Im randy may, president of the Free State Foundation and im pleased to welcome you to the Free State Foundations ninth annual Telecom Policy conference i want to extend an especially warm welcome to our cspan audience. Im going to selfconfessed, i may cspan junkie. Some of you may have heard me say that before. My mom may she rest in peace she always worried a told her that i was a cspan junkie never really knowing what i meant by that. Im always pleased and grateful when cspan is here. Welcome, to the cspan audience. This years annual Conference Follows on the heels of the 10th Anniversary Gala last december, so next year annual conference will be in double digits for this event, also. It confirms the old adage that time flies when youre having fun and i might add it when you busy as well. Almost every year i say some of you know this i say our annual Telecom Policy conference just keeps getting bigger, better and more impactful. Well, as long as it remains true im going to keep saying it. Even though we had to reschedule this years conference because our first date march 14, happened to be the only snow day this winter in washington, i think this years conference upholds the tradition with a quick glance at the program showing why the conference is a must attend event for anyone interested in communications, internet and high tech law and policy. I know you will agree that we have an Outstanding Group of speakers and program sessions. The program that you have here, its also on our website. If you need another copy or want to download it near the top of our home page. The theme for this years conference is a new direction for communication policy, less regulation, more investment and innovation. With a new fcc and a new congress in place the opportunity is right for charting a free market oriented direction for communications, law and policy. As most of you know, at the fcc under the leadership of new chairman who will be with us for our lunch session today the agency is already charting a new free market oriented direction. We will be spending a lot of time today talking about the implications of this new course. Including, what it means for innovation and investment, but most importantly what it means for our nations consumers. I have a hunch that at one time or another today the subject of the fccs new Net Neutrality proceeding or open internet proceeding as the previous fcc chairman preferred or restoring freedom is the current fcc chairman prefers, in any event that proceeding by whatever name you want to call it im sure will come up and it should because its been important proceeding for the fcc. Aside from the conversation that im going to have with sec chairman pai at lunchtime we have a stellar lineup for todays program. A the First Program will feature howard sharansky and boyden gray , here. Again i have in your program the titles and bios we are going to follow this session with an allstar panel lineup and then immediately following the Panel Session we will break a short time for a very nice buffet lunch. I guarantee you it will be nice, but i hope most of you are here for the program and not just for the lunch. Then, we will have a conversation with chairman pai and then we are honored to have the two acting directors of the federal trade commission with us for the after lunch session. Tadd lipsky and todd paul will tom paul will be featured at that session and winding up Michelle Connelly who is a professor at Duke University and a member of Free State Foundations board of academic advisors will offer some final thoughts. Now, remember to tweet if you are tweeter. The handle, i think we have the twitter handle on each table, fsfconf9, which shall call to mind the conference nine. Before we get started i went to take a second to acknowledge and thank some of our Staff Members that are here. Kathy baker is our Events Coordinator and communications quarter nader and associate has a awful lot to do with this event and we appreciate her. Lets give a round of applause if we can. [applause]. Then, i went to acknowledge the scholarly work by two of our Staff Members that are here and their contribution. Senior fellow seth cooper. Seth will moderate the program after lunch and Research Fellow mike corney, their contribution to our work at the Free State Foundation is very very important and then finally, i want to introduce to you our newest senior fellow ted bullinger. Ted joined us and midmarch. Ted is a phd economist and a lawyer. Really combines the law and economic expertise, so ted, if you could please stand up so people will see who you are. [applause]. Thanks to all of them and finally, i just want to thank as i often do, but sometimes forget to do, my wife lori. She actually does an awful lot of work for the Free State Foundation that goes unrecognized with behindthescenes work and when i say that im not even referring to what she does tolerating without too much grumbling the often insane hours that i put in early for the Free State Foundation, so i appreciate everything that lori does and maybe you could think thank her with me. [applause] that, lets get started with our first session and im just going to introduce our speakers first. With their indulgence and yours to i will hit some highlights that are in their bios and i refer you to the more complete bios in the brochure. Our initial speaker and really keynote for the day is howard sharansky. Howard is a professor of law in Georgetown University law school and a partner as well. Importantly for purposes today the former administrator in president Obamas Administration of the office of information and regulatory affairs, which is within the office of management and budgets rent deposition referred to as the regulatory czar. Im not sure if howard likes that or not, but that is the fact. Howard again, just briefly he is a former director of the bureau of economics and he is he also serves previously as chief economist of the fcc from 1999 to 2000 and a senior economist for the president s council of economic advisers during president clintons administration, so again and howard as well as ted have degrees in a phd in economics and also a law degree. By the way, im not sure i mentioned it, but the topic of this session and you will see how howard in the next speaker will introduce had that experience expertise to to talk about is Lessons Learned improving regulation and government administration, so its hard to find someone more qualified. Along with boyden gray. Boyden grays a Founding Partner boyden gray and associates, a former u. S. Ambassador to the European Union is a former white House Counsel and although very pertinent to our program today he was counsel back in the first Bush Administration, George Hw Bush to the president , h. W. Bush to the president , president ial task force on regulatory relief for which he wrote the original executive order, 12291. We dont want to get hung up on numbers here. He can fill us in on what that was. Someone told me once when i had another ambassador on our program. We had a few that once you are ambassador that that title never leaves you and you are always ambassador so, if i forget a longtime friend of mine and if i forget, i ask your indulgence with that. Another thing i want to say before we get started is he left off of his resume, its left off of the official bio probably the most important of what i can get the most important position that he held during his illustrious career is a former chair of the section of Administrative Law and regulatory practice of the aba. That might not strike you as being as important as ambassador to the eu, but i am a former chair of that section as well. So, i consider that to be important and boyd, when i was serving my year just a oneyear deal. When i was serving my year as head of the section Administrative Law i was asked whether i wanted could be ambassador at that time and because i had that other job i had to decline that, but i wasnt able to do it. But, anyway, now you know about his other position. With that introduction i will turn it over to howard to get us started and then we will get reaction. Thank you, randy. Its an honor to be hereunto sherrie podium with podium with you and with boyd who is really in some way just the founder of regulatory review and Regulatory Reform and as someone anyone who has worked in my position has served people who are founders and foundational thinkers in the area and boyden is one of them. What i want to talk about today is regulatory process and Regulatory Reform and i think there are some Lessons Learned at least that i learned over the last four years of the Obama Administration doing regulatory review about the heart of regulation, what works and what doesnt and why we need to be careful when we embark upon a series of fixes through legislation or other kinds of means because there are some very good things in our regulatory system. There are things that could use fixing, but fixing them is hard and we will want to proceed carefully and i think that is important to get across right now that there is i think a lot of fairly radical rethinking of the federal governments regulatory program. I tend to think radical rethinkings are good things because they stir things up and get people thinking, but as long as people think with a cool head and are willing to acknowledge that some stuff they may take our wrong, back up and try different path and also so we dont rush too quickly into legislation that locks as into what is inferior regulatory system. So, i would start with the premise that the us has probably that the u. S. Has probably the best most transparent and most Accounting System of regulatory process in the world. One of the jobs i had as administrator was to go around the world often with our ambassador, our ustr, i had mike froman and to negotiate with foreign governments or entities on Regulatory Reform issues, regulatory harmonization and one of the things that made that difficult was many places regulation happens completely out of a black box. There is some kind of summary of a rule or some kind of description of an intent to regulate, some kind of pulmonary report of the effects of the rule and then a boom regulation pops out in some backroom and there are very few bases in which one can actually challenge that ruling get it we thought. Get it rethought. Compare that to what we have under the administrative procedure act. There are a few exceptions, but by and large an agency has to issue a proposal, that proposed rule has to go out for Public Notice and comment. That agency that has to issue a final rule built upon the record that includes that notice and comment in Response Agency makes to those comments and at the end of it all the agency is subject to judicial review. This works fairly well, lots of rules get challenged in court. Lots of rules get remanded or struck down. Sure, that is a costly process, but if you think of the and symptoms incentives for agencies to do a good job in rulemaking, one can see its not a bad system. The public is involved early on and the public has a chance to call the agency to account at the end. That is rare. Not only that what the public gets to comment on is the rule. What the public gets to see in support of the rule is the Regulatory Impact analysis, not a white paper describing what some people think that affects might be, but the analysis and things that can get challenged and brought before a court. One wants to think twice before one backs up fundamentally changes the system that actually has even if not perfect or costless a pretty good system of transparency and accountability built into it. Its a very rare kind of thing. Lets me back up and talk about the things that i think are Lessons Learned and lessons things we need to fix it regulation and what we might do to come up with an even bigger and even better regulatory system going forward. What is the job of a regulator or Regulatory Review Office . I throw that in because that was my job. So the is to identify a real first problem. This may sound like an obvious statement, but its not always the case of regulations that agencies issue addressing problems that are genuine, that is to say occurring or very likely to occur. Sometimes one sees regulation that is well meant to get ahead of a problem to stop it before it starts, but without sufficient grounding to be sure the problem is actually going to occur. That is a very Weak Foundation on which to do regulation because then the benefits, which i will talk about in a minute are always a difficult thing to make and to prove become even harder because not only are the benefits harder to examine because they are in the future, they are hardly contingent on the problem even occurring and its hard to make a good case for regulation and hard to make a case to the parties that must bear the cost of the regulation when the regulation to begin with is the benefits of the regulation are contingent on a problem actually occurring, so identifying a real problem in having a convincing case this is a problem society should solve is the first issue. I will start by saying i think sometimes there is insufficient attention to making that case. Agencies could do a better job making that case. Is not typically what agencies are set up to do. They look at statutory authorization, to a mandate from congress or petition from the public or some event that has happened and they respond. The communications aspect of explaining what they are doing and why they are doing it is not always done very well. Sometimes thats because its a hard case to make. Well, thats all the more Reason Agency should have to get out there and make the case. If its a hard case to make then maybe its not a real problem or that the problem is one that is too costly to solve, so identifying the rule and communicating and making that case convincingly is the first step in rulemaking. The next step is to identify potential Effective Solutions to that problem and i Say Solutions because again, another shortcoming that i find even within our overall quite could quite good regulatory system is agencies tend to move quickly towards a solution to a problem. Thats not always the case by any stretch of the imagination. One of the things i found as administrator was that many proposed rules on very significant issues came into the Office Without much examination or regulatory alternative beyond the proposal of the agency. Regulatory alternatives are important, discussing them and even analyzing them in a quite rigorous way because they show the public when the rule goes out for notice and comment what else might be a possible approach. What are the other things the agency thought about and rejected or at least became less convinced for appropriate solutions to the problem. There are a number of reasons one wants to do that could different alternatives will have different costbenefit profiles. Different alternatives will elicit different data and, from the public and actually the edges who may find out something that they inside their sort of close circle of people working on the rule, they may find this information that can convince them they made them mistaken pursuit alternatives. Identifying potential Effective Solutions for that problem and even if the Agency Proposes one of those two nonetheless be one of those, to nonetheless be transparent in discussing and explaining what alternatives there might be. This is in the executive orders that govern regulatory review in the executive branch. They had been there i can throw out a lot of numbers. Executive order 13610, all great executive orders that actually since president reagan every administration regardless of Political Party has seen fit to reiterate and a strengthened on very similar principles of regulatory review. So, alternatives are big one. Now, the third thing im about to identify here is probably in some sense the most controversial. That is determined that the proposed solution and indeed any alternatives that might be discussed and offered up as possible proposals are possible rules down the road, proposed solutions that problems should not impose costs that outweigh the benefits of solving the problem. Now, that sounds obvious. Why would we undertake a rule that is more costly than the benefits it brings, but this is extremely fraught exercise. The executive orders do not say and i think they are right not to say that the quantified benefits of a rule must exceed the quantified cost of the rule and i think one of the biggest mistakes that can be made in Regulatory Reform would be to issue a mandate that says no rule shall be issued in the quantified benefit that this not offset its quantified cost. That would be a disaster for a number of reasons. First of all, there are rules that this society chooses to put in place that have non quantifiable benefit, distributional objectives, fairness objectives. Objectives of social inclusiveness. One may agree or disagree politically with those objectives, but if they are disclosed, if they are well achieved by the rule and if the rules as part of the reason we are going to achieve these costs is a so that same sex families in the military can have access to base housing and feel more included and be better soldiers, well how do you put a dollar value on that . Pretty darn hard to do so. It is a daily. Interest it is a dignitary interests. Not a quantifiable benefit unless you really stretch into a not very qualify book you would not be able to have that role if you had a rigid quantified benefits outweighed quantified cost rule, so the executive orders talk about benefits that justify the cost of a rule. That is squishy, i will admit it , but i think it is important to be a bit squishy because i can get allows a society to make decisions that it will have regulation and benefits that are not easily quantifiable or actually costs society something because we has a society want to pay for those things. That said, i do think its important that the public know very clearly what it is paying to get those kinds of benefits, so the disclosure of costs, all costs that can be quantified or that can be identified even if not well quantified that are going to be occurred incurred in the pursuit of those benefits as a matter of democratic process have to be put out there clearly and transparent. Agencies hate to disclose costs and they love to tout benefits. One of the jobs of the Regulatory Review Office is to write that balance now, i think we will actually see some interesting things happen under some of president trumps executive orders. If one has to repeal to rules to issue a new rule, something that is at least aspirational he sought in one of the president s executive orders and would be quite hard to do we will see the agencies flipping on costs and benefits as they come forward urging repeal of certain rules. To repeal a rule you have to make a rule. You have to make a real make a rule repealing the old rule under the administrative procedure act you can just say nevermind theyre not doing that anymore. Once that rule is out there and published, it is a changed in regulatory policy and to repeal it you have to do it on a full apa process disclosed on their record. That means you have to explain why your previous record was wrong and why facts and evidence today suggest repealing the rule. The things that were the benefits of the rule originally passed, are now going to be the cost of repeal and one saw this highlighted very well in an Interesting Exchange on fox news between Chris Wallace and epa administrator scott pruitt administrator pruitt talked about repealing a bunch of Greenhouse Gas emission rules. Chris wallace said what are you going to do about the cases of 90,000 asthma that those rules are preventing . Agencies are going to come rules weresay old not so beneficial and they were costly, the opposite of what agencies really do. What one needs is a truth teller. Even within our very good system, there are incentives for agencies to bias cost and benefits in the direction it is going to achieve the policy they want to achieve. An independent review office is. Mportant the office we have in place does a very good job. The ability of courts to review the record is another backstop. How much father would one want to go in imposing costbenefit requirements or mandatory layers of reviewable review of those is i think a hard question i worry a little bit about some Regulatory Reform efforts that say make reviews mandatory to the agency in every case with costbenefit analysis and make those reviews judicially reviewable. If we were going to do that, we would get collision between oira and the agencies from the beginning. Not to make better rules, but the ruthless judgment proof as possible. One wants a separation between the radio between the radio tour of the wealthiest in the agencies thats going to argue back and forth and call out the agency for the problems that mistakes it makes. Anything that would make any of those communications admitted the rule should be overturned will eliminate those communications and i think, i fear put the review office into more of a collusive posture. Again, another area where one want to be very careful about reforming regulatory review. I just want to come back and talk about costbenefit and return to a couple examples to highlight some of the challenges we face in regulation. The political dynamics of regulation are always difficult because inherently the political economy of regulation is. Is unbalanced. Costs tend to fall in fairly narrowly defined set of cards. They tend to be relatively shortterm in their occurrence, relatively measurable. So anytime theres a rule, the people that have to pay for that rule, they know they have to pay for it. They have a good idea of what they have to pay and theyre often not the parties who will directly receive benefits. Thats not actually a problem. The party that is causing the cause should pay for them whether they get the benefits are not. You impose a burden on society, you should pay to fix it. Basic economics. That is actually not the most common situation in the world. Often the parties have to fix a problem or fixing a problem or social in nature or where they are simply the cost of wood or even if they are not the cost calls causer. It is a harder case anyone needs to think a little bit more broadly about justifying the cost. The point is, theres always a strong and vocal and organized constituent need to impose the costs. Now think about benefits. Benefits could be more speculative or probabilistic, farther in the future and much more diffuse. If youre a coal mine and you are told to reduce the coal dust in the atmosphere, you know immediately what is going to cost you to do that. If youre a coal miner and i got my sound good, but you dont know if youre ever going to get black lung disease. If you get it, it is 30 years down the road. Your employer is telling you my costs are going up. Im going to have to trim some benefits or trends and jobs. Benefits cited that is a lot less salient. If we were to leave regulation to open politics, rules wouldnt happen. Response to emergencies or true crises. The result is with the political dynamic of strong public advocacy groups on one side seen failure to regulate is a disaster and advocates for the parties that bear the cost say you know, regulation of the disaster because its going to kill jobs and growing investment. And ruin investment. The truth is somewhere in between. Regulation is not a game of extremes. It is a game of tradeoffs. Its an enterprise of analyzing how we solve problems in ways that best balance the costs and benefits. The parties need to acknowledge that there are benefits and work to find a better way to achieve them. The parties they get the benefits and advocate for them need to understand there are costs and you cannot ignore the consequences of imposing costs and work for more efficient in incremental ways of achieving regulation. Right now that is not the political dynamic but that is the dynamic of the agencies. Agencies need to be left to do the careful balancing and incrementalism in the transparent accountable system that is the administrative future act. One concern i have about one of the biggest proposals for Regulatory Reform out there as you will interfere with the process fundamentally. Agencies need to build a record, not have the record challenged midstream, but wait until it is completely built. Wait until a final rule is issued on a complete record and then the rule can be challenged in court. There are proposals to have interim records part of a proposed rule chargeable in court. That prevents the agency from perfect in the record. I use perfect gene endquotes. Doing the better job based on the feedback it gets back from the Public Comment process. It allows challenges at an early stage. The way the agencies can avoid these unbalanced political dynamics and actually solve real problems is to have the opportunity to build a full record in now way it will come to a court to decide if theyre really evidence benefits . Is there really evidence the benefits justify the cost . Has the agency done a good job of the costbenefit side to make a determination based on the evidentiary record based on the analysis. If we leave it to the political round, we run into significant problems and much lower quality rulemaking. I want to return to to the sound regulation. The identification of real problems in the identification of really workable solutions. I think agencies get off on the wrong foot in the whole process but i think makes the apa work well falters when there are rules that are generated because of a belief or a big movement that claims there is a problem to be solved without real evidence of the problem truly exists. In 2007 i wrote an article. It was called Something Like network neutrality, regulating with more questions than answers. I went through sort of both sides multiple sides of the Net Neutrality debate. Each side could be right depending on the answers of some very hard questions. Questions about investment incentives. Questions about the marginal value of different investments. Questions about the true economic incentives different parties have to discriminate or not discriminate. I tried to make the case that those questions were not well answered. I wrote the article because i was perplexed by incredibly adamant arguments that we had to have a regulation now, today, yesterday to stop all this horrible stuff that wasnt yet happening. I think it is important as the fcc goes forward in reexamining rules that were issued in the last administration to look carefully at what questions we have the answers to, what questions we dont have the answers to. And not to be afraid to deregulate where mistakes were made, but also not to be afraid to stick with regulation for the evidence shows it would not hurt investment and would achieve some good. I think thats why i started out by saying in a radical shift in direction can be a healthy thing from time to time. It can change perspective, get people to think differently, reexamine things love them on reexamine things that have been long assumed. Things that have been long assumed. One cannot blindly in one direction regulate come to deregulate. Its got to be appeared fundamentally every analysis and reexamination. It is my hope that is what will happen as the Commission Goes forward. One final note. Often the actions of agencies are pilloried in the public. This is tough, but i would urge agencies to stay the course. I thought it was interesting that most newspapers, not all, but most came up adamantly against the repeal by congress of the privacy regulations the fcc put in place. Insufficiently covered in my view was the fact this is really a question of comparative institutional competence and a restoration of the privacy function to the agency with much broader jurisdiction over that and much more experience. The federal trade commission. It wasnt leaving the space unregulated. It was leaving the structure. That message didnt get out there very well. I commend chairman pai and Sherman Austin for their excellent editorial on the issue. I would urge all agencies as they go forward in regulating for deregulating to adopt a similar posture. Do what is right. Do a careful examination of a rigorous record would show to be correct and dont worry about the noise from the outside. Thank you. [applause] thank you very much, howard. That was a very stimulating, important address to lead off the conference and now we will hear from ambassador gray. And then after ambassador grays remarks, hopefully well have time for a few questions from the audience. I always like to do that when we have time. Ambassador gray. Mr. Gray thank you very much. A preliminary matter. I want to take it very clear how are done a good job of maintaining the credibility which is absolutely essential to keep it close monitoring on the value and utility and importance and need, especially the need for regulatory activities. There certainly obviously temptations, pressures to relax. Howard never did it. Oira as strong as it used to be with the budget, but in good hands and in good shape. Make things to you, howard for doing it. The accommodation for maintaining a very strong tradition. I want to say at the outset i really sad that you didnt take that job. I will tell you one of the best benefits of it as i live in a residence that had been built or renovated by a Russian Oligarch who was so disfavored in russia that he thought he would flip out his ears if he could indulge him, russia where he was being pursued. And so, he did this marvelous residence. He was so bad that the belgians would give him the visa. When i was introduced to it, i had these local intelligent authors, experts tell me that this was the safest residence in the entire European Union system. You know, the radical file that lived was responsible. Estimate clear so an urban myth doesnt get started. That was only a joke but now i know about the russian connection, if it were true and if i had been offered the job, im glad to know what was just related. You dont know yet. [laughter] gray the Intelligence Experts said i had the highest equipment, triple mylar windows, but the centerpiece of my safety were a huge fix. Six inch doors protecting my bedroom. Just think of what you missed. These were known known as fourth century doors. I didnt have enough courage to ask for at least one briefing. What on earth is a fourth century door . You might wonder what it is. It is backdoor which in order to have a half an hour under attack could withstand anything that could be thrown at it in the fourth century. [laughter] mr. Gray a very useful thing. I used to tell the story because i had to give lots of speeches at the dinner when people had too much to drink and didnt want to get into the intricacies of Net Neutrality or whatever it was. My Communication Specialist came up to me and said you must stop talking about the fourth century door because its going to theres no such thing. Ed but been twice brief they are wrong. What do i have . Would you have is not a fourth century door, but they forced entry door. [laughter] mr. Gray so you can see how its so easy to get mixed up. Sometimes, i dont want to argue about the quantifiable cost. It is very important to get a good handle as you possibly can on what is actually going on with the rule that is about to be implemented. Facts are very important. So i understand, it is very real problem is very important. I commend our speaker for looking at that. I dont have much time, so im just going to go off into a little bit of a tangent. The identification of a problem is where he started and it really is key. Often, agencies will just take flight and they will take the infamous infamous or famous chevron doctrine. Any hint of ambiguity in the statute is authority to just go fly off into the sunset and sometimes the problems just dont exist at all. Honestly at the end of his life and one of his last decisions in a famous case, the case involving epa Climate Change and tailoring. Im saying this knowing that the president has apparently just pulled out of the paris accords. The harms the epa was arguing, just plain didnt exist and the statute and talks in terms of big, big installations creating big, big pollution emissions and this is not a co2 kind of thing. Co2 could come out of the house. Out of an office building. You cant cover everything. The statute talks with a 200ton emissions limits. Epa says that doesnt make any sense. But the statute actually meant was 100,000 tons. That is where we are going to start going to tailor the statute to fit what we think is the problem. At one point, one of the cases said maybe you have to make the jump from 200 tons to 100,000 tons, you may have taken the wrong route in figuring out whether its a real problem. There wasnt really a problem in my opinion. We are not going to sit idly by on the dock and wave goodbye to you. As it embarks on his voyage of discovery. We are not going to sit idly by on the dock and wave goodbye at apa as it waves goodbye the Net Neutrality rule, which was affirmed as you all know. Which on bank and bob was powerful enough from judge brown and judge kavanaugh. They were powerful enough that opinion by table if you want to know the current thinking, assuming the hard work and figuring out the costs and benefits and whatnot have been done. If you want to look at the big picture, i would commend that you all read these three opinions. Trying to rebut or rebutting, Jess Rogers Brown steals a line mimicking she does say we are not going to the fcc and to let its Wander Around in the sunset. This is part of the problem. Agencies can take off in full under the way chevron artworks and that is where some of the most reformoriented efforts are being pointed. It is the courts that i think are going to do this first. Are watchingourts this very carefully and i think this and the new and the chevron doctrine. I think that what is going to happen is the courts are going agencies back and say you cannot do this. There is no call for any procedure to action. You have not identified a real problem, you have thrown up your hands and said go regulate and that is not enough. We have nothing to review on. Not apply when you have a big issue like Net Neutrality. Thee going to decide what law is and we decide that maybe vagueaw is today to and openended. Youre going to have to start again. I dont know we will see cases thrown out like schechter in 1937 but if think we will see a lot narrowing the statues to the will make congress more precise. I will end with the question. I did a lot of legislative work from a first came to washington and some of these markup sessions were really good drama. Good entertainment. I asked audiences how many people have ever heard an amendment to the third degree. Are any hands going up . Maybe one there in the back. That is discouraging in a way. How many people have been to a markup session . More hands but not very many. You would think most hands have gone up. Problem, we need more market sessions and more of them to a third degree. Thank you very much for the opportunity to speak. [applause] if you are like me you are probably thinking maybe we could just have the rest of the day with the session with these two. Unfortunately we are not going to be able to do that but we do have a little more time. When i give that introduction of ambassador gray, i did not mention that he has his degree from the university of North Carolina. I think he was editor and chief there. Me wellof you who know and have heard me say a previous conferences, i have two degrees from Duke University. Only someone that is exceptional like Investment Grade that went to the university of North Carolina would ever appear on one of my programs. That was terrific. I want to ask a question. No one touched on this among the audience here it is a topic that everyone is familiar with and i think your reaction would be useful. Airmain pih ch introduced a new practice at the fcc. He has decided it will be permanent. Releasesice is he order orders at the same time he circulates in to his three weeks before the sunshine meeting. Issue came to a head and first came up during the last round of Net Neutrality proceedings when Many Congress people and others were asking to see the order. It was considered at the time and maybe light many to be fairly controversial because it had not been done. Now it has been done. I will ask him about it during our lunch conversation and probe a bit. Muchwo have had so experience, what is your way ofn to this new doing business at the fcc in terms of making public these rulemaking proposals . Someone go first. If you wish. I think we have to see how it pans out. There are possible close and cons. Possible pros and a draft order that comes out of the Chairmans Office that other commissioners have not had a chance to weigh in on or perhaps only a subsidence have been able to weigh in on. There is a potentially problematic aspect that brings the public in at an early preliminary stage for the commission has done its internal process. Hand, ithink, on one transparency,as on the other hand it can really interfere with dialogue among the commissioners and their releasing regulation that speaks for all of the commission in a more balanced way. Itre is the possibility that can be a strategic play to limit the input of other commissioners on a controversial issue. Certainly i fought tooth and nail against opening up all of rockiscussions that white they were having with all the drafts for the same reason. We need the ability to tell the agency you are wrong, ask hard questions, and then put a draft to the public that has gone through the internal deliberation. I can see positive things but i think we have to wait and see how it works out. Do you have any reaction at all . This may not be exactly on internal delivered a process is very important, having been involved in it many times. Im partial to it as an outsider. If it does wonder not shield agencies from the kind of transparency that howard is talking about. There is a balancing act that goes on and it is a tricky one. It is going to continue to be a tricky one probably for a very long time. Question ask one more and then we may have time for one or two from the are audience. Ityou may know, the fcc when released its notice of proposal rulemaking of this rottenness neutrality, it specifically is asking for a costbenefit analysis. The of you know, independent agencies are not required by the executive orders if i still understand this, but it is something that the fcc is doing and many people have recommended that the agency to for the reasons that you talked about. How common is that . Among other independent agencies, to take what will be a fairly formal costbenefit analysis by the fcc in your experience . It has been a mixed bag. Even sometimes the same agency will sometimes do it and sometimes not. For example, in the case of the cfp v. Already all agencies should have to do this. Sen. Portman tells me i am the him and want to take this position. I dont think the independent agencies should be under a wider view revealed. They should undertake the costbenefit analysis that the executive order requires because otherwise i think the public does not have the information and record it needs to comment on the rules. For all those standing back there, there are scattered sheets that it is fantastic to there areuge crowd to seats upfront, even if they have a sign that says reserved you can occupy them now. That will be fine for now. What i want to do maybe is take one or two questions from the audience. I want you to raise your hand if you have a question and i will recognize you and wait for the microphone to be brought to you and lets keep the questions sustained. Thanks very much. Question for howard. He never of studies shows there has been great growth in guidance documents and informal sources of clause i rulemaking which do not fall under terms of executive orders. That is raised concerns that bute of race a real problem costbenefit analysis. These are things that are not seen. What doest change . That change . I think as a general matter it would not be practical for an office like that to review all guidance documents. When they are done right are interpretive. They are nonbinding. They do not create new regulatory allegations. To review every single one of them in advance to determine whether they violate those boundaries would just be an enormous amount of work and how will we not an efficient use of resources. Hand, agencies do on occasion overstep and try to regulate. Most of the time they are called out on this. They are told they cannot do that. Is somere has to be kind of rule that basically says that a guidance document cannot have effect if it has not gone through a certain process andrnally at the agency been posted in a way that is transparent with the next donation with how it relates to the underlying rule. Agencies could not come up and say our document over here means you cannot store those chemicals in this way a more. We used to say you could, but now you cannot. That is a change in regulatory policy. By having a public posting requirements and explanation requirement and maybe even a Public Consultation requirement for significant guidance is, a lot of the problems can be resolved. There is a terrific Bush Administration document, a 2007 document look record which is a guidance on guidance. It toually recirculated agencies and said this really matters. I think that is something that could perhaps be embedded in the to make the requirements even stronger. On the issue of documents, do you have anything you want to add . I think this will be the last, so if there is anything you want to add, priests go ahead. Please go ahead. I think for the ones that really have impact you will hear about them and you will know my ending, it the fact that it is shielded. Youre not even supposed to look at anything they do. Allay, they are free of constraints and accountability and transparency. Their funding comes from the fed. Congress has no power. He does have to testify occasionally and a heated testify and he spent several hundred Million Dollars on the renovation of their headquarters these subcommittee chairman said it to him, who was in charge of this lavish renovation . Wasresponse to congress what does it matter to you . Me athink what matters to this moment is that it think you will agree it would be it would have been difficult to people with more experience and background and scholarly assistant experience in the area of regulation to talk about Lessons Learned. Please join me in thanking them both. [applause] what we are going to do now, i am going to ask the panel to come up for the next program and. Et situated i do not expect that to take more than a couple of minutes. Then we will resume. We are going to get started again. If i can hev