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.
Replace Howard Stern? Like him or not, that’s a tall order for CBS Radio (formerly Infinity Broadcasting). In fact, the company chose two people to replace the famously potty-mouthed and popular radio host (who now operates from Sirius satellite radio, safe from the FCC’s prying ears.) On the east coast, listeners will hear David Lee Roth, on the West Coast, Adam Carolla–known to cable television viewers for hosting the “Man Show.”
So where do you go to promote your show if you are replacing Howard Stern? To National Public Radio, of course. This morning Carolla did just that, shaking up the normally ever proper and serious “Morning Edition” show.
Toward the end of the interview, host Rene Montagne asked Adam whether he’d been given a talk on FCC indecency rules. He had of course–Infinitiy’s lawyer’s aren’t crazy. But Carolla then quickly pointed out this stuff wasn’t new to him. Everyone asks him, he said, whether he’s just going to go out and start throwing the “f-bomb”. His answer: “I’ve been on TV for ten years, what the [bleep] do you think I’m gonna do?”
It was probably the first time in decades the Morning Edition crew had to use their bleep button. Stern may be gone, but things may still be interesting for CBS and the FCC. Stay tuned.
The idea of a la carte pricing for cable television has taken a beating since Kevin Martin suggested it in a congressional forum a few weeks ago. (For some good pieces by my TLF colleagues, look here, here, and here. It’s clear that a la carte pricing is no free lunch for consumers (no pun), and that there have long been good business reasons for maintaining a system of packaging channels. But nothing ever stays the same in fast-changing tech markets, and that may apply to cable pricing as well. In a just-released Heritage Foundation paper, I argue that while regulation to force a la carte would be unwise, there’s a good possibility that the markeplace–without regulation–may soon provide it. Specifically, new competition by former phone companies Verizon and AT&T could upset the cable pricing applecart, and perhaps lead to a la carte pricing–or something close to it. As explained in the paper:
Continue reading →
More from our Bizarre Survey Department: Everyone knows what VOIP is by now right? Voice Over Internet Protocol telephony is the hottest thing in the communications world, and tech policy geeks can talk about it–as well as over it–all night. But, according to a survey conducted by Harris Interactive, most Americans have no clue what it is. The Verizon-commissioned survey, conducted in May but just released recently, found 87 percent of respondents could not say what VOIP was. Of those who took a guess, 20 percent said it was a hybrid European car. Another 10 percent thought it was perhaps a low-carb vodka.
Is this bad news for VOIP providers? Not really. People don’t really care what their phone service is called, they just want to be able to talk on the phone without spending a lot of money. It is techies and policy geeks who should take heed–as excited as we may get over all this new stuff, most people don’t know what the heck we are talking about. If only they read the Tech Liberation Front more often…
Its enough to make you reach for a bottle of Voip.
Supporters of telecom reform got an unexpected Christmas present yesterday as Sen. Jim DeMint, a Republican from South Carolina, introduced the “Digital Age Communication Act.” If the name sounds familiar, it should–DACA is the product of a year-long effort by the Progress and Freedom Foundation to develop a free-market framework for telecom reform. DeMint’s proposal takes the parts of the PFF plan completed to date–including proposals for regulation and for universal service subsidies–and puts them into legislation.
DACA represents the work of dozens of telecom experts from academia and the think-tank world, serving on working groups covering all aspects of telecommunications policy. (I was pleased to be able to serve on two of those groups). While not all of the groups have completed their work, the product so far provides a market-oriented, yet practical, framework for reform. The core of the plan is a new approach to regulation. Instead of defining regulation by type of service (what PFF’s Randy May calls “technocentric” regulation) rules are applied based on the presence or absence of competition, using an “unfair competition” test borrowed from the Federal Trade Commission Act. Other sections of DACA would replace current universal subsidies with block grants to the states, and limit state and local regulation of telecom and cable TV services.
No one will agree with all aspects of the plan. In many areas, it could have gone further. Rather than provide “unfair competition” authority to the FCC, I would have preferred to recognize that the FTC already has such rules, apply them to telecom, and send everybody home. That said, the DACA approach is the best entrant so far in Congress’ telecom sweepstakes, showing that free-market concepts can be incorporated into practical proposals. Kudos to PFF and Sen. DeMint for taking the telecom debate a big step forward.
The New Milenium Research Council today released a study on the benefits of broadband, which finds almost $1 trillion in benefits related to elderly and disabled Americans alone. Its a pretty good study, authored by Brooking’s Robert Litan. Overall, a good contribution to the debate, underscoring the importance of this technology. Of course, the number is just an estimate (as Litan himself says), since so many of the benefits of quick and easy Internet access just aren’t quantifiable. For instance, how do you value the innovations that haven’t yet been innovated? The analysis in the paper gives a pretty good sense of this unpredictablity. The report is worth reading and is sure to come up often in broadband policy debates.
News of the video bizarre: According to a just-released survey by Scientific-Atlanta, millions of people who have HDTV sets apparently think they are watching high definition television, but aren’t. The survey was spurred by an earlier Forrester Research projection that by the end of the year some 16 million U.S. households will have HDTV sets, but only seven million wll have HDTV reception. The Scientific Atlanta survey found that, yes, some 49 percent of households were not taking advantage of their HD equipment. About a quarter found that their HD set itself provided better reception, without taking the additional steps necessary to view HD. Eighteen percent said they didn’t even know needed additional equipment, such as a set-top box or antenna. A quarter admitted they thought they were watching HD video because, after all, the programs said at the beginning that they were broadcast in HDTV.
The survey confirms the long-standing prejudice of many of us non-videophiles that HDTV really isn’t all that impressive. Still, it is milding shocking that so many people plunk down money for an HD set, but never catch on that it isn’t actually turned on.
This could open up a slew of innovative policy options for the digital transition. Perhaps, instead of actually allocating spectrum to HDTV broadcasts, the FCC could just say it has done so, saving the spectrum for more valued uses. And instead of requiring HD tuners on sets, the FCC could just require a sticker saying the set has an HD tuner. The possibilities are endless.
Politics in California is often surprising, especially so under Governor Arnold Schwarzenegger. As if the point needed proving, the governor stunned state politicos by naming of a card-carrying Democratic leftist, Susan Kennedy as his new chief of staff. Kennedy (no relation to the governor’s in-laws) has a eyebrow-raising political pedigree–a former assiciate of Tom Hayden and Jane Fonda, and deputy chief of staff to former Governor Gray Davis.
Conservatives are aghast. Political pundit John Fund of the Wall Street Journal today asked in horror “has Governor Schwarzenegger jumped the shark?” The selection of Ms. Kennedy, he said, may be the governor’s “Harriet Miers” moment.
Fund–who is usually right about such things–is wrong here. Harriet Miers was a moderate Republican whose political views were obscure. No one is accusing Kennedy of being a moderate. But– in another California surprise–she is a strong supporter of economic deregulation. In her previous job as a California PUC commissioner, she was a leader in the fight to reduce telecom regulation. One of only a handful of pro-market state regulators in the country, she put even most Republican PUC members to shame. She co-founded, along with Florida GOP regulator Charles Davidson, the “Federation for Economically-Rational Utility Policy. (See “Economically-Rational Regulators, Not an Oxymoron Anymore.”) Perhaps more colorfully, she has been called “California’s Deregulation Energizer Bunny” in Cisco’s high-tech blog.
I have no idea what Kennedy’s views are on other issues. But, as a regulator for the past three years, she resembled former governor Reagan than former Governor Davis. Pigeon-holing her politics may not be as easy as it looks. Pundits should prepare for more surprises.
From the Onion.
FCC: All Programming To Be Broadcast In ADHDTV By 2007
November 23, 2005 | Issue 41•47
WASHINGTON, DC–The Federal Communications Commission voted 3-1 Monday to require electronics manufacturers to make all television sets ADHD-compatible within two years…FCC Chairman Kevin Martin characterized the move as “a natural, forward-thinking response to the changing needs of the average American viewer…”
…”In the media-saturated climate of the modern age, few have the time and energy to sit still for an entire episode of King Of Queens,” Martin said. “Although the FCC will leave it up to the television networks to make the necessary programming changes, we are recommending, in accordance with the ADHDTV standard, that all shows be no more than six minutes in length, and that they contain jarring and unpredictable camera cuts to shiny props and detailed background sets…”
…The ruling represents a growing shift toward ADHDTV, a television format designed to meet the needs of an increasingly inattentive and hyperactive audience. The tuner includes a built-in device that automatically changes channels after three minutes of uninterrupted single-station viewing, as well as a picture-in-picture-in-picture-in-picture option…”A majority of our shows are only watchable for a few minutes at a time anyway,” said Fox president Peter Liguori, whose recently unveiled fall 2007 TV schedule includes over 850 new series. ..
Well, it could be true. They’ve done stranger things.
Happy Thanksgiving…
Speaking of departures, today another departure from the telecommunications scene was finalized–that of AT&T. The final paperwork was concluded earlier today with the filing of a merger certificate with the New York state secretary of state.
Making things more than a little confusing, the name “AT&T” will not actually be retired–instead the SBC moniker will be leaving the stage. The merged company will take the historic AT&T name.
The most remarkable thing about this is the lack of attention it is getting. The old AT&T was once one of the most powerful companies in the world. And for the past 20 years, its battles (along with MCI and Sprint) with the Bells kept food on the table for hundreds of lobbyists and lawyers. Yet, its final passing–and that of the long-distance industry as a whole, has barely reached outside the business sections of newspapers. The fact is (as argued here earlier this year) the world has moved on. Real competition in the phone business is raging–with wireless firms, cable firms, and Internet providers all joining the fray. This leaves the old AT&T looking somewhat dated, like a rotary dial phone among Blackberries.
It bequeathes no monopoly its new owners–only an object lesson. The new AT&T (which will still be called SBC until Monday) cannot rely on size alone. It–like its competitors–must survive by providing what consumers what. That’s the way it should be.
Yesterday, Kathleen Abernathy– one of two current GOP members of the FCC–announced she would be leaving the Commission effective December 9. The announcement was no surprise–her term has already expired, and she had long made it clear that she would not seek re-appointment.
Still, she will be missed. Abernathy is one of a rare breed in Washington–a policymaker who never really sought the limelight, but consistently worked to do the right thing. Her style was in marked contrast to the flamboyant pyrotechnic style of others, such as former chair Michael Powell. Perhaps that was because of her long service as an FCC staffer, perhaps that is just her personality. But limelight or no, Abernathy’s opinions and votes always seemed well-reasoned, and grounded in common sense. And, while Powell and others got attention for being pro-market visionaries, Abernathy proved herself as the most consistent voice for markets at the Commission during her tenure.
As noted here previously, President Bush has yet to name her sucessor. Finding someone as good will be difficult. But he should try.
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.