who does the DVD player.) He has no known hobbies, but is not nearly as boring as he seems.
No one disputes that a key goal of the FCC is to help foster diversity in, and minority access to, channels of communication. In practice, this all too often has been interpreted to mean ownership limits, set-asides, preferences and other mandates imposed by the Commission. Usually lost in the heated debates is the fact that ill-considered regulation itself can impede minority access and diversity.
In comments filed last week, a group of sixteen minority and civil rights organizations — ranging from the Lawyers’ Committee for Civil Rights Under Law to the National Conference of Black Mayors — argue that net neutrality regulation may do just that. “[T]his proceeding implicates one of the most important civil rights issues of our time,” the comments –written by David Honig of the Minority Media and Telecommunications Council — assert. Continue reading →
A funny thing happened to the FCC Friday on its way to regulating the Internet: a federal appeals court panel questioned the agency’s authority to regulate the web. There’s no final decision yet, but an adverse ruling could stop the agency’s Internet regulation plans in their tracks. And for good reason.
In proposing new neutrality rules last October, the FCC one rather inconvenient obstacle: there isn’t anything in the Communications Act, or any other statute, actually giving them power to regulate such things. Internet service, by the FCC’s own reckoning, is not a telecommunications service, nor is it cable TV, or broadcasting, or anything else the law give the FCC authority to regulate. Continue reading →
With the advent of new technology, newspapers are being threatened. Many are expected to go out of business, and the rest will have to change substantially. Many observers fear that journalism will become too driven by speed, and that judgment and deliberation will be lost. Others said that news reporting would be devalued and only those providing analysis and opinion would survivie. Worst of all, worries that the new technology will lead to a monopoly over information.
A description of the dire situation faced by newspapers today as they face the Internet? No. These are the concerns expressed in the 1840s as the telegraph transformed the news business. This week’s Economist tells the story of how Samuel Morse’s invention was thought to signal the death knell for newspapers, and to thoughtful journalism.
As it turned out, the news business was tranformed. But not in the ways many feared. With faster communications, the quality of news, and of the information Americans received, improved. Newspapers had to adapt, but survived and even prospered. And no one ever created a monopoly over information.
Good reading.
Bidding has begun on Comcast’s acquisition of a majority stake in NBC Universal. No, not the bidding between GE and Comcast over the terms of the sale. That was the comparatively easy part. The real bidding is over at the FCC, as various interests work to get concessions and pledges from Comcast as a condition of FCC approval of the deal. The jostling may put post-Thanksgiving Black Friday sales to shame. Everything from more kid’s shows to broadband open access mandates are potentially on the table.
And that’s if the sale is approved by the FCC at all. Groups such as Free Press called for its rejection as soon as it was announced. Commissioner Michael Copps underscored the alpine nature of the approval process, stating bluntly that the deal “faces a very steep climb with me.”
Amidst the din, however, one question has been drowned out: Why is the FCC involved in this at all? Continue reading →
November was certainly a bad month, public relations-wise, for the Administration’s stimulus program, what with claims that the program had created huge new numbers of jobs debunked. (Who would have guessed that numbers given for Arizona’s 15th congressional district or Minnesota’s 57th district were wrong?) But, as pointed out last week by my collegue Meinan Goto, there may be further trouble ahead. In a report recently released by the GAO, the government watchdog agency warns of possible waste, fraud and abuse in $4.7 billion broadband stimulus grants to be made by NTIA and the Rural Utilities Service.
The risks stem from a variety of sources, including the speed with which the grants are to be made, and the two agencies near-total lack of any experience with grants of this magnitude. The GAO also points out that, in true cart before horse fashion, NTIA and RUS will have to complete its first, and perhaps both, funding rounds before a map showing where broadband is needed is completed, and before the FCC completes its congressionally-mandated plan on to make broadband available.
GAO, of course, isn’t the first to point out this cart-and-horse situation, but that doesn’t make it any less serious. While less headline-grabbing than invented congressional districts, the report is nevertheless worth reading by anyone who thinks $4.7 billion is still real money.
Should the federal government regulate what blogger’s blog? Yes, said the Federal Trade Commission yesterday — at least when it comes to product endorsements.
At issue were the FTC’s guidelines concerning the use of endorsements in advertising. These guidelines, among other things, require paid endorsers of products to disclose their relationships with advertisers. The goal is a good one, to prevent deception and fraud. In practice, the lines are hard to draw — what exactly is an endorsement? What constitutes payment? It gets even harder in today’s world of user-generated media, in which much advertising is by consumers themselves on blogs and elsewhere, sharing recommendations and opinions on just about everything. Continue reading →
Is the Internet in clear and present danger? Yes, say proponents of neutrality regulation of the Internet. In his speech last month calling for FCC neutrality regulations, Chairman Julius Genachowski stopped short of quoting Oliver Wendell Holmes, but did all he could to paint a dire picture of the Internet’s future: “This is not about protecting the Internet against imaginary dangers,” he said. If we wait too long to preserve a free and open Internet, it will be too late.”
The warning evoked a certain sense of deja vu, and for good reason. As Link Hoewing over at Verizon pointed out the other day, proponents of neutrality regulation “have been yelling ‘fire’ in the movie theater ever since 1999,” when they decried the trend toward cable firms providing exclusive ISP service on broadband networks, saying that the move would result in “more price increases and fewer choices for consumers and content providers alike.”
The end has been nigh many times since. In 2003, when a court upheld the FCC’s decision not to regulate broadband as a telecommunications service, Commissioner Michael Copps said “the Internet may be dying,” glumly predicting that if the Commission continued its free-market policies, “we will look back, shake our heads and wonder whatever happened to that open, dynamic and liberating Internet that once we knew.” Continue reading →
FCC chair Julius Genachowski has certainly been busy. This week, of course, he’s been occupied with regulating the Internet. But last week, he was busy fending off charges on talk radio and elsewhere that the FCC has its very own “speech” or “diversity” czar.
At issue was the appointment in August of ex-journalist and Center for American Progress fellow Mark Lloyd to be the agency’s “chief diversity officer.” That appointment instantly caused controversy, with Lloyd has becoming a cause celebre on conservative talk radio and in the blogoshere, where he was been portrayed as yet another in a long line of powerful and unaccountable Obama policy czars and – in light of his support of government regulation of TV and radio content – a threat to free speech. Nationally syndicated talk show host Glenn Beck led the charge, at one point twittering his listeners: “Watch Dogs: FIND OUT EVERYTHING YOU CAN” about Lloyd and several other “czars.”
But the critics had their facts wrong. Lloyd was never chosen to be a “czar” of anything. That regal title – and its connotations of unlimited influence — were entirely invented by overactive imaginations in the media. Lloyd’s actual position in the FCC bureaucracy is much more prosaic — “associate general counsel.” He serves in that position along with three other associate general counsel, and three deputy general counsels. Anyone who’s worked at the FCC knows that is an unlikely locus of power.
Continue reading →
Haven’t they been punished enough? Inmates in our nation’s prisons may find themselves without over-the-air television next February, unless Congress acts to fill a gap in the subsidy program for TV converter boxes. That’s right: according to a story run last week by Associated Press, “the upcoming switch to digital television is presenting a challenge to prison officials who want to make sure prison TVs are up and running. When broadcasters make the switch in February, televisions that aren’t hooked up to cable, satellite or a converter box will be reduced to static”.
The reason? Under the converter box subsidy program established by Congress, prisons are not eligible for the $40 subsidy for the converter boxes needed to let old televisions pick up broadcast signals after next February. That means — unless prison officials somehow find $40 elsewhere — or unless their penal institution has a cable or satellite subscription — incarcerated murderers and thieves will be forced to watch static.
Honest to god. I’m not making this up. This was an actual news story. The AP story went on to explain that “[w]hile TV might seem like an undeserved luxury for inmates, both prison officials and prisoners said the tube provides a sense of normalcy.”
Oh, now I understand. “Normalcy.” I didn’t understand that prison is supposed to provide a sense of normalcy.
Excuse me while I sit in stunned silence for a moment.
One interesting side note. I found the AP story on the website of WYFF in Greenville, SC, which — perhaps not surprisingly — is an over-the-air TV station. Go figure.
Communications Daily (subscription) reported today on the avalanche of lawsuits being filed challenging the FCC’s Comcast “net neutrality” order. Four were filed this week in four different U.S. appeals circuits — the lucky court that will actually decide the case will be decided by lottery.
The story quotes Ben Scott of Free Press, the energizer rabbit of pro-regulation media groups, decrying Comcast’s appeal. “The Internet is too important to let Comcast tie it up in legal limbo,’ he says. “Congress should act now to pass Net Neutrality laws that clear up any uncertainty once and for all.”
Huh? On what planet, exactly, is Free Press based? Put aside for the moment the question of whether Comcast is responsible for the legal chaos that has ensued from the FCC’s decision to regulate the way it manages Internet traffic. Strangely enough, when Free Press petitioned the Commission to get involved, I didn’t hear them decrying the “legal limbo” it would cause.
But even more jaw-dropping is the idea that Congress could “clear up any uncertainty” by adopting its own Internet regulations. The mind boggles. The last major congressional foray into communications policy was the Telecommunications Act of 1996, which spawned over half a decade of litigation. There are still children of telecom lawyers going to college off the fees generated by that one.
And that legislation was a relative piece of chocolate cake compared to the torte of net neutrality. Proponents of mandated neutrality — which Commissioner Robert McDowell has likened to a regulatory Rorschach test — can’t even agree on what it is. Lord know how long it would take the courts to sort it out — if ever they are able to.
Free Press is right, of course, to worry about the endless litigation which will — and already is — being caused by FCC Internet regulation. Rather than even more rules from Congress, however, the solution is for the FCC to reverse course on the regulation it unwisely imposed last month.
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