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.
The UN’s World Summit on the Information Society ended today with the U.S.–or more precisely Internet users around the world–coming up winners. Efforts to impose international controls over Internet governance were firmly beaten back. Instead, the summit only called for creation of an advisory “International Internet Governance Forum,” with no binding authority. The new forum will meet next year in Greece.
Efforts to impose international control over the Internet, of course are unlikely to go away. UN Secretary-General Kofi Annan said as much earlier this week, stating that the Tunis agreement highlights the need for more international participation in discussion of Internet governance issues. The question is how to achieve this. Let those discussions continue.” For this reason, the new forum bears watching, lest it morph into an international regulatory body.
Still, its hard not to be pleased, and relieved, at this week’s outcome. The quote of the week goes to Commerce Department telecom chief Michael Gallagher, who said: “The Internet lives to innovate another day because of our combined efforts here.”
Kudos for the outcome are due to the Bush Administration for standing firm on this critical issue. Administration policymakers –including Gallagher and state department official David Gross–recognized early the dangers of globalizing Internet governance, and stood firm in their opposition.
Thanks also should go to the government of Tunisia, who hosted the conference. Its efforts to blot out unpleasant dissent during the conference–which included the blocking of websites from the country–did far more than any speech or policy paper to highlight the critical importance of protecting Internet freedom.
(For some interesting takes on the Tunis summit and its implications, check out the discussion held at The Heritage Foundation yesterday on the subject–featuring Sen. Norm Coleman, Rep. John Doolittle, fellow TLFer Adam Thierer and The Heritage Foundation’s John Tkacik.)
Delegates and other assorted hangers-on are gathering in Tunis this week for tomorrow’s start of the UN’s “World Summit on the Information Society.” Given the topic, one would expect a fairly free flow of information surrounding the event–for appearance sake, if nothing else. Not so. Reports are that Tunisian authorities broke up a meeting on press freedom, beat up a French journalist, and blocked access inside the country to a website of a side event called the “Citizen Summit on the Information Society.”
Certainly an odd way to begin a summit on the information society. If this is what happens when a government is on its best behavior, what happens when nobody is watching? No wonder there’s so much opposition to plans–to be debated at the summit–to “globalize” governance of the Internet.
The Tunis summit, by the way, will be the subject of a Heritage policy forum on Thursday, November 17 at 10 am. Speakers include Sen. Norm Coleman, Rep. John Doolittle, Heritage China expert John Tkacik and fellow TLF blogger Adam Thiere. If you are in DC, stop by. If not, you can catch it on the web. Details here.
After months of delay, President Bush announced two appointments to the FCC yesterday–Republican Deborah Tate , currently director of the Tennessee Regulatory Authority, and Democrat Michael Copps, who will be reappointed to his current seat. Neither was a surprise. What should raise eyebrows, however, is the missing name–White House tech staffer Richard Russell, who had been widely expected to be tapped for a third seat. His absence–reportedly due to objections by Sen Ted “Bridge to Nowhere” Stevens–is cause for concern.
Tate will fill the empty seat left by departed FCC chair Michael Powell, giving the Republicans a 3-2 edge at the agency. This is good news. The current 2-2 split has stalled the commission, and given the two Democratic members veto power over decision making. Case in point: the recent conditional approval of the AT&T and MCI acquisitions.
Copps’ reappointment is more disturbing. Like a modern-day Will Rogers, it seems Copps has never met a regulation he doesn’t like. He is an avid critic of free markets, and (except perhaps on indecency issues) seems to oppose the Bush agenda across the board. Yet, he gets Bush’s nod for the seat because of a recently invented “tradition” of letting Democratic Senate leaders choose Democratic members of the FCC. By bowing to this practice, Bush is sacrificing not just his presidential perogatives, but good telecom policy.
Yesterday’s surprise however was the FCC dog that did not bark–Richard Russell. Russell is a highly-regarded associate director at the White House Office of Science and Technology Policy, and had been widely assumed to be in line for the FCC seat being vacated by Commissioner Kathleen Abernathy. So what happened? Apparently, he was nixed by Commerce Committee chair Ted Stevens. Stevens–who most recently has been in the news for spending billions on empty bridges in Alaska and subsidies for old TVs–reportedly did not think Russell was adequately supportive of rural telephone service subsidies.
The details–as they tend to be in such situations–are unclear. Russell may or may not still be in the running. And if he is out, who will replace him? And who will choose? Having given away the right to choose the two Democratic members, the White House can scarcely afford cede the rest of its appointment power. Certainly there should be at least some appointments saved for people who actually support the president’s agenda. Or–perhaps I’m dreaming here–actually support free-markets.
Stay tuned.
The FCC today unanimously approved SBC’s acquisition of AT&T as well as Verizon’s purchase of MCI, ending a federal approval process that began early this year. For these mergers to take effect, now all that is needed is approval by a few remaining state regulators.
Symbolically, the mergers revolutionize the telecom industry–ending for all intents and purposes the 20-year split between long-distance and local portions of the industry, and he political warfare that went along with it. Yet, there was always less to the mergers than met the eye. Their effect on the marketplace will actually be quite limited. It been a few years since consumers looked to AT&T and MCI for telecom choice, moving instead to wireless and net-based alternatives. And with E-Bay and Google now playing on the telecom field, the significance of these mergers wi. (See “Ma Bells’ Retirement: No Big Deal“) And, with SBC’s announcement that it will change its own name to AT&T, even the cosmetic change is diminished.
Still, there’s a fair amount of gain to be had by integrating these firms into SBC and Verizon respectively. Yet, these gains will be limited, thanks to regulatory conditions placed on the deals. Each firm pledged to abide by restrictions demanded by the Commission, ranging from leasing lines toEven this will be limited, though, by 13 specified conditions, ranging from a freeze on UNE rates to maintaining “settlement free” peering policies for Internet backbone traffic (though the Commission found the mergers did not threaten competition in this market). The conditions even included special commitments regarding the state of Alaska.
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Last minute addition to the schedule for tomorrow’s event at Heritage on digital television: Ken Ferree, former FCC media bureau chief, and–until last week–COO of the Corporation for Public Broadcasting. Ferree led the Commission’s DTV efforts during the Powell era, and is known for his outspoken views (of broadcasters: “They’d rather eat their children than give up their spectrum.”)
Ferree joins Tom Hazlett of George Mason University, Peter PItsch of Intel, former Ass’t Attorney General Chuck Cooper and New American Foundation senior fellow Jim Snider in what promises to be quite an interesting discussion. Stop by if you can, or watch it on the Internet. Details here.
New paper just out today from Heritage on the DTV transition, looking ahead to next week’s Senate vote on setting a “hard date” for the end of analog….
Since the days of Ed Sullivan and Milton Berle, television has been broadcast using the same technology and largely over the same frequencies. That is about to change. Later this month, Congress will vote on setting a firm date when TV broadcasters will have to end their analog broadcasts and return the frequencies used for them. Afterward, all TV broadcasts will use digital television technologies. This transition is critical–not so much for television viewers, few of whom watch television over the air anyway, but for consumers of innovative new wireless services that can put the old TV spectrum to better use…more
If you find nothing on TV to watch next Wednesday afternoon, those of you in the DC area may want to come down to The Heritage Foundation at 12:30 for what should be an interesting discussion of the transition to digital television. WIth Congress planning to move legislation on key DTV issues–a hard date for return of the “old” spectrum, tuner subsidies, and must-carry to name a few, it should be a timely discussion as well. Participants include Peter Pitsch, high-tech’s man on DTV; Chuck Cooper, author of a new study arguing that must-carry may be the next Kelo taking; and the always-on Tom Hazlett of the Manhattan Institute.
Try to make it if you can. You can get details and RSVP here.
The other day, a report came out from an inflential media advocacy group advocating “unplugging” the Corporation for Public Broadcasting and making it independent of the federal government. Such calls, of course hardly cause a ripple when they are made by conservatives or liberations (even here at TLF). But this particular report was from FAIR — Fairness and Accuracy in Reporting–a certifiably Leftie group that campaigns against conservative bias in the media. (With–until recently–stunning success, it seems. Of course, they don’t see it that way.)
Anyway, FAIR is fed up with CPB, now that it is led by conservatives, such as Ken Tomlinson, its chairman. Tomlinson has been pushing to balance public broadcasting’s output–which has been famously left-leaning for years. (They see Tomlinson, of course, as pushing for conservative bias in public broadcasting.)
FAIR’s solution: to cut CPB off from the federal government, making it an independent foundation. Enough of trying to “save” CPB, they say. The only way to protect public broadcasting is to cut it free of meddling (conservative) officials. They write:
Media activists, independent producers and public broadcasting advocates need to ask themselves whether CPB funding is needed to keep public broadcasting afloat–or whether that government support compromises the very independence of PBS and NPR, and prevents them from ever fulfilling their promise.
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In case you missed it, The Economist ran an excellent editorial and survey article last week on the ongoing Internet revolution in the phone business. The title on the cover, “How the Internet Killed the Phone Business” is a bit misleading–as the article points out, telephony will likely expand massively as Internet technologies take hold. It’s the existing telephone companies that are at risk. Interestingly, the article argues that its not traditional wireline firms that are most threatened – since they are quickly moving into Internet-based services themselves. Rather, say the authors, stand-alone wireless firms who are more dependent on voice calls have the biggest reason to worry. The magazine’s overall conclusion:
It is now no longer a question of whether VOIP will wipe out traditional telephony, but a question of how quickly it will do so. People in the industry are already talking about the day, perhaps only five years away, when telephony will be a free service offered as part of a bundle of services as an incentive to buy other things such as broadband access or pay-TV services. VOIP, in short, is completely reshaping the telecoms landscape.
Worth reading.
As noted in the post below, the telecommunications reform plan floated recently by the staff of the House Energy and Commerce committee includes some 80 regulations, mandates or restrictions. To be more precise, there are, by my count, 82–more than one per page. Of course, some might quibble over this number– the difference between a rule with two mandates and a rule with one two-part mandate is an ephemeral one. And certainly the mandates vary in significance. Some are trivial, some are burdensome, some are justified, some are outrageous. But any way you look at it, there are an awful lot of them. Here they are:
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