Transcripts For CSPAN2 Communicators With Mark Jamison 20170

Transition team focusing on telecommunication and the federal communications condition. Dr. Jamison, welcome to the communicators. Guest thank you. Host i noted you were head of the National Association of regulatory Utility Commission. What does a regulatory Utility Commission do . Guest well, just a small correction. I was the chair of a commit awithin the National Association of regulatory commissioners within it was a subcommittee actually. Not even a full committee. But what a public Utility Commissioner does in the United States for example and this transfers around the world is they regulate utility. It is the things like setting what the Service Quality standards will be, what the prices will be. Those are the biggest jobs of some countries. It is folks on the infrastructure rollout and development. In some instances it is determined how markets will work. That is basically the job of the utility regulator. That is its formal job. What i also found and i train a lot of people around the world in this i tell them your biggest job is to regulate the politicians because this is a time when utility were regulated directly by legislative bodies and by city council and that system never worked well. It failed, people went out of business, investments would not be made. So a hundred years ago we setup agencies called independent commissions to be a buffer between the political pressure and need for investments that take 2030 years planning. Host when it comes to a public Utility Commission they could regulate cable, telephone, water or electric . Guest not really cable but the other three. Telecommunications is very rare. Host is it state by state . Guest yes. Host what was your role on the president ial Transition Team . Guest my job was to work with the Transition Team and federal Communication Commission to help figure out what kinds of policies and what kinds of directions there might be for the fcc. That was different than a lot of landing teams work because the fcc is an independent agency. The president cant say whatever he or she might want to say but you still need a majority vote on the commission for something to happen. Host in a sentence or two, how would you describe your telecommunication philosophy . Guest the customers are in charge. Everything i do when i talk about regulations, when i teach about it, is how can you put power in the customers hands so than drive the market. Host to help us look at the issues facing the telecommunication world is David Shepherd who covers telecom for reuters. Hi. Commissioner chairman pai has proposed reverseing it decision but left a couple questions unanswered. One; does the fcc have authority to regulate conduct by the isps . If it does, should it . Should it pertain the existing protections . Where do you come down and where should the fcc go from here . Guest you packed a lot into that question. One thing you said up front that was important is you said a decision by the obama administration. That needed to be a decision by the federal Communication Commission itself. There was a lot of political pressure and that drove part of that decision and that is a challenge for us. I am not a lawyer so some of the legal aspects of your question i cant really address. My understanding from talking with experts in that field is it does have Legal Authority to do regulations but exactly where in the law it find that authority is what it is issues. There are some areas where it can have a light handed touch regulation and other places where it can be heavy handed. What the fcc chose was to chose the heavy handed part we call title two which was written for common carriers that were common utilities. The laws were designed that would exist for forever but it didnt. What event do you think consumers need in broadbrand to make sure there is not blocking of their internet site . Guest a couple things there. One is it understand the World Wide Web has existed for over 20 years. Everything that has been since 2015 is new. So if people were happy with whatever blocking they were getting before that is all that might happen if we were to lift those title two regulations. It would be like things were before. With respect to what it is that people might be afraid of blocking there has been very few instances of blocking. We have seeing where the Internet Service provider is giving options. We can give you a lower price if you let us slow down the traffic when it is congestied. With respect to the fast lanes, the paid priorization that could make customers better off. I did a review for other economics and it is hard to find scenario under which that hurts customers. Generally it helps them. You wrote about whether you think Tech Companies could be to go big and you dont think so. It is said as small number of companies are increasingly responsible from everything we do on the internet is there a role for the federal government to ensure these companies do not use their market dominance to prevent new entrance into the market and to ensure consumers have options. Certainly. That is what the laws are there for. They are there to stop foreclosure and keep Something Else from competing with them. That has been around for a long time. I find people are more talking about amazon is huge. Or google is just huge. Or facebook is just huge. And the size seems to concern them. But especially in the Technology Industry it is you and me making decisions every day. Several times a day that makes those companies as large as they are. It is hard to fathom a scenario where you could tell customers well i know you really like to buy that item from amazon but we will force you to go someplace else. Or to tell a customer when they enter google. Com to do a search we redirect them to bing or someplace else. That doesnt make customers better. These types of companies are as large as they are because of the choices of the customers. Host isnt broadband and i would love to hear your definition of broadband but isnt socalled broadband as important as electricity or a telephone or water in a sense almost to our lives . Guest that is up to customers. The definition of broadband i dont have one. That is for customers to decide and something i have written about. A lot of people do think about should broadband be 25 megabits or some other speed. Customers are making these choices and telling us what they prefer so i would assume regulations follow the customer in terms of what is broadband. Is it essential . That is for customers to decide. Whether or not it is essential doesnt change the regulations. Oxygen and food are essential. A lot of things are essential were every day life and we dont impose a particular regulatory scheme on them like the Public Utilities just because of importance. What would be the downside of regulating the broadband arena as we would electricity or some other utility . One thing you get immediately is less investment. That is the nature of that particular talk. We saw evidence, we cant prove it but that is the case. Once you start limiting the opportunities for growth and change that you get less investment. What concerns me even more than that though is now instead of having a marketplace where people have to compete for customers at a customers attention now they have a regulatory advantage. Profits are made or loss in the regulatory arena rather than the market place. I think we should keep things in the marth marketplace. Host David Shepherd . The critics say if you look at the dynamics like the market control by facebook and google using more than two 3rds that tr are four major wireless kaechs that control 98 of the market. The u. S. Government has raised concerns or sought to break up to become too large. Do you think the marketplace is such that new entrance can enter the market as these Companies Get bigger and acquire larger marketshar market shares . Absolutely. The word i take issue is the word of control. There is nothing that puts google in control of you saying i will search with google. There is nothing that makes you purchase something on amazon. It is your choice that make s that network valuable and people decide they want to reach you and advertise on it. These companies dont control. They are just doing something customers like and that is a good thing. But in terms of thinking ability well, you know, should we break them up. You take the at t break up for example. That was a situation where the government said at t let me back up. The government thought it said at t you can be a monopoly. Turns out the government didnt really say that and that is why competition was made possible. At t abused that position. They did it against manufacturers and people trying to connect with the network but was because of the governments control. It wasnt the natural monopoly and could have been competitive if the government stayed out of telling at t you can be a monopoly. What is to prevent companies in a post title 2 world to discourage the ratings or taking more aggressive actions to ship the consumers to their property . Well, you will see it is not really there. At t was the dominance by the government. These are companies that earned their way by satisfying customers. But as far as being concerned about what they might do again, it goes back to we have antitrust laws that are there spickally for that. That if there is something this company does that harms con harms consumeers we are we have laws and procedures in place that can deal with that. Some people this can think of it as being discrimination is. Fewer ratings. There are services that are targeted to the poor, target today the disabled that use zero rating because that paying for dating is an obstacle to them getting the service. So it is not necessarily a bad thing. Going back to my research my colleagues in the economics field have done we found that there are sometimes an act like that with zero ratings and paid pri priortization is not always bad. That is where the antitrust steps in. It is to stop that those bad things. Do you think there are specific market failures where the fcc should be more aggressive in regulating . One of the historical situations is getting broadband and phone service to rural areas where the market doesnt deem it competitive. Is that a place or where do you think the fcc should be taking a more heavy hand . I think the fcc is making progress on the issue you identified. There are spots on the map where there is no broadband today. To do that, the fcc it is finally adopting some best practices that have been around for over 20 years. Started in latin america, now spread to europe and africa and a few other places and we are just now adopting it. We find places where there is no service and ask the question how much do you think it would cost to provide service there and what might be the revenue . The costs are way up there and the revenue down here. It looks like something you might want to subsidize but the question is how do you know how much that subsidy should be and who should get it and the fcc adopted the idea of the reverse auction that says we will start out at a million to serve this area. Who would do it for 900,000 and then 800,000 and bid it down to where it stops and that is how you decide who will provide the service but they are not excluded from having competition and how much the subsidy should be. That is the right way to do it. Host mark jamison, you wrote an article for the American Enterprise Institute Website Block Technology is outsmarting us at this hour. What is that looking at . Guest it was looking at the bake ideas of Net Neutrality and showing that now we have technological process that is by passing those ideas. Two ideas i address there. One is this idea that every pact that enters the internet or every bit that enters the internet should be treated the same. They should be no discrimination, no favorable treatment over a video versus voice versus anything else. And the other one is that customers should be allowed to go any place they want to on the internet as long as they are doing things that are legal. Technology is closing up both of those and addressing those already. Take, for example, what we call fifth generation wireless. 5g. It is a Tech Technology that will start rolling out next year and it will be in place for a decade. It has built into it slides and each slides it be customized to a particular service or customer or edge provider and it is designed to do that. That violates that idea of same treatment of it. So that throws Net Neutrality out. The technology is going to do Something Different than what the policy people that favor Net Neutrality say they would like. I talk about what i call the net Net Neutrality effect which isnt just Net Neutrality but a lot of large content providers are building or leasing their own networks. They custom design those networks and work very specifically very well. If you and i wanted to start a Video Service or other type of content service and compete we could not do that. We have to use the public internet which is not customized for us. So, these companies bypassing that public internet are making the whole issue by the same moot. The third thing i talked about was the app effect and this is about where customers can go. This is the nonblocking. A customer should not be blocked from going to some site that is legal. So flight a large amount of our traffic right is going over mobile phone. And mobile phones are driven largely through app as opposed to browser. The apps are designed. You go to yelp. You go to urban spoon or any of these different apps and they have places they will let you go and places they wont. And the customers love it. But it violates the idea customers should be able to go wherever they want. If you are using Net Neutrality at home mark jamisson it is coming you your wire that is connected to your house. Depending on where you are it is probably not going through the public internet. It is using internet technology. But Net Neutrality is connecting to what is called the head in of your Cable Company or your taco using a different technology. It is a direct connection they prioritized to themselves. Host with the slicing, is there discrimnitory basis to that rather than how it is currently is structured . Gues guest you might call it that but it is different. Take for example, if we were talking over the internet. First sending emails. The demands of those two types of services are very different. Our computers dont care. When the email is sent or arrived. They can come back and work with you. That works fine. They can come in in the wrong order and your computer will sort it out but for you and me to talk that cant happen. For us to talk the voice has to travel at a particular rate. Voice has a different command than email or any other kind of data. So that is what 5g is trying to address. It is slicing up the network so the things that really flourish under different treatment kgb treated better. You dont need a different regulatory environment. They have other challenge as they are trying to deal with. But as far as how data, voice and video should be treated the customers are saying i like when i am playing my games to have this connectivety and response time. When i am browsing the web, not so much. The technology is adapting to give the customers those kinds of service. A year ago the fight was over set top boxes and whether the fcc should give customers the right to scrap the box. That proposal died with the Previous Administration and people are finding ways around the boxes. Is that an example of where the market was moved beyond what the regulators were going to be . And do you think as more Television Watching shifts to our phones and away from traditional markets are we going to need a new regulatory paradigm . I dont think we need to shift our paradigm in this country so much. What you have describing is a situation where customers are engaging with conflict across multiple platforms. You may engage with 34 devices all while continuing this whatever it is you are doing. In the u. S. We treat those the same. You get outside the u. S. And people are struggling with that. I was in an asian country talking with their regular about that. Content over the internet escapes their legal mechanisms. We were talking with them and saying here is how the Technology Works and here is how customers are using it. Your approach if you want to control content is going to have to be fairly different. We where moving to a place where it will be traditional stations as you pick your own video shows to watch and networks to subscribe to. What do you think in terms of the growing consolidation and at t buying time warner and verizon acquiring yahoo. What is that going to mean for regulators . Are these multi headed Companies Going to pose a different regulatory challenge . Guest i dont think they necessarily pose a regulatory challenge but what they are telling us does. One thing i try to keep in mind is many years ago when aol and time warner were merging and there was concern that aol was going to take instant messenging and time warner would control the market. Within a year that didnt matter and in fact the merger didnt even work well. These companies are trying to tell us, well they are not trying to tell us but they are telling us whether they want to or not, the world is changing fast and they dont know where it is