He is an economist and also a senior fellow at the George Washington institute of public policy. Dr. Singer, in a recent paper that you coauthored, the curious absence of Economic Analysis at the federal communications position, an agency in search of a mission is the title, you write that the fcc is often an economicsfree zone. What do you mean by that . Guest what i mean theyre not taking economics into consideration making policy decisions. Theyre instead relying on noneconomic evidence, the popular whims and fancies of the day, to reach decisions that have tremendous economic import. Cspan has it always been that way . Guest it hasnt always been that way. That is what the paper is about. We chart ebb and flow of economic influence offer time. Weve been in periods like this before. This is not the first time that economics has been really gated to something well below the 8th floor, but we havent seen something in recent history as weve seen under the wheeler fcc. Cspan you write often decisions made unthe tom Wheeler Administration that are devoid of Economic Analysis. How did we get there . We posit one explanation in the paper. We think the fcc has largely lost its way in light of the authority or lack thereof that congress has given it, in particular the Telecommunications Act the last time it was revised was done really in the day before the internet. Was, on anyones, was on the top of anyones mind. And so there is not a the lot of guidance in the area of internet policy making. And, jerry and i posit that what the fcc needed to do in an effort to substitute for clear guidance was throw itself into the populist whims and to allow that to guide it instead. Cspan and in fact you write in your paper that when Economic Analysis is missing, special interests and advocacy groups gain power. Guest thats true. Something very disconcerting at least to this economist as an example, is in the open Internet Order of 2015. The fcc credited economics and i put that in quotes of public advocacy groups purporting to show that telcos increased their investment in the late 1990s because of classification as common carriers. Of course had that been subjected to serious Economic Analysis, an economist would say do we have test group or control group to see if that makes . We do. [. Cable carriers from not subject to regulation in the early 00s, their capital accumulation was faster than that of the telcos. There was a mistaken causal inference made by the fcc and we think that it wouldnt have happened if economists had a greater voice in the discussion. Cspan lets continue the discussion and bring lydia beyoud of bloomberg bna into this. Thank you. The fcc should be required to perform a cost benefit analysis before it engages in any rule making. Why do you think that is necessary . How is that different from what the fcc does now . Guest lets talk about what the fcc does now. When the fcc issued the open Internet Order it simultaneously issued a twopage letter to congress that disavowed any responsibility correctly for having to perform cost benefit analysis and i want to point out i have the luxury in participating in lots of economic debates in this town not just with the fcc, epa. Consumer financial protection administration, the department of labor and what im impressed by the degree of rigor and thoroughness in economic decision making. I commend people to go look but there are literally appendices where economists are estimating econometric models to come, as best they can to a true america sure of the costs and benefits of a proposed rule and nothing like that goes on at the fcc the question jerry and i put to the reader is, why should the fcc be subjected to a rest rigorous standard in fact theyre overseeing an industry, telecom, communications is arguably more important to the economy than these other agencies . So the Trump Transition Team has tapped three economists who are affiliated with the American Enterprise institute which is conservative free market think tank. In what direction do you think they might take the fcc in the time of transition . Guest we looked at, ive looked at their comments. Im familar with jeff ismac comments in particular. It is pretty clear they think about this the way the most traditional economists. Mark jamison and jeff are little more conservative than i am, but we all share the same common understanding that we have to america sure the benefits, we have to measure the costs. There is an important additional element that many noneconomists dont often pick up, even if youve come up with an intervention that generates net benefits, there is on obligation to look for other interventions that would generate even greater net benefits. And im confident that those two, and roslyn layton, will try to impose certain degree of discipline on the fcc that has been absent under the Wheeler Administration. Can you further define what you mean by intervention . Guest intervention would be a regulatory proposal that would intervene or prevent Market Forces from acting as they normally would. So mark jamison is fond of saying he doesnt want interventions, he doesnt want regulations or protections until, number one, a market failure is demonstrated. That is the market is doing something bad for consumers. Number two, that the proponents of an intervention can come up with an idea that would generate benefits for consumers that exceed the costs of imposing such regulations. Cspan so, hal singer, recently there was the comcastuniversal merger and right now theyre looking at an at ttime warner cable merger. How would an intervention or an Economic Analysis affect those . Right. So the inintervention that i would advocate there, is, some sort of casebycase adjudication of complaint that would be brought by rifle distributors seeking access to nearlybeingacquired time warner content. Similar protections were proposed in the comcastnbc order. I dont think anyone is advocating even proponents of merger, no interventions, no protections. We can certainly debate as to whether the merged entity, at ttime warner would have incentives to foreclose rival distributors from newly after quicked content, im speaking about hbo and cnn. The conversation will quickly turn how do we remedy, how do we protect against these sorts of abuses . The template that has been laid out of course are the protections that doj and the fcc jointly implemented in the comcastnbc merger. Cspan Net Neutrality is another issue that has been developed under the tom Wheeler Administration. How has been devoid of Economic Analysis or part of Economic Analysis . Guest right. In the 2010 open Internet Order under chairman janikowski the decision was made to not impose a strict ban on paid priority. Instead, paid priority was subjected to what is called expost or casebycase review. The rationale, the correct rationale is that certain arrangements of pay prioritization could be done for procompetitive reasons. Others could be done for anticompetitive reasons, economists whenever there is that kind of ambiguity it is always best embrace casebycase review instead of exansi protections that is the economic way to think. In the 2010 order, in contrast to 2015 there were tons of citations to the economics literature, explaining ambiguous effectses of a ban on consumer welfare and investment. That got flushed away in 2015. Instead what tom wheeler did was embrace this populist wind that led him to a decision of outright ban on paid priority. And you will be hardpressed to find economists who would support banning conduct that could be justified for procompetitive reasons. Importantly, economists are not saying no protections are needed. This is something i want to address. We dont want to have a false debate about ironclad protections versus know protections. That is the not the debate at least i want to v i think protections that i have in mind, would permit independent content providers to bring a complaint to the fcc and have their complain adjudicated by someone, perhaps, an adAdministrative Law judge to bring them the kind of relief that they seek. Thats not the same as no protections at all. Hal, you have written about the harms to competition what is called the regulatory pendulum, swinging back and forth of different policies as we transition from one admin vision to another. In what direction dubec that pendulum to swing in the Trump Administration and do you see spaces a the fcc or other agencies where you could halt that pendulum . Guest what im worried about and i spoke in a recent article, the pendulum swung to one extreme under tom wheeler. To give his constituency maximum benefits and inflict maximum pain on his opponent. What im worried about, based on the writings of jeff and mark jimmies son is that pendulum might swing too radically back in the opposite direction. That is no protections. They have written that many of the duties that are now within the fcc ought to be passed to the federal trade commission. While that might please some on the right, im worried that it wont get any buyin from the left or those on the center of the debate that i would like to see myself. The concern if the isps are watching these two parties kind of go after each other with the pendulum swinging wildly back and forth from common carrierbased to interventions under democratic control and no protections under republican control, my concern is that they will just pull back from the space and look elsewhere. They will look elsewhere for their investments. They will look to content, for example. So i want to, i want to bring this debate to a close, find a place of Common Ground for those on the right and the left, protections for content providers that would allow the isps to have faith the issue is settled and they will be treated fairly going forward. Cspan just to follow up on lydias questions, the subtitle of your report though, the agency in search of a mission. Is the fcc still relevant today. Guest i think theyre very much relevant. This space we talk about, the Communications Space is the future. When we talk bin svelts in infrastructure, whats going to lead the economy going forward, i think its a communications and broadband. And there will be fights that will play out. There are natural adversaries, large content providers, and isps, seems to me that the fcc is Perfect Place to reconcile the differences of opinion and to bring peace in the broadband ecosystem. Well, to go back to that and your previous point there is also some debate that the Trump Administration may want to restructure the fcc itself, not just its authority and what it undertakes, even at bureau level, what each bureau is responsible for. As an economist what kind of changes do you think should take place and how might the changes Impact Industries that the fcc regulates . Guest if i had a chance to restructure the fcc and i have written ha book called the need for speed, sorry about the quick plug, the way i see it, not so much in terms of departments or bureaus and thinks like that, what should the agency be doing, how should it be structured . To make something concrete, talk about the zero rating debate and the concept there is Wireless Internet Service provider might give preferential treatment to certain content, in particular might decide not to treat that content or count data associated with the content with wireless providers, data caps. What troubled me as i saw tom wheeler weighing in which plans you thought were procompetitive and which plans were innovative, if i could get him to read my book, what we want the fcc to be doing is to depoliticizing these decisions. Get commissioners out of particular disputes between parties and creating a forum through which content providers, independent content providers or independent distributors could bring complaints, have them ajudicated by some specialist. I think the Administrative Law judge is the right specialist. This by the way is how the fcc has been adjudicateing disputes in the Traditional Television space for years successfully. There isnt any reason that that could be used to adjudicate parties in internet space. What do you think Economic Impact would be on these companies . Guest well, if there were real rules that were protected and could bring speedy relief to independent content providers and independent distributors, i think isps would be incentivized to behave nicely. I think this is something that will, well watch it play out, i would commend people to look to see how it is played out in the video space. The thing we want to do is create incentives for both edge providers, content providers, and the isps to invest and have confidence that their Business Plan is going to make sense and they will have a fair go of it. Cspan hal singer, in your paper, the curious absence of Economic Analysis at the fcc, you spent quite a bit of time looking at wireless, the development of Wireless Technology and Economic Analysis. Why did that work in your view . Guest well, jerry and i are of the view that the reason why it worked is that the fcc consciously made a decision to take a handsoff approach to wireless. Cspan back in the 70s. Guest back in the 70s. There was a push for wireless to be treated more easily than that there was a push to treat wireless as common carriers. The fcc rejected that correctly. We think it was lighthanded approach that created the incentives for isps, wireless isps, carriers to invest and innovate. Now we have very competitive markets in wireless, the type of markets we wish we had in wireline, i think wireless is almost the template is the Gold Standard that wed like to it hold out for what competition should look like. Cspan so is, should there be a common regulation across all these Different Communications industries . Guest i think there should be a common regulation. I dont think it makes sense for the government to favor one type of platform over the other. I know this was a big issue in the Net Neutrality debate. He we, common is good. Cspan who is your coauthor . Guest jerry fall haver on curious absence of Economic Analysis. Cspan who he is he . Guest professor at wharton school. Cspan previously at sec. Guest a previous economist at the fcc. Cspan lydia beyoud. Can you give us what you think the Playing Field would look like . You as economist what would that be at the fcc . Guest so evening Playing Field i want to see a venue complaining content providers, start with those, we have another set of actors too who are potentially at disadvantage, that would be independent distributors. Lets start with the content providers. I want to see a platform or venue which they could come to the fcc and say were not being treated right. Currently there are currently no protections. It is kind of open in the air right now but i think we could look at the kind of protections we have for independent Cable Networks as a template for how that should go. With respect to Online Distributors i think the same platform could be used. Finally, you know, we talk a lot about discrimination by vertly integrated isps potentially threatening innovation in the content space. There is another type of innovation going on by Search Engines as well. It is not clear why the fcc should not only be concerned about discrimination by verticallyintegrated isps. Certain large Search Engines who will go unnamed can do as much damage to innovation in the content space. As were looking for compromises, how the fcc should be structured, what sort of discrimination they should be on the lookout for. I would like to raise that issue as possible area for fcc intervention. Youre saying that google should be regulated by the fcc and other providers sounds like . Guest what im saying when Congress Starts thinking about what a future fcc would look like, were thinking about discrimination by vertically of had integrated platforms the conversation should not be limited to isps. I think the threat that google poses to particular to innovation in the content space is just as significant say what comcast or verizon can do. Cspan hal singer, to overuse a phrase that has been overused, go where the puck is going, not where its been. Has the fcc been guilty of looking backwards when it comes to regulation and monitoring industry . I do think theyre a bit guilty of looking backwards. Wontcommon carriage was designed in the 30s in a different era, the era of monopolies. The great irony common carriage was designed as an nondiscrimination protection, right . Title two and used to justify zero price rules has nothing to do with nondiscrimination. Nondiscrimination would mean if i offer you a certain paid priority arrangement at a given price i have to stand ready to offer it to similarly situated comers but that concept is completely anathema to what tom wheeler and the strong Net Neutrality advocates are thinking. They dont want prices. Theyre really antiprices. That is what neutrality has become. So yes, they looked backward to common carriage but if you really dig deep into what common carriage was about, it has nothing to do with sort of zero price regulations that they passed