The first full day of the Forum began with a keynote by Tim Bresnahan, Landau Professor of Technology and the Economy, Department of Economics and, by courtesy, Professor of Economics for the Graduate School of Business at Stanford University. Bresnahan kicked off the conference with a riveting talk on ICT innovation over the past 50 years and his prediction of what’s to come. During the Q&A session, he was asked if we are accurately measuring ICT innovations and their effect on the economy. Bresnahan explained that jobs and shifts in the labor force were a fairly accurate representation, as quality improvements are hard to quantify. The entire keynote can be viewed here.
The first panel of the day was a nod to the theme of the conference, “Fall and Rise of the Regulatory State,” moderated by TPI President Thomas Lenard. Many of the panelists took issue with the idea that we’ve reverted to pre-emptive regulation void of evidence of harm. Robert Crandall, TPI Adjunct Senior Fellow and Nonresident Senior Fellow at Brookings Institution, stated that much of this pre-emptive regulation is concentrated in a few key areas, such as banking and environmental, and is not necessarily a trend. Roger Noll of Stanford University sees that market-based solutions are actually preferred, as illustrated by cap-and-trade for environmental concerns and the auctioning of spectrum. Nancy Rose, Deputy Assistant Attorney General for Economic Analysis, Antitrust Division at the U.S. Department of Justice also stated that there is not an obvious resurgence and that we are seeing more regulation to deal with externalities due to higher standards of living, not necessarily economic regulation.
Taking a slightly different view was William Kovacic from George Washington University Law School. He explained that Europe now sets the global norms and standards for regulation, and the shift is taking place outside of the U.S. However, Howard Shelanski from OMB took issue with this perception and stated that the U.S. has been a leader in regulatory analysis and therefore other countries have followed. The panel can now be viewed online.
The second panel “Congress and the FCC after Title II” was moderated by TPI’s Scott Wallsten. Rebecca Arbogast from Comcast warned that “we are coming to the requiem of good policymaking.” She stated Title II reclassification and the related regulatory requirement are putting a drag on what has been a bright spot in the U.S. economy and will hamper new services and risk-taking by ISPs. Robert Quinn from AT&T echoed many of Arbogast’s concerns and warned that rate regulation will certainly begin this fall when the FCC looks at fiber and wholesale prices.
Although admitting that “the other side doesn’t always tell me” what actions the FCC plans to take next, FCC Commissioner Michael O’Rielly, predicted that the Commission will begin soliciting reports of violations of the rules and will attempt to enforce vague claims and expand authority. Ominously, O’Rielly warned “There has been a power grab” in the form of the right to regulate in the future.
David Redl from the House Commerce Committee Subcommittee on Communications and Technology, doesn’t see any movement in Congress regarding alternative network neutrality legislation until the second circuit court rules. He also warned that the FCC will indeed add privacy into their regulatory reach and will act on regulating personally identifiable information in addition to its current regulation of consumer proprietary network info.
The lone supporter on the panel of the Open Internet Order, Jonathan Baker from American University’s Washington College of Law, stated that the supporting analysis in the order is “infused with economics.” Baker explained that investment in edge providers leads to investment in infrastructure, and that the FCC was appropriately thinking about the core and edge as a whole. You can watch the entire (very entertaining) panel here.
The final panel of the day was “Whose Rules? Internet Regulations in a Global Economy,” moderated by Ambassador David Gross from Wiley Rein. FTC Commissioner Julie Brill focused on transatlantic issues. He warned that the EU’s new Digital Single Market strategy does not stem from protectionism for EU companies. She explained that there are deep-rooted cultural and legal differences between the US and the EU that effect how each look at the gig economy. Andrea Glorioso from the Delegation of the European Union to the USA also addressed the Digital single market strategy. He explained that antitrust investigations in the EU concerning the tech industry have mostly been toward US companies, but that’s because they are so successful. In other sectors, EU companies are investigated much more that US companies.
He took issue with the idea that the EU and the US have deep-rooted difference, stating that “we have so much more in common than we each do with other countries” and therefore much work together.
Adam Kovacevich from Google reflected on the past vision that the internet would be the “leveler” of government policy. This, he explained, was disproven, as illustrated by the strong incentive to have local policy reflect local norms. Kevin Martin from Facebook identified the importance of regulatory regimes for expanding infrastructure for internet access for areas that currently do not have it. He urged policymakers to not lose sight of the broader goal of connectivity. Peter Davidson from Verizon agreed that tax and regulatory policies should be viewed through the lens of connecting people. He identified digital protectionism as a concern and urged principles and norms for cross-border data flows to be included in trade agreements to encourage investment. Video of the discussion will be up on the TPI YouTube page.
There much more to come soon, including the a wrap-up of the IP themed luncheon discussion and tonight’s dinner keynote by Kelly Merryman, Vice President of Content Partnerships for YouTube. Stay tuned.