Of the Free State Foundation and im pleased to welcome you to the Free State Foundations ninth annual Telecom President obama conferenc conference. I want to extend a welcome to our cspan audience. Im a selfconfessed cspan junky. My mom, may she rest in peace she always worried when i was a cspan junky, not really knowing what i meant by that. But im always pleased and grateful when cspan is here and welcome to the cspan audience. This years annual Conference Follows on the heels of the 10th Anniversary Gala last december, so with next years annual conference will be in double digits for this event, too. Which just confirms the old adage that time flies when youre having fun and i might add when youre busy as well. Almost every year, i say some of you know this, i say that youre annual Telecom Policy conference just keeps getting bigger, better, and more impactful. Well, as long as it remains true, im going to deep saying it. Even though we had to reschedule this years conference because our first date, march 14th, happened to be the only snowy day this winter in washington, i think this years conference upholds the tradition. A quick glance at the Program Shows why the conference is a mustattend event for anyone interested in communications, internet and hightech law and policy. The program that you have here, its also on our website, if you need another copy or want to download it near the the top of home page. The theme for this years conference is a new direction for communications policy. Less regulation, more investment and innovation. With a new fcc, and a new congress in place, the opportunity is ripe for charting a free market oriented direction for communications, laws and policy. As most of you know, at the fcc under the leadership of new chairman who will be with us of course for our lunch session today, the agency is already charting a new free market oriented direction. Well be spending a lot of time today of course 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 internet for freedom, as the current fcc charm prefers. By whatever name you want to call it, it is an important proceeding for the fcc. Aside from the conversation that i am going to have with fcc chairman at lunchtime, we have a stelar lineup for todays program. The First Program will feature Howard Shelanski and boyden gray here. Then we are going to follow this session with an allpanel lineup. And then immediately following the panel session, we are going to break for a short time for a very nice buffet lunch. I guarantee you, it is going to be nice but i hope most of you are here for the program and not just the lunch. We are honored to have the two acting directors of the trade commission for the after lunch session. They will be featured at that session and then winding up, michelle konl michelle conelly who is a professor at duke university, will offer some final thoughts. Now, remember to tweet if you are a tweeter, the handle i think we have the twitter handle on each table. But it is fsfconf 9. Which should call to mind fsf conference nine. And before we get started, i want to take a second to acknowledge and thank some of our Staff Members that are here. Kathy baker is our events coordinate and communication coordinator. And so she has an awful lot to do with this event and we appreciate her. Lets give a round of applause if we could for kathy. [ applause ] and then i want to acknowledge the scholarly work by two of our Staff Members that are here and their contribution, senior fellow seth cooper. Seth is going to be moderating the conference after lunch and their work is very important. And finally, i want to introduce to you our newest senior fellow, ted bellema. He joined us in in march. He is a ph. D. Economist and a lawyer. And really combines the law and economic expertise. So ted, if you could stand up so people can see who you are. [ applause ] so thanks to all of them and then finally, i want to thank as i often do but sometimes forget to do, my wife laurie she does an awful lot of work for the foundation. When i say that, i am not referring to what she does tolerating without too much grumbling, the often insane hours that i put in for the Free State Foundation. So i appreciate everything that laurie does. And maybe you can thank her with me. [ applause ] okay. With that, lets get started with our first session. And im just going to introduce our speakers first with their indulgence and yours too, i am going to hit some of the highlights that are in their bio. But i refer you to the more complete bios that are in the brochure. Our keynoter for the day is Howard Shelanski. He is a professor of law at Georgetown University law school and a partner as well as the Davis Polk Law Firm and importantly for our purposes today of course, he is the former administrator in president Obamas Administration in the office of information and Regulatory Affairs which is within the office of management and budget. And that position is referred to the regulatory czar. I am not sure if howard likes to be a czar or not. But thats the fact. And howard, again, just briefly, he is a former director of the ftcs bureau of economics and he also served previously as chief economist of the fcc from 1999 to 2000. And a senior economist for the president counsel for economic adviser during president Clinton Administration and howard as well as ted have both degrees in ph. D. In economics and also a law degree. By the way, the topic of this session, and you will see how howard and the next speaker i am going to introduce have the experience and expertise to talk about it is Lessons Learned, improving regulation in government administration. So it is hard to find someone more qualify than howard to talk about that. Along with boyden gray who is going to be the commenter, reactor to howards comments after howard delivers opening remarks. Now, c. Boyden gray is the founding ambassador. Also very pertinent to our program, today he was counsel back in the first bush administratio administration,. He can fill us in on what this is. Someone told me once that when i had another ambassador on our program, we have had a few that once you are an ambassador, that that title never leaves you. That you are always ambassador. So if i forget, boyden is a long time friend of mine, so if i forget to refer you as ambassador, i request your indulgence. It is left off the official bio, but what i think is the most important position that he health during his illustrious career is the former chair of the section of Administrative Law and regulatory practice of the aba. And that might not strike you as being important as the ambassador of the eu. I am a former chair of that section as well, of the aba. So i consider that to be important. And boyden, when i was serving my year, just a one year deal, when i was serving my year as head of the section of Administrative Law, i was asked if i could be ambassador of the eu at that time. And because i had that other job, i had to decline that. I wasnt able to do it. But anyway, now you know about his other position. So with that introduction, i am going to turn it over to howard to get us started and then we will get boydens reactions. Thanks very much. It is an honor to be here and share the podium with boyden who is in some ways a founder of Regulatory Reform and anybody who has worked in my position at oira has served a pantion of people. 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. Why we need to be careful when we embark upon a series of fixes through legislation or other kinds of means. Because there are good things in our regulatory system. There are things that could use fixing. And fixing them is hard. And we want to proceed very carefully and that is an Important Message to get across right now that there is 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. And as long as people think with a cool skmhead and willing to tk that some things are wrong, back up. So i would start with the premise that the United States has probably the best most transparent and most accountable system of regulatory process in the worlds. One of the jobs i had as administrator was to go around the world with our ambassador, and to negotiate with foreign governments or entities on Regulatory Reform issues. And one of the things that made that difficult was that 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 attempt to regulate. Some type of preliminary report. And then boom regulation pops out of some back room and there are few basis in which someone can challenge that rule. There are a few exceptions but by and large an agency has to issue a proposed rule. That proposed rule has to go out for Public Notice and comment. The agency has to issue a final rule that is built upon the record and the response the agency makes to the 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 and remanded and struck down in court. If you think of the incentives that it generates down the stream, one can see that it is 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. What the public gets to comment on is the rule. What the public gets to see in support of that rule especially if it is an economically significant vule the regulatory impact. Not a white paper describing what some people think the effects might be, but the analysis. Things that can get challenged and brought before a court. So one wants to think twice before one backs up and fundamentally changes a stmg that even if it is not perfect or costless a system of transparency and accountability built into it. It is a rare type of thing. Now let me back up and talk about things that i think are Lessons Learned and lessons of what we might need to fix in regulation and what we might do to come up with a better regulatory system going forward. So what is the job of a Regulatory Review Office. So the first is to identify a real problem. This may sound like a obvious statement, but it is not always the case that regulations that agencies issue address 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 that the problem is actually going to occur. That is a Weak Foundation on which to do regulation because then the benefits which as i will talk about in a minute, are always a difficult thing to make salient and to prove become even harder because not only are the benefits hard to examine because they are in the future, they are highly contingent on the problem occurring. And it is hard to make a case for regulation and hard for parties to make a cost for that regulation when the regulations to begin with are the benefits of a regulation actually occurring. So having a convincing case that this is what society should solve is the first issue. Sometime there is is insufficient attention to making that case. Agencies could do a better job making that case. Its not typically what agencies are set up to do. They look at their statutory authorization. They look at some event that has happened out there and they respond. The communications aspect of explaining what they are doing and why they are doing it is not done very well. Sometimes that is because it is a hard case to make. That is all the more reason the agency should have to go out there and make the case. Or the problem is one that is too costly to solve. So identifying a real problem and communicating and making that case convincingly is the first step in rule making. 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 good regulatory system is agencies move quickly towards a solution towards a problem. One of the things that i found as administration of oria is that many proposed rules on significant issues that came in the Office Without examination of regulatory alternatives beyond the proposal. Discuss them and even analyzing them in a rigorous way, they show the public when the rule goes out for comment. And what else might be a possible approach. What are the other things the agency has thought about or rejected or become less convinced of appropriate solutions to the problem. Different alternatives will have different cost benefit profiles. Different alternatives will elicit different data and comments from the public. And the agency may find out something that they inside their sort of closed circle of people working on the rule, they may find there is information that convinces them they made a mistake. They should go back to the drawing board. So identifying potential Effective Solutions to the problem. And even if the Agency Proposes one of those to be transparent and discusses in explaining what alternatives there might be. This is in the executive orders. They have been there, i can throw out a numbers. Executive 12866. 13610. All of these that since president reagan every administration has seen fit to reiterate and strengthen on similar principles on regulatory review some of alternatives are a big one and the third thing that i am going to identify is in some cases controversial. And that is that proposed Solutions Alternatives offered up as possible rules down the road, should not impose cost that outweigh the benefits of solving the problem. Now that sounds obvious. Why would we under take a rule that is more costly than the benefit it brings. This is a fraught exercise. Now 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 one of the biggest mistakes that can be made in Regulatory Reform is to issue a mandate. 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 nonquantifiable benefits. 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 rwell achieved by the rule and the rule says part of the reason we are going to achieve these costs is that same sex families in the military can have access to safe housing, how do you put a dollar on that. It is a dignitary interest. There is not a quantifiable benefit unless you stretch and do a not credible quantitification. There is an immediate quantifiable cost. So the executive orders talk about approximate 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 think it allows society to make decisions that it is going to have regulation that are going to have benefits that are quantifiable. We as a society want to pay for those things. That said, i do think it is important that the public know very clearly what it is paying to get those kinds of benefits. So the disclose sure of costs that can be quantified or identified even if not well quantified that are going to be incurred in the pursuit of those benefits have to be put out there clearly and transparently. Agencies hate to disclose costs and love to tout benefits. One of the jobs of a Regulatory Review Office is to right that balance. I think we are going to see interesting things happen under president trumps executive orders. If one has to repeal two rules to issue a new rule. We are going to see the agencies flipping on cost and benefits as they come forward urging repeal of certain rules. To repeal a rule, you have to make a rule. Under the administrative procedure act you cant say never mind, we are not doing that anymore. Once the rule is out there in published it is a change that you have to do on a full apa process. That means you have got to explain why your previous record was wrong and why facts and evidence today suggest repealing the rules. The things that were the benefits of the rule that was originally passed are now going to be the cost of repeal and one saw this highlighted very well in an exchange on fox news between Chris Wallace and administrator pruitt. Chris wallace said what are you going to do about the 90,000 cases of asthma that those rules are preventing. Now that was an interesting question to ask. Because if you are going to repeal the rules, there is a cost to society. So my bet is agencies are going to come around and say oh, those rules were not so beneficial but they were costly. The opposite of what agencies do. One again needs a trut