According to FCC Chairman Amit Pai
and the partially dissenting judge in a key case, the FCC desperately needs
more economists and their work product. See https://www.youtube.com/watch?v=-JL7Wrwj9dg;
and https://www.cadc.uscourts.gov/internet/opinions.nsf/3F95E49183E6F8AF85257FD200505A3A/%24file/15-1063-1619173.pdf. If only these disciplined and intellectually
honest non-lawyers were on the case, the FCC would better serve the public
interest. See, e.g., Gerald R. Faulhaber, Hal J. Singer and Augustus H. Urschel,
The Curious Absence of Economic Analysis
at the Federal Communications Commission: An Agency in Search of a Mission,
11 INTERNATIONAL JOURNAL OF COMMUNICATION, 1214–1233 (2017); available at: http://ijoc.org/index.php/ijoc/article/view/6102/1967.
I don’t buy
it one bit.
The FCC has
far more lawyers than economists, because much of the agency’s job requires
statutory interpretation and implementation.
The Commission has an established body of case precedent from which it
has a legal obligation to consult and apply absent changed circumstances, particularly
in the frequent adjudications it performs.
Of course economists should participate in the FCC’s policy making process
to assess whether and how circumstances have changed. Additionally, laws occasionally do
specifically require the FCC to conduct economic analysis such as assessing
whether a market operates with “sufficient competition.”
D.C.
Circuit Court Judge Williams endorsed a statement attributed to former Chief Economist
Professor Tim Brennan criticizing the FCC for ignoring economic analysis. See Williams Partial Dissent at 41, citing http://www.wsj.com/articles/economics-free-obamanet-1454282427.
Professor
Brennan is no shrinking violet who somehow found himself ignored, if not shunned
at the FCC. What is sought by Chairman
Pai, Judge Williams, incumbents and the legions of sponsored economists already
participating in FCC proceedings is something quite different from legitimacy
and a seat at the table. They want
doctrinal superiority.
Doctrinal
superiority means that the FCC should unconditionally accept the work product
of specific economists and their particular views. Chairman Pai does not appear
to want more robust and open economic analysis.
He appears to want a specific strain of economic doctrine to apply. Unsurprisingly that doctrine supports a deregulary
wish list of incumbent ventures so they can accrue more market power, profits
and insulation from competition.
Chair Pai
does not appear to embrace peer reviewed, disciplined economic analysis
unfettered by specific, desired outcomes.
Instead, he seems to welcome economics that create unimpeachable rules
that he endorses. Lawyers surely can
interpret law and parse its meaning, but economists do not even have to start
with an underlying predicate. They can make it up as they go along.
Free of
having to start from case precedent and specific statutes, economists can state
unequivocally that mergers and acquisitions “promote competition.” Other Big Truths from sponsored telecommunications
economists include the conclusion that:
● markets only need 3 competitors to
operate efficiently;
● deregulation
should start if a market might become competitive in the future;
● vertical integration always helps a
venture achieve scale and efficiency; and
● incumbent common carriers should
receive the same or greater compensation for having to lease capacity to a
competitor than what would accrue if the carrier provided service to an end user.
Most
economists I know have solutions to all of society’s ills. Many have great confidence bordering on
smugness, no doubt enhanced by their command of complex math. Most have a particular agenda that colors
their research converting it into advocacy that would not pass must with peer
review. The allure of easy and lucrative
financial sponsorship from stakeholders converts most economic analysis
submitted to the FCC into predictable, biased, partisan and doctrinal work product. The FCC already receives tons of this kind of
material in the proceedings for which it solicits public comments.
I have
little confidence that having more unsponsored, but likely partisan and doctrinal
economists at the FCC will miraculously enhance the work product of the
Commission.
I’ll
conclude with a lame joke about an economist who suddenly finds herself in a
pit. How does she get out of this
dilemma? She assumes a ladder.
