tv Telecommunications Policy Conference Part 4 CSPAN June 30, 2017 11:12am-12:13pm EDT
now i'm going to ask the panel to come up for our next program, and get situated. i don't expect that to take more than a couple minutes, then we'll resume. we are going right into the next panel which is the view from the ftc, overseeing internet practices in the digital age. the panel looks to be incisive from a policy perspective and keeping in mind our c-span audience, we promise a panel discussion that is tv and family
friendly as always. you have biographies with you that are printed. the brochure is also available at our website, in the interests of time i'll keep the bios short. seated with me at the podium here i have ted lipski, acting director of the bureau of competition at the federal trade commission. the bureau of competition addresses mergers and premerger clearance and anti-competitive practices. stead ted is recognized in the field of anti-competition law and policy. with an extensive background as well in private practice and historic service at the antitrust division of the department of justice. i also have here on the panel,
tom paul who is acting director of the bureau of consumer protection in the federal trade commission, the bureau of consumer protection involves matters such as advertising and marketing practices, privacy as well as enforcement actions. and then finally we also have with us today daniel lyons, associate professor of law at boston college law school where he specializes in matters such as property, telecommunications and administrative law. professor lyons is a member of free state foundation's board of academic advisers. so, as we proceed along here we're going to have our distinguished ftc officials speak for 10 or 12 minutes, after that time professor lyons will be offering some responsive comments or any other life changing insights that he wants to impart to us today. so i will begin by turning things over to ted lipski,
acting director in the bureau of competition at the ftc. >> thanks to the sff for this opportunity to speak. i should probably begin saying that my colleague tom paul is really the star of this show for a variety of simple reasons. the ftc is by far the most experienced and expert agency anywhere on the planet in terms of consumer protection, which is tom's responsibility. >> thanks for the plug. >> the bureau of competition of the federal trade commission though we have very considerable authority and also regard ourselves as great experts, we have a truly unbelievable recent won loss record in antitrust litigation and we are a fearsome fighting machine, but we share
antitrust responsibility with a number of other institutions in the american legal system. of course, the antitrust division of the department of justice would be the first to identify in that respect. we have concurrent jurisdiction in most respects in terms of our antitrust jurisdiction, and of course the antitrust division also enforces laws against exclusionary monopoly conduct, cartels, we share merger review responsibility with the division as well. but such was the affection of the benjamin harrison administration for antitrust remedies, we also have what is called a private right of action also referred to as the private attorney general provision of the antitrust laws. any one injured in his business or property is entitled to bring
a lawsuit in a federal district court to recover damages for any injury suffered on account of an antitrust violation which are automatically trebled and the plaintiff gets his attorney fees paid by losing defendant. if the plaintiff loses he doesn't have to pay the defendant's attorneys, so it's a one-way fee shifting provision, but always acted as a significant subsidy for antitrust litigation in the united states and it is therefore no accident that the section of antitrust laws spring meeting is attended by thousands of antitrust lawyers from all over the united states and this is a model that's been repeated around the world. antitrust litigation is one of the most prolific species of litigation in the federal courts, and there's also antitrust litigation on behalf of state attorneys general under
what we call the baby sherman acts and the baby ftc acts, the state laws that are analogous to the federal laws. so it's made american commerce kind of a free fire zone for antitrust litigation. and i haven't even mentioned class action procedures, and a number of other broader features of the civil litigation picture in the united states that also make it very easy for an injured party to bring an antitrust lawsuit. this would include notice pleading, extensive pretrial discovery, and on and on. that's why as i say k used to stay to my younger colleagues, looking to join a law firm. i say if you are successful as a -- in the antitrust defense bar you can look forward to a pretty good life, but you'll
always fly commercial. if you want to own your own gulf stream you want to be on the side of the plaintiff's bar. so antitrust -- the reason i am going through all of these tremendous features of the u.s. legal system that make it so easy for the antitrust laws to be enforced, is that this is what awaits those who would engage in anti-competitive conduct as an isp or a telecommunications carrier out beyond whatever security is provided by a regulatory breakwater. we do have some doctrines that protect regulated parties from antitrust suits, but the burden for establishing those immunities is rather severe, if you don't have an explicit antitrust immunity under a statute and i think there are riddle or no areas for explicit
antitrust immunity under the federal communications act, you have to find a plain repug naens between the regulatory system and the antitrust laws before any of these other implied immunities can be invoked. so, the antitrust is a powerful system, it is used to condemning and bringing very severe remedies to those who engage in anti-competitive activity. to the extent that this debate how to treat the neat make it neutral or whatever, are based on the idea that a lessening of the regulatory burdening on the fcc side would lead to a situation in which anti-competitive conduct was free to occur without fear of further consequences. that is i think demonstrably unrealist
unrealistic. the ftc is waiting, we brought a case for anti-competitive exclusionary conduct, a case called mcwayne, the department of justice has brought cases for exclusionary conduct. and of course the dense supply case was followed on by extensive private litigation. so that's why there are a lot of antitrust lawyer, that's why most significant companies are careful to have actively administered programs of compliance policies for antitrust law and why the pub need have no fear that anti-competitive practices occurring in the free market of internet offices are going to be detected and punished. so that is in a sense that's kind of the wheel, in my wheel house, what does antitrust enforcement have to do with the
provision of internet services and the things that are under consideration now at the fcc? now, i'm going to get slightly editorial, and of course in everything i say i'm not speaking for the commission, i'm speaking for myself. but this is -- you need to keep that especially in mind for the next comment which is, i was very interested by the remarks of chief justice cohen on the morning panel, who observed that he didn't understand why we would be seriously discussing the application to an industry as dynamic and growing and technologic complex and internet services, why should we even be considering applying a form of regulation that goes back to the 1930s. >> i didn't think that he was
intending that remark as a compliment to title 2 regulation. but to put the origins of title 2 back in the 1930s is in a sense a bit of flattery. this form of regulation was actually modeled on the first economic regulations that were entrusted to an administrative agency. this is going back to grover cleveland. and not the modern state of the art grover cleveland of his second term after the benjamin harris term. this was his first term during which this regulatory was given to the commerce commission. the first in the u.s. and it is a fact that the fcc title 2 regulation is a direct descendant of that form of regulation. the interstate commerce act and
the interstate commerce commission has been the model for all of the economic regulatory agencies at the federal level in our history. am the civil aviation authority which became the civil aeronautics board, the federal maritime commission, the federal power commission which became the federal energy regulatory commission and the fcc which actually if you draw the line back from tight twol regslation you'll ultimately get back to i believe it was the interstate commerce commission which was the original repos tory of the electromagnetic spectrum enacted in the 1920s in the u.s. so i'm a cheerleader for the light regulation approach. and i endorse the philosophy that the temptation to look at
the problems of a dynamic and quickly developing and to immediately apply the structure of economic regulation as a way of anticipating and making sure that future problems don't arise, has largely been a fail. the interstate commerce commission no longer exists. it was eliminated in 1996. and the civil air 0 taughtics board no longer exists. it was eliminated 10 years earlier. it is in many respects a dubious and highly questionable and in many industries a failed system of regulation. so i'm a light touch regulate e i'm a fan of antitrust as the way of ensuring that the dynamic free competition gives the cooper what he wants. we also need consumer protection. so i'm going to turn the mike
over to tom. good afternoon. thank you for asking me to come here today and discuss the ftc's future consumer protection role with regard to on line security and privacy. i have give a disclaim ter views i express are my own and not necessarily represent the views of the kbhigs or any individual commissioner. one generation has transformed our lives. when i was a kid i used to use encyclopedias to look up information and a paper map to find my way. i share add land line with my parents, i could only talk to one friend at a time on the telephone. my parents used travel agents to book vacation plans, and endured waits to be on hold buy concert tickets and hired people to perform home improvement tasks we didn't know how to perform ourselves. today my teen son cannot imagine those circumstances.
he can look up historical trivia, current events and song lyrics at the touch of a button anywhere and any time. through group chats and social media can communicate with dozens of friends, he can by tickets and find skoubts. he can look at youtube videos to learn how to mow the lawn, cook dinner or fix bathroom tile. being a teen of course he doesn't do any of those chores but the know-how is throughout on line if he were so inclined. in the 2010s technology has moved faster with the rise of the internet of things. almost any pros you can imagine is being made right now as a connected or smart version. refrigerators to home security systems, baby monitors, light bulbs, clothing. yes, smart clothing. last month amazon announced a hands free voice controlled cam
that that records your look and gives you fashion advice. not if you are if that's a good thing or not but it's out there for those who would like to have some thoughts on fashion. these internet developments transformed and will continue to transform our lives. in large part a free arkt, limited regulatory approach while protectioning consumers from arm. my boss has described her approach to governing as regulatory humility. that it is what we are trying to implement. what this means we must recognize the if errant limitations and ability to predict the future. these limits counsel abdication, not abdication but prudence in the use of governmental power. let me discuss why i think the ftc applying such approach to
online data security and privacy would serve consumers well. it helps to start by going back to the future. specifically turning the clock back to 2014. the ftc was the federal governments leading security agency, the agents active law enforcer. over 500 cases prior to that time. am we challenged those and under the ftc act, we challenged those who violated other laws such as the children's online privacy protection act t fair credit reporting act. the ftc's privacy and data security cases involve off line and on line information in companies charge and small, including social networks, ad networks, on time on line retailers, mobile apps and mobile hand sets. in 2009 the ftc shut down a
rogue isp. they participated in spam, and harmful content. other examples are verizon for issues related to the security of its routers. the fdc supplemented activity with some business sidence, and research and development. for example, in 2014 the ftc had a series to examine the privacy and security of new technologies involving mobile device tracking, connected health and fitness devices. the ftc staff host fd on big data, and mobile security in 2013 as well. and commission staff throughout this period of time released countless consumer and business medicationnal materials to provide tips for consumers and businesses how to avoid harm.
in 2015, the ftc's rule changed somewhat. the fcc issued its open internet order to accommodate broadband service. under the long time views of both the ftc and the fcc including in a brief i believe was filed yesterday in a case in the ninth circuit, the ftc and the fcc have always viewed the ftc acting jurisdiction with regard to the common carrier activities of common carriers. the fcc's open internet order therefore effectively prevented from engaging in enforcement and other consumer protection activities. on line data security and privacy. in 2016 as many of you know the fcc followed with the issuance of rules, limiting data security and privacy practices. in doing so the fcc chose a more
rigid approach to broadband ka to security issues than the mtc's days by base approach. the fcc rules set data for broadband providers separate and apart from the standards applicable to others in the on line space. es chewing the more holistic approach. under the leadership of chairman pai the fcc has a different tact. in march the fcc stayed its privacy and data security broad band rules after which congress use the congress review act to invalidate them and predues the fcc for adopting similar rules in the future. earlier this month the fcc issued a notice of proposaled rule making. as we heard today and i'm sure all of you know, this proceeding
is the ongoing. if the fcc were to make its proposed change final, the ftc likely would then be able to use its enforcement, rule making and other activities to once again address broadband data security and privacy. like to talk about what that would look like if that were to come to pass. the fcc is ready and able to protect broadband subscribers. the ftc quonts to be the federal government's leading agency on security and privacy issues. we have a welt, expertize we'll fwring bear on data security and prif city laws. woe we would apply starts to all companies that can, regardless whether the companies provide broadband, data analytics, social media or other services. our approach would ensure that the starts apply, comprehensive
and consistent and pro competitive. at the heart of the approach to online data security and privacy is tough but measured law enforcement. focused on combatting unfair or deceptive acts. we hold companies responsible for privacy promises they make to consumers. we hold companies accountable for misuse of sensitive information. we hold companies responsible for not having reasonable data security practices, it as illustrated we use case by case enforcement. some argued it would be better for the government to address on line security and privacy rather than case by case. rule making imposes standards based on prediction that they will be necessary and appropriate to address future condkt. case by case enforcement involves no such prediction. the challenges have occurred.
of course such enforcement as companies look at past enforcement to fid their conduct. the give at any challenges of making predictions about the internet's future we need case by case enforcement which is strong yet flexible. we do not need prescriptive regulation. some of the add mo cats of -- emphasize the clarity and certainty that rule would bring. yet i think this underestimates the guidance that companies can derive from other activities. the complaints and orders in the more than 500 data security and privacy related cases provide forms with critical information. the ftc has a long history of educating businesses about their data security and privacy
obligations. we continue to build on that work particularly focusing on helping small businesses get guidance. we're creating a one stop shop with materials specifically for small which ises to help them come into compliance with the law. in the summing mass, a focus on helping businesses identify risks to their companies. given the ftc's ability there is no need issue prescriptive rules on ask da ta to convey guidance. the call for rules to provide guidance and on mine data, security and privacy over limits the guidance by prescriptive regulation. it can provide some certainty in the short-term. in the the fast changing areas like on line data security and
privacy, regulations would need to be amended very often to remain current. it's com purr some and time consuming, using rule making procedures. so such amendments by agencies are very unlikely to keep up with the pace of a change. out of a rules can be very unclear in their application and auz conclusion and unintended consequences. the ftc knows its approach to security and privacy must be forward looking. because the internet continues to evolve, we must evolve with it. we demonstrated our commitment to learning about newer technology including new on line. its technology gists work with investigators and prosecutors and develop brings cases involving newer technologies. they encourage researchers to undertake projects including
many protects that involve online issue. we also have activity research agenda on data security and privacy. last week we hosted on identity theft. new harms related to identity left. i encourage state holders to conduct new research to help us deal with these. next month a workshop with on connected cars where we'll discuss technology, and security issues. over the longer term, the fcc is conducting and encouraging new research into privacy. note that this is the fcc's current data security agenda. it's not carved in stone. changes in technology including those related to on line privacy. in conclusion the law, the
market, and the techology are always evolving. the fcc is ready to act with consumers including a broadband subscriber without unnecessary or undue burdens. thank you very much for having me here today. i'm happy to answer questions you may have. [ applause ] >> thank you, tools tom. let me take a moment to recognize tom servis to the ftc, also served at the consumer financial protection bureau and has great experience in private practice of law as well. so we're honored to have you here. >> thank you. >> now i'd like to thurn things over to professor daniel lyons. >> i'll try be to as breach as a law professor can be. i'm glad there is a panel and looking forward to the ftc playing a greater role. i think they are doing great work not just in the data
privacy realm which tom mentioned and i think probably their highest profile entry into our area. but also stuff that exists under the radar, case last year i think they against an operator. ftc had the tools. so on these and on many issues we see in cyberspace law, legal issues are increasingly cutting across multiple business models affecting a number of players online. i think it's better generally to have a regulator who can few these from the perspective of the ecosystem. that was one of the issues we saw. with regard to net neutrality, i think although there's a lot of rhetoric in that about speech and quality first amendment issues, at base what net neutrality is, antitrust, and consumer protection issue. the argument goes that consumers
have few choices among wire line providers and the companies in that space might use their position to in ways that might harm competition. that sounds to me like a classic antitrust problem. the fcc has ro butt deals. they know how tosette whether you are in the internet ecosystem is one that could race questions. they have a legal standard that can evaluate these vertical agreements, and standard that has been developed over time that recognizes some vertical foreclosures are anti-com searer and some can be pro. the earlier panel discussed the fact that we have a consensus developing around a no blocking and no throttling rule and no unreasonable discrimination rule, where the rubber it hits the road was on the question about paid prioritization. which can be good, can have
anti-competitive effects. the ftc is able to evaluate on a case-by-case basis. whether one might harm consumers. using robust law that's developed from a number of cases elsewhere in the economy so they have a broader scope formed by a lot more history than the federal communications commission can. i agree that the flexibility is a lot better in a -- a dynamic market place than more rich id rule making. on the consumer protection side one thing that opened my eyes was the way that the dc circuit evaluated the fcc's net neutrality rules. in response to argument from the dissent that the imposition of common carriage on isps foreclosed the isp's first
amendment right to control. the majority responded that yes, isps have first right of control but when they are holding themselves out to consumers as offering access to all internet end points then the eighty circuit said it's okay for the fcc to impose rules in order to make sure they are full tilling the promise they made. that sounds to be a lot like what the ftc does. whatever you put in your terms of service we're going to hold it to you, that's what section 5 authority has always done. not just in terms of professions but intiesments and evaluating for inherent unfair practices. given the authority to regulate unfoyry practices sounds a lot like the general conduct surgery but there is a huge difference. the fivgs i think is that the
unfair conduct standard has been informed by a number of cases over time. the ncc built into its statute how you determine injury to consumers. one that's not readily avoidable by consumers themselves. 1 that's not outweighed. these are important distinctions from the catchall general roving conduct that the fcc has tried to give itself. it's important because a, focuses on consumers, the thing we seem to have lost sight of in the fcc world. b, focuses on the need for a cost benefit analysis. look at the offsetting benefit might be. we allow companies to experiment with models and see what sticks, only if there is harm will we intervene and potentially take
action. my time is almost. we're in the world of the teenager, it's moving quickly. i think it's important that isps be allowed to innovate like any other in the system. i think of sprit, offered up the pongt of getting an unlimited talk and text and social media, this would be fantastic for my daughter. she doesn't do anything else online except instagram. if i could get a phone that gives her unlimited instatram and het oroff my plan that would be a benefit to her. unfortunately sprint felt it couldn't introduce that because it might run afoul of the fcc's rules. i think better able to decide is this anti-competitive or pro consumer. and decide on a face by case to
go forward. rather than to announce sweeping rules that prevent companies from wanting to experiment. >> michelle conley to close out our conference. so someone in the audience has a question, there is a microphone that is going around. and you can be recognized and pose a question to our panelists. my colleague has a microphone there. >> thank you. lydia with the event news. i have a question for the two of you. either of you concerned that the ftc is hamstrung with the split commission? >> no.
>> no. you know, i think it's more of a theoretical problem than a practical real world problem. the most of the matters that have come up at least in the three months or so that i've been an acting director, the commissioners have found a way to discuss them and move forward on behalf of the agency. and so yes, i think in theory the idea that you have two commissioners who could have diametrically opposed views could keep the agency from doing some things but i haven't seen that kind of a practical effect at this point. >> a famous antitrust scholar talked about when he was a young associate at a washington, d.c. firm going to a hearing at the ftc in the 1960s, and he came back and said, i had the feeling that despite all of the legal fire power in the room nobody could state with clarity what the objective of the antitrust
law was or how the -- or which result in that particular case would best serve the objective. that was in the 1960s. well, that, gentlemen, became the assistant attorney general for antitrust under ronald reagan, and announced that the policy going forward for anti-trust enforcement would be if it doesn't make economic sense, it doesn't happen. fortunately, that has allowed a consensus, bipartisan consensus about antitrust enforcement to gel, consensus which remained essentially unchallenged down to the present day. so on the vast majority of questions that come before the commission relating to its competition jurisdiction, there is tremendous unity in the way that problems are approached. i won't say that the decisions, the recommended decisions are always identical but the consensus is the overwhelming
rule even now with the split commission. >> actually to expand a little bit. i agree with tad. i think the same thing is found in the consumer protection side of the aisle. a large percentage of the cases that we bring are cases involving fraud, scam artists and the like. and frankly it doesn't matter whether you're a liberal democrat or conservative republican, nobody is in favor of fraud so a lot of those cases going forward you don't have the kind of split you may have in more sensitive policy issues. so there is a core of agreement on principles and cases that are not likely to give rise to splits. much like there is on the antitrust side through some of the emphasis that tad discussed. >> thank you both. any other questions from the audience? taking questions right now. >> question for tad. the smarter act has been make its way. >> introduce yourself.
>> ted from the free state foundation. so about the smarter act, standard merger and acwhich vision review through equal rules. what is not standard and should they be more standardized with or erj merger reviews? >> well, the legislation is a response to a specific divergence in the way that ftc cases, merger cases, and department of justice merger cases have been handled. the department of justice has no authority whatsoever to determine that any party has violated the law. the only thing that the antitrust division can do when it believes a merger is illegal is present a case to a federal district court by way of complaint. the court makes the decision. subject to appeal of course. now, the federal trade commission has the same options. but they also have the authority to conduct their own administrative procedure where an administrative law judge
hears the case from the ftc and the parties respond and then that makes an initial decision which is then reviewed by the federal trade commission itself. and then there's an appellate process. so it has given rise to a tremendous difference or a potentially tremendous differences in the way -- in the way the procedure's handled, the length of the proceeding and so forth. in recent years, we've had this additional problem. there's been a kind of dissidence that because the precise statutory provision that sets the standard for the award of a preliminary injunction in an ftc case has kind of drifted away from the traditional equity standard that applies to the department of justice cases. the smarter act is addressed very narrowly, as i understand it. and not talking about any specific embodiment of the legislation, any particular bill, but the idea of the smarter act has been to narrowly target that difference.
so that two parties who want to engage in a transaction, the -- they're not subject to this tremendously disparate treatment as to the injunction standard and the procedures, the length of the procedure that applies. depending on whether the department of justice are the ftc reviews their merger. there's officially no fixed rules on which agency. there's an informal clearance process that the outcome of which cannot be predicted in any particular case. so that is i think what the smarter act is all about. i'm a supporter of the smarter act. i don't believe that the -- i know that acting chairman olhosen is in favor of what i just described as the main features of the smarter act but i don't think the commission has specifically said anything about any particular bill or piece of legislation. >> thank you. and that will conclude this panel.
and we're going to move right into our closing remarks. so please stick around. [ applause ] >> i want to thank my colleague, seth. for monitoring that panel. and tom and tad, thank you, both, for being here. and i want to especially thank daniel lyons, professor lyons, for being here. every time he participates in a free state foundation program, he reminds me, again, of why it's such a pleasure to have him, so thank you, to daniel. so daniel, is a member of our academic board of advisers. and our next speaker, michelle connolly, is as well. a longtime member of the board
of academic advisers. professor connolly, i should say michelle connolly, is also the professor at duke university, you know, i'm not going to say anymore about duke. i mentioned that earlier. but i'm always -- additional bonus to have someone from duke. she's a professor in the economics department at duke university. again, her full bio is in the brochure and it's on our website but i guess maybe the only other thing i'll point out is that she served, as did howard chalinski, who led off our program today. i think the only one who held that position who did it twice, two different terms, so she must have done an awful lot right the first time around. so finally, before michelle, and michelle's going to offer some final remarks here to conclude
the conference and the only other thing i'll say is that i mentioned when commissioner pahl was here, our book, communications, law and policy in the digital age, the only other plug that needs to be given about this book is that professor connolly has a chapter in it, which i hope she remembers. it's on spectrum auctions, how they should be conducted properly to best serve the public and consumers. so that's another reason why you might want to take another look at this book. with that, i want to call on professor connolly for some brief remarks to -- i think we called this final thoughts in our brochure. professor connolly. >> thank you. so, randy first reached out to
me just as i was about to leave the ftc for the first time and the free state foundation was just getting off the ground. i was a little surpriseled at how ambitious he was but i have to say i really underestimated his abilities to create such an important organization and have such an important role in current policy in d.c. i like -- i notice the tag line as i walked in. it says because ideas matter. i agree with that tremendously. that's why i wanted to become a professor. that's why i went through the grueling -- well, i shouldn't say six years in grad school, but it took me that long to become a professor is why i have become involved in policy beyond just being in academia because i think the ideas matter. i think it matters that people who are somewhat outside, don't have personal interest in certain outcomes, lend other voices to the discussion. so this is the final thoughts or
it reminded me of "saturday night live's" deep thoughts. i thought i'd focus on two deep thoughts. i'll be short, but i will give you a little bit of detail for each one. so the first one is that the fcc is in very good hands right now. i believe that absolutely. and one of the things that makes me say that is as we heard at lunch chairman pie is talking about economics and data at the ftc. it's a very important reversal, especially from the last administration, where economists were essentially ignored most of the time, and not even spoken to. the importance of having good analysis so that policy can't be made while ignoring the actual economic costs altogether, as
well as any possible benefits, is important. so i'll get back to that. secondly, i'm very happy that he -- that chairman pie is working on clearly defying what the regulatory role of the ftc is. so in this sense, the ftc is in good hands. but my second deep thought is unless something is fundamentally changed, unless congress takes actions to support many of the things that chairman pie's doing now, this can be very short-lived. let me go into a couple details related to this. so one in terms of economic and data. i've been studying with some students the spectrum policy, spectrum auctions, since 1997. one thing we discovered is since 1997, of all of the licenses related to cellular services, half of them have been won by small bidders. half.
so this means that we have a policy which is giving bidding credits to 44% of people winning the auctions for spectrum. our scarce resource. and another 14% are being won in auctions that are set aside only for small bidders. and almost 10% have won in set-aside auctions and using big credits. but if you look at the combined total, that means 50% of our spectrum for cellular services since 1997 has been allocated to small firms. it is not clear that this is really being imposed -- the intent to help small entities and to help competition is really being carried out in our current set of fcc auction rules if this is the outcome. in an industry with very high infrastructure costs, forcing this scarce resource into the hands of a smaller entity simply
isn't making a lot of economic sense. without looking at the data, no one's really noticed this. in terms of the title 2 regulation, there's a similar argument here. that it was justified open the grounds of monopoly power. this was justified, despite the fact the title 2 regulations were imposed on both fixed and mobile. it was justified despite the fact the ftc's own data showed that as of 2014, 978% had provided a minimum of 10 m megabytes. once we have enough competition, then the issues with the concerns related to net neutrality disappear, which might have also suggested they weren't there to begin with.
i also have to focus on block prioritization. which i think is the most harmful of those other than the general content, conduct standard. this rule was imposed despite the fact content service providers might be creating congestion. this rule was imposed despite the fact that content providers might prefer, might find is profitable to pay for paid prioritization. there are content delivery net works in existence hired by content service providers in order to speed up the rate at which their content is coming in. so this policy as imposed with the title 2 regulations, i'm going to steal from michael katz, he actually called it anti-many could petition regulation. basically, you are harming differentiation between different content providers and content services. our service providers. so there really is a difference between something being intellectually free and being
economically free. or another way of thinking of it is one might be interested in open internet. that doesn't mean a free internet. consequences we've already seen, we know there's going to be reduced investment. it is obvious both from a theoretical perspective as well as an impeempirical one. there are been several studies. also did a study showing a fall not just in the rate of growth of investment but in absolute decline in the level of investment. which is very suggestive of regulatory uncertainty. the consequence of this is going to reduce deployment. reduced deployment is going to lead to reduced competition. we can have reduced quality of services. what i think is particularly interesting when we talk about the issues related to the digital divide is the areas where this -- that the markets are going to be hit most by this reduction investment are going to be the economically marginal
market it is. so if we care about access and adoption, these are rules that are going to make that much more difficult to have and much more difficult for the digital divide to be reduced in the economy. one thing that was not mentioned today is something called the waterbed effect. that's also where the title 2 regulation with the no paid priority regulation is essentially an implicit subs disc forced on to the internet providers and given to the content service providers. in the waterbed effect this subsidy can be passed on to the consumers. that's passed on in the form of either higher prices and/or decreased quality. so, again, while the policy was intended for many different things, one of the impacts is directly on the consumer. and within the issues of the digital divide, this -- by pushing up average prices for average consumers is, if
anything, going to marginalize more people who have less income. so the big picture. now, my deep, deep thoughts here. uncertainty that is created by vague and continuously changing regulation is a huge disincentive to investment. unless congress explicitly states that an agency does not have authority over a particular market, at some point someone heading such an agency will make a regulatory grab. so i'll geek out on you. in grad school when we were talking about fixed exchange rate policies, they would say the following. within finite time there's 100% probability of a fixed exchange rate failing. what i'm saying is within finite time, there's 100% probability of someone making a regulatory grab if they are not prevented from doing so. this grab, when it occurs, will occur without proof of harm from
hypothetical risk and without any credible analysis of the economic cost of such a regulation. so i absolutely support chairman pie's market based approach and desire to move to light touch regulation, but i do feel that without some kind of congressional action, this approach may only last as long as chairman pie's chairmanship. i guess the good news is technological process can make certain restriction, certain regulations become irrelevant. the bad news is if you have built in these catch-all rules like the general conduct standard, then regulators can easily make new or random rules and actually help further slow future innovations. but i guess the best news is people like frannie mae and the free state foundation helped open up these discussions, bring very relevant speakers from the different areas. and keep us on task for that.
so i want to say thank you, again, to the free state foundation. today's event was quite spectacular. and what you guys do every day is quite spectacular. and the food is really good. >> i know my wife especially appreciates some cathy baker, that last remark, because of course they had most to do with that. but what i want to say, really, is that having you here and listening to you is just another illustration along with daniel lyons, both professors. as to why i'm so proud of our board of academic advisers. so both of you make me very proud to have you part of the free state foundation. and, you know, so you know i'm about to end and i want you to stay seated just a moment. but we really should properly
give michelle connolly a round of applause. [ applause ] because those really were deep thoughts and important thoughts and not just final thoughts. so all i want to say really here to end up is for those of you who were with us at the beginning when i welcomed you this morning. those of you in our c-span audience, you know, i said, well, every year, i say that our annual telecom policy conference just keeps getting bigger, better and more impactful. and i said i was going to keep on saying that as long as it's true. so, you know, i'm really in my mind, and i hope in your mind as well, really, i think this was
our biggest, best and, you know, i like to think they're all really impactful. that's what we all strive for. hopefully, this was as well. i want to thank you for being here. we all always welcome your ideas and input. of whatever kind. and we especially -- i consider, you know, there are a lot of battles that become ideological and that's the way they should be, because they're different philosophies and i appreciate that. but i consider people that are working on those issues friends. and i appreciate your being here. look forward to seeing you at the next free state foundation conference. thank you very much. [ applause ]
this holiday weekend on american history tv on c-span 3, saturday at 6 p.m. eastern on the civil war. historians discuss new york city during the war. from divided political loyalties to its southern economic ties. and the 1863 draft riots. >> it seems clear that these draft riots really were a kind of organic perfect storm. of resentment that had been building maybe for half a century. john, you were saying this was not so much an irish riot or, you know, ethnic riot but a working man's riot, the largest in our history. >> sunday at 8 p.m. on the presidency. phillip levy discusses locations associated with george washington's life. including riverfront land on virginia's northern neck, long thought to be his virginia
birthplace. >> george coburn washington had sold the property off, so he was sort of distancing himself. there were still family stories about the land but they were getting fewer. the washingtonens themselves, thislineage, were living more distantly. there wasn't a lot on the land to recall where the buildings were. >> monday at 8 p.m. eastern on reel america, the 1997 documentary men of bronze about soldiers of the all black 369th u.s. infantry regiment known as the harlem hell fighters. >> turned in all of our equipment. like cantin is, rifles, army belts and our helmets. which were french helmets, french rifles, french ammunition, french cantin es. >> pulitzer prize winning
historian david mccall la talks about how the founders, particularly john adams, valued education, viewed slavery and persevered in the face of hardship and how these eye yee s ideals shaped american society. >> he grew up on a farm where they had no money. his mother was ill literate. his father could sign his name. maybe could read because there was a bible in the book and that was the only book. and they worked hard every day. from childhood on. but because he got a scholarship to this little college in cambridge called harvard, and as he said, discovered books and read forever, he became the john adams who helped change the world. >> for our complete american history tv schedule, go to c-span.org. >> congressman, researchers and
health care professionals discuss the u.s. opoid crisis. also the republican's health care replacement plan and funding for opoid addiction treatment. hello. all right. bear with me here. i have all of this technology in my hands. thank you for coming today. welcome to "the washington post." i am mike sabonus, i cover congress for the post. we're here to discuss the nation's opioid crisis. i know i don't need to tell people this this room about the scope of the crisis, the victims, family, doctors, public health officials, journalists like me and lawmakers like these fine folks have been spreading the word about what's been going on, and we're going to begin our program today with a discussion t