Y’all should check out chapter 6 of the annual report of the Council of Economic Advisors, which is on Innovation and the Information Economy. The CEA issued the report this month, but I haven’t read much on it, other than a recent PFF blog posting.
The report has a good discussion on contestability theory in telecom:
However, natural monopoly does not necessarily mean economic regulation is needed to protect consumers from monopoly prices. While natural monopoly means that competition in the field is unlikely to arise, there could still be vigorous competition for the field–that is, competition among firms to attain the position of monopolist.
I’ve never thought there was anything “natural” about having one company be the phone service provider for the entire country.
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Did anyone else notice that the Internet didn’t come up at all in the President’s State of the Union speech last night? Not a mention. Nada. Of course, you can’t mention everything in one speech. Presidents that have tried to do so end with speeches that are forgettable political laundry lists. Still, I would have hoped that somewhere the President could have mentioned the technology that is changing our lives, and his policies toward it.
Making things worse, Dem Senate leader Harry Reid did mention the Internet in his response–but only to give the government credit for “creating” it in the ’70s.
President Bush, of course, will have plenty of other opportunities in the coming months to show that he recognizes the critical role of Internet policy, starting with the selection of a new FCC chairman. Its not Iraq, but nonetheless an area where some bold thinking would help.
After four tumultuous years as chairman of the FCC, Michael Powell today announced his resignation, effective at the end of this month. To the general public, Powell was known–if at all–for his fights against Howard Stern, wardrobe malfunctions, and other forms of profanity on the web. But Powell’s–and the FCC’s–far more important work was in the far more boring–but economically critical–area of telecommunications regulation. Powell was–as Adam Thierer of Cato put it–as “the regulator who loved markets.” A fan of Hayek, Powell fought top reduce obsolete regulation of telephone markets, and to keep new regulations from being imposed on emerging telecom technologies. As a result, these markets are certainly freer–and Americans better off–than they would have been otherwise.
Nevertheless, Powell leaves with many of his efforts incomplete. Reform of forced sharing rules for telephone companies as yet leaves many of these senseless regulations in effect, and mired in litigation. And despite good first steps toward protecting Internet telephony from regulation, the final status of this revolutionary new service remains in doubt. Many blame Powell’s unusual (some say eccentric) personal style for impeding reform. Recalcitrant fellow commissioners certainly didn’t help. Nor did a White House that was often unhelpful on key telecom reform issues.
The key question now is who will replace Powell. One leading contender is current Commissioner Kevin Martin. Until recently, Martin was seen as a strong supporter of deregulation. But, in a critical 2003 battle over telecom rules, he broke ranks with Powell, and teamed with the FCC’s two Democrats to pass a significantly more regulatory set of rules. For Martin to be rewarded now with the chairmanship would raise more than a few questions.
Fortunately, there are a number of other candidates who could effectively take over the reform banner at the FCC. Among these: Peter Pitsch–Intel’s man for telecom policy in Washington, and a former chief of staff at the Reagan-era FCC. Combining a firm grasp of free-market principles with an intimate knowledge of how Washington works, Pitsch could be prove effective at leading reform. Similarly, Janice Obuchowski, who headed up telecom policy at the Commerce Department in the first Bush Administration would make an excellent choice. Another promising contender is Mike Gallagher, who is the current telecom head over at Commerce.
Historically, FCC selections have been a bit of an afterthought for presidents, sub-cabinet positions with little political consequence. For better or worse, that is no longer true: the FCC now sits front and center, regulating (or not regulating) key parts of the of the information economy. The selection will also say much about Bush’s attitude toward regulation as a whole during his second term. This is an opportunity that should not be squandered.
There’s a good ol’ political dust-up underway about whether Pennsylvania Senator Rick Santorum should have educated his children through the Pennsylvania Cyber Charter School. He owns a house in the district served by the school, but his family’s main residence is in Virginia. He’s taken the kids out of the cyber school in favor of the home-schooling option.
One school board member’s demand that Santorum pay back $100,000 might be a little more revealing than she wants it to be.
It reminds me of a congressional junket I went on one time (sponsored by Qwest, if full disclosure interests you). In Southern Oregon, we visited all these companies that were using broadband to ramp up their efficiency and business processes. Then we visited a public entity – some kind of special school, I honestly can’t remember – that was using technology in similar ways. They went through all the great tech stuff they were doing and concluded with how important it was to be able to get funding for it all.
HOLD IT! Every place in the private sector, technology was bringing down costs while improving services. But in the public sector, technology was a new cost-center. It didn’t pass the smell test. Rather, it stunk. A bit of that aroma is on this story.
Santorum has five kids, and he might have been sending them to this school for a number of years, but cyber-education should be closer to free than $100,000.
Will political spam have an impact on the election? I doubt it, but there’s a company called MailFrontier that says it could.
If you’re wondering where the Presidential candidates stand on tech issues, CompTIA interviewed both campaigns and the record is here. They don’t seem all that different from each other (mainly b/c Kerry is so vague it’s hard to tell what his positions are on some issues). On VoIP, though, Kerry’s response seems more regulatory in tone whereas Bush seems more free market. The Chronicle also did a comparison.
Amit Yoran is gone. And he might as well be saying how can a cybersecurity czar help online security when the Administration sends out signals of “wrong war, wrong place, wrong time?”
The news reports say Yoran’s departure was a result of his wanting more authority to address cybersecurity issues. As the director of the National Cyber Security Division, he was charged with implementing President Bush’s “National Strategy to Secure Cyberspace.” Will there now be a call for more government involvement in cybersecurity? Does cybersecurity warrant Assistant Secretary status within DHS, a position that has direct access to Secretary Tom Ridge?
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Today’s National Journal Technology Daily (subscriber-only website) contains a very interesting People Section column by Sarah Lai Stirland entitled “Washington’s Silicon Square.” Stirland notes that, “California has its Silicon Valley, Boston has its Silicon Corridor and Scotland has its Silicon Glen. Now some lobbyists in Washington, D.C., are starting to refer to the downtown area around Franklin Square as Silicon Square.” Hewlett-Packard recently moved their government affairs office to that area and other tech giants like Dell, IBM and Microsoft also have offices in the area. Apparently, therefore, people have started to refer to the area as “Silicon Square.”
No offense to these fine companies, and the many talented people who work in these offices, but I regard this as an absolutely dreadful development. Is it really a sign of progress when the technology community now has such a substantial presence inside the Beltway that there is a small region named “Silicon Square”? After all, what exactly (besides a lot of legal paperwork) is being produced in and around “Silicon Square”?
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As part of their continuing effort to censor political speech in America, several “campaign reformers” in Congress have won an important case in the U.S. District Court regarding FEC interpretations of the Bipartisan Campaign Reform Act (“BCRA”).
I’m not going to go off on a rant about this disgusting piece of political censorship, but if you want to understand just how despicable this incumbent protection legislation really is, then I encourage you to read “Campaign Finance Reform: Searching for Corruption in All the Wrong Places” by Brad Smith and “Making the World Safer for Incumbents The Consequences of McCain-Feingold-Cochran,” by John Samples.
It just makes me sick to think that politicians can just throw around the word “corruption” so loosely and then ban all sorts of legitimate political speech and advertising before an election as a result. Amazingly, we now live in a country that affords more constitutional protections to Internet pornography than political speech before elections. While I’m happy the courts apply such strict scrutiny to other forms of speech, one wonders what our Founding Fathers would have thought about a state of affairs where you have an absolute right to view porn online but not see certain types of political advertising 60 days before an election. Bizarre.
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The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.