The Aspen Summit kicked off last night with an address by FCC Commissioner Adelstein, who got 3 out of 4 issues right in his quite engaging speech. I say that teasingly, because the Commissioner's speech once again reaffirmed that digital issues do not necessarily break down along neat Democratic/Republican political lines. Commissioner Adelstein addressed four topics, urging less regulation on three. On multicast must-carry, cable a la carte mandates and indecency regulation, the Commissioner urged caution, restraint and reliance on markets rather than regulation. Despite these laudable positions, the Commissioner remains steadfast in his defense of media ownership regulation. Nonetheless, not a bad opening batting average where he and PFF fellows agree on 3 of 4 major FCC issues.

Well, it isn't exactly a heroic ride off into the sunset with the background of the Monument Valley (yes, I've watched John Ford westerns far too many times), but next week marks the end of my tenure as President of PFF.
I am humbled by the well wishes from those with whom I often disagree, Professor Lessig and Jeff Pulver. Even more, I owe thanks to the many colleagues and friends I have made these past years. DC is a place where cynicism can easily thrive, but there are also many thoughtful, principled folks who are struggling for the right answers within the often disspiriting insititutional situation.
I do think we did some things of real value while I was at PFF -- the Digital Age Communications Act, the Institute for Regulatory Law & Economics, the founding of the Center for Digital Media Freedom and the blossoming of IPCentral.info, to name just a few. These programs, and the dedicated folks who make them possible at PFF, will continue to thrive and grow. The cynics' eyes will roll, but I have been privileged to work with wonderful colleagues whose devotion to human liberty is complete and unfailing. Though there are practical imperatives for any institution, the think tank world is really a place for dippy idealists who believe that ideas matter.
With this reverie going on way too long, I think I'll go watch the Searchers again.
I am not going far -- just to the less managerially taxing role of Senior Adjunct Fellow. In the meantime, look me up in my new gig here, where we'll try and change the face of regulatory, competition and IP law from the inside out (cynical snickers welcome here).

Common Cause has taken out after PFF, among others, for accepting support from, of all things ... corporations! The longer I've been at PFF, the less plussed I am by these periodic attacks on our credibility. But this one is particularly weak in its tendentiousness and selectivity.

The breathless expose purports to shed new light on the "astroturf" campaigns engaged in by communications corporations. For PFF, this heroic Common Cause sleuthing must have taken at least 15 seconds navigating our web site to our supporters page. But the bombshell revelation that we accept corporate donations kind of falls flat because we tend to have supporters on both sides of many issues: net neutrality (Cable/Telephone companies AND Microsoft and Google); franchise reform (Cable AND Telephone Companies); Spectrum Reform (Wireless Cos. for property rights AND Intel and Microsoft for commons); content and liability (Verizon AND the RIAA). This inconvenient fact would ruin a good, straightforward "they are slavish toadies" storyline, so Common Cause chooses to elide that and only point to supporters whose positions they don't like. In other words, the funding issue is only being used by them as a proxy to forward their substantive position in the underlying debate. It is a species of intellectual laziness, at best, or dishonesty, at worst.

Two weeks ago, my colleague Randy May posted a short critique of the principles announced by Senators Burns and Inouye to guide video franchise reform. Randy called for reform. Wouldn't you know it? A half dozen senators released a new set of principles just in time for the February 15 Commerce Committee hearing on the issue. The Senate hearing came on the heels of a filing deadline at the FCC for a NPRM soliciting input on franchise authority. What will come of all this activity? I sure don't know, but read below for the briefest of scorecards on who is saying what on the issue.

Over at the Disco-Tech blog, Bret Swanson is not impressed with the latest action of the Indiana Utility Regulatory Commission.

What's worst: Requiring cost studies from all firms that offer anything more than a standard voice service in order to establish price floors.

When I wrote about Indiana here, and here, both legislative offerings emphasized phased deregulation of prices. Obviously, the IURC went a different direction after the legislation failed.

A new policy bulletin published by the Phoenix Center tackles some of the issues around franchise regulation. The study addresses revenue problems faced by local government that may result from proposed changes to the current franchise fee system. George S. Ford and Thomas M. Koutsky authored the paper. (Several years ago Ford collaborated with Tom Hazlett on an excellent paper that showed empirically why "level playing field laws" had anti-consumer effects.)

Ford and Koutsky assume that franchise fees will continue to apply to gross revenues. They assume that franchise regulation will be maintained. And they conclude that new franchise revenues will result from wireline telecom firms entering the video marketplace. Time will bear out their first assumption. The second assumption may be well founded: Franchise regulation is likely here to stay but is by no means necessary. Their conclusions are worth noting. First, they find that successful wireline entry into the video market will increase revenue collections by as much as 30 percent. There is a little math involved but basically new entry drives prices down and with lower prices, more consumers are willing to buy video services. As a result, total gross revenues increase. To maintain the same level of revenues, the cap on franchise fees could be dropped from 5 percent of gross revenues to 3.7 percent, according to Ford and Koutsky.

I'm not convinced that the political attractions of a revenue neutral policy should outweigh the virtues of reduced regulation and taxation for all market participants - elimination of the franchising regime - but I can certainly agree with the final conclusion of Ford and Koutsky, namely, for consumers to see any "competition dividend" the current franchising process must be reformed.

The Public Interest Institute - a mainstay for policy research with a limited government bent in Iowa - has published a study by Richard Wagner on the Verizon MCI deal. It is not every day that I come across a policy paper on mergers with references that extend from Copernicus to John Maynard Keynes to Karl Popper, but this paper does.

When it comes to the merger, Wagner is for it. To my mind, his approach to dynamic change in the market is well explained and the following passage is essential.

That habitual pattern of thought contained several particularly important and confining features. One was that telephones are instruments by which people speak to one another over wire-based connections. Another is that telephones and televisions are distinctly different instruments used for divergent activities, and with computers being yet a third distinct instrument. If this old fashioned pattern of thought is applied to the Verizon-MCI merger, it is possible to think that the primary difference between the pre-1984 situation and the current situation is that the national monopoly has been replaced by four regional monopolies.

To reach this conclusion, however, is to ignore all of the technological and commercial innovations that have taken place that have changed the characters of telephones, televisions, and computers, and of the enterprises that deliver those services. Competition has generated massive technological change, and those changes in turn have generated similarly massive changes in the organization of commercial enterprises. This relationship between changing technology and subsequent changes in the commercial landscape is simple to see and easy to understand.

Governor Perry has called the Texas legislature together for a special 30-day session. The legislature can only consider items germane to the reasons he lists for the special session. When the regular session concluded, major communications reform had stalled and it is still unclear if he will add communications reform to the "call," but if he does, legislation is likely to pass. Hats off to Adam and Ray; their paper recommending how to move state law toward competition policy still has currency in Texas even as nitty gritty lobbying has moved conceptual discussions to the side.

Last week I joined John Rutledge , TPUC Chairman Paul Hudson and Bill Peacock of the Texas Public Policy Foundation as a witness at a hearing on general reform and the idea of a statewide franchise system for video providers. The statement is here and a paper on franchises is here. The hearing webcast can be found here (see Regulated Industries 6/30). While I did not make it to Antone's for blues, I did catch a live bluegrass performance at the Austin airport.

As reported in National Journal's Tech Daily and TR Daily [subscriptions required], key staff and their bosses continue to predict that Congress will roll out telecom reform quickly over the coming months, rather than over the years predicted by conventional wisdom. Further, certain Congressional committees are reportedly trying to minimize the need to share control over telecom reform. Thus, one can add timing and turf battles to the list of reasons why policymakers and hangers-on should focus more on narrow approaches to telecom reform, at least in the near future.

While D.C. basked in the first convincing evidence that Spring will soon take hold, a group of Congressional staffers crunched through repeated dustings of snow on their way to classes in Aspen, Colorado. The staffers were few in number but decidedly well-placed and bipartisan, representing key committees and offices in both the House and Senate. They had agreed to devote part of their Easter recess to participate in the Federal Institute for Regulatory Law & Economics, hosted at the famed Aspen Institute. The Federal Institute was modeled after a similar program for state regulators that PFF launched successfully last year, in conjunction with our academic partners at the University of Colorado's Silicon Flatirons Telecommunications Program and George Mason University's Interdisciplinary Center for Economic Science.