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tv   The Communicators Thomas Hazlett The Political Spectrum  CSPAN  August 20, 2018 8:01am-8:36am EDT

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>> c-span, where history unfolds daily. in 1979 c-span was created as a public service by america's cable-television companies and today we continue to bring you unfiltered coverage of congress, the white house, the supreme court, and public policy events in washington, d.c. and around the country. c-span is brought to you by your cable or satellite provider. >> host: your new book is
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called "the political spectrum: the tumultuous liberation of wireless technology, from herbert hoover to the smartphone." is this written for the layman transit absolutely. it's not a hard read but a lot of stories about where we are now and how we got here in the wireless world. we are all in the wireless world now. part of our daily life and it's quite fascinating how we got here, the politics of it and have 1927 radio act basically determine what would get into the market, what wouldn't and then have reforms have led to pretty amazing is that we're dealing with today and we carry in our pockets. >> host: what is your expertise to write a book like this transit i'm an economist i don't hold any patents in the mobile space and time looking at all just the great innovation, but i look at it from a policy standpoint. i'm a professor.
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i service chief economist for the federal communications commission and i have written and researched how we allocate greater spectrum, the airwaves they go into wireless communications for about 30 years now. >> host: do we do it efficiently? >> guest: that's a great question. how much time do we have? were getting something a lot more right than we used to. the basic framework of the system which comes from the 1927 radio act act which was the brainchild of herbert hoover before he was president he was secretary of commerce. he was the first regulator of radial and one of the more discretion to the government licensing process over what got out in the radio world. he wasn't really that concerned about being a traffic cop which had already been solved more or less, in a reasonably but he wanted more government discretion over who got to broadcast and what they said. the radio industry at the time, the major commercial stations, and wanted a similar system and
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they wrote the basic language, the public interest standard that goes into the 1927 radio act. and for decades lots of new technology tries to get in the market and has a hard time. we worked through a lot of that with a lot of carnage in terms of what competition is allowed. one of the great stories in this sector is edwin howard armstrong, the inventor of a lot of a.m. radio which was big in the 1920s and starts are wireless world, but he's also the inventor of fm radio which is a huge improvement in the 1930s and it takes in about five years just to get out with his radio technology to serve consumers. he starts out and then stops and, in fact, is demolished like a reallocation by the regulators bending the new television interests and other politics. and, in fact, edwin howard armstrong which had the superior
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rated technology, really didn't slurpeserve to have radio waves devoted to it, he ends up committing suicide in the early 1950s as a result of of his frustration over his great innovation being throttled. in fact, widely in th the 1960s fm radio is allowed, liberated and allowed to compete with a.m. radio. within a few number of years it totally dominates because his superior sound quality. the high fidelity comes to the marketplace, fm radio stations by 1975 are becoming dominant over atm. at the end of the day if it led to see this he would've been a lot happier man to see that his great invention got to the market. that's the tragedy. the inefficiency of the old system. what happens over time though, '70s, '80s, '90s in the u.s., in fact, around the world for reasons that are still somewhat mysterious to political
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scientist or economists, there is a major redirection and it is certainly an incomplete journey that we've come a long way since we were in the 1927 radio act. and the fact with major wireless players today like the mobile carriers, they have great discretion over how they create the networks, what technologies they use, unlike armstrong, they don't have to ask the government, the federal communications commission can i get a new radio? can you put this out and use radio waves? they compete with each other to come up with new devices and your networks and new systems, new applications. example use in the book is the may 2000, a very innovative company in cupertino california's coming up with the think it's a better cell phone, and steve jobs has a vision that the mobile devices where using
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our old school, lousy, they just don't do anything and it comes up with something that costs a lot more but it's beautiful. it's sleek, efficient and does 1 million things the old phone to don't do. literally he puts together a phone that has over today over a million mobile apps from the app store. he gets competitors in the google space heading off the apple competition with its own version of this, and all this comes into the market. you can see it in the whole tech sector today, the great ecosystems, all these new products with a be the mobile phones or the applications, networks that right over them, it comes in because there's no central authority in a mother may i mandate, gets to determine exempla technology is used of what services are offered. you get competition in the marketplace. you get entrepreneurs being able to test their ideas come if they can raise the capital and
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convince customers to buy, they are the next big thing. whether it be applications such as an uber or facebook or whatever you find in the mobile ecosystem, everything from angry birds to spotify all this innovation comes in in a way that just, they could not in the '30s, \40{l1}s{l0}\'40{l1}s{l0}, '50s and 60s, and that has to do with the major liberalization. long after question, is it efficient when we advocate spectrum, it's a lot more efficient than it used to be. we have proof of concept the competition in these markets can work beautifully if the rules are crafted right. now we know what direction we should head. we have really only scratch the surface in terms of how much spectrum we hav put out in this liberal way. most, the great majority of the airways that a highly valuable to communication are still squandered. they are allocated to things that were set aside 50, 60 years
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ago. the technologies are gone. the applications are moved, but with blocking a pretty amazing new stuff that waits. we need to come up with better mechanisms. a lot of my book is devoted to talk about things regulars can do to unleash even more of what we already have shown and coming without the micromanagement of a federal communications commission in washington. >> host: so regulatory framework is sometimes used to protect the existing players? >> guest: it's hard not to be a little bit facetious in the answer, occasionally. it's been known to happen. and, in fact, the origins of the system really date, we are talking about to an initiative that was very much, not just the regulators by cooper and members of congress of the senate that wanted more political discretion what becomes a political spectrum, but was also the major radio broadcasters literally informing the national
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association of broadcasters in 1925. the immediate pass a resolution saying we want a public interest standard to have license. not just where going to compete and play fair and obey the antitrust laws. we want an actual exclusion of those companies that do not meet the public interest tests. and, of course, the major companies that had lots of market share, big wide audiences, uncontroversial programming, they were thought to have an advantage and the fact we got regulation they did have an advantage over the smaller voices, the keeping voices. we noticed immediately literally in the late 1920s after the 27 radio act that stations that have point of view are squelched in the licensing process by the regulators and they say to chicago, owned by chicago federation of labor as a prolabor viewpoint, left-wing politics, they're very upfront about it, they are actually cut back in the hours and
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constrained and threatened as aa propaganda station. this is regulatory language, u.s. government telling point of you know, the airways are for anybody coming the big general, broad homogeneous corporate broadcast view. so that becomes the standard and a lot of those voices left and right are squelched in the radio broadcasting road and that carries over in the 1950s, '40s and and 50s to broadcast tv licensing. and even in the 1960s when cable television began to come in and compete with broadcast television which just narrowed down to three national networks, very little competition and almost no real heterogeneous viewpoint at all, as the same news and, in fact, there's a wonderful book that i cite the title of that place off in the 1960s, the president of cbs
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news boasted that they did not viewpoint when to deliver the news at cbs. in fact, the president of cbs news boasted that we present the news from nowhere, and that was it. the news from nowhere. you didn't get competition. you didn't get debate. what finally happened is that the broadcasters lobby to keep cable out the ones to give more capacity to the broadcast space, through wires, and that is squelched for about 15 years until the late '70s. the deregulation wave undoes that and that some of the progress we've made it by the early '80s you're getting america wired for cable, c-span, cnn, fox news, cnbc, the bbc america, all kinds of informational programming comes in, was literally a limited by regulation. hundreds and hundreds, over 1000 cable channels now that are
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delivered both through cable, satellite in the old systems that came in finally really in the '80s and '90s. in the new systems over the top websites available through broadband access universally. the new rules are much more open, much more competitive. you don't have to have license from the federal government be c-span or to be a website delivering content. in the old system you had to have license for your station that made the national networks, and those licenses were constrained to not be controversial through the regulatory public-interest process. as i say say we've made a lot of progress and we've opened up these markets. it's not all pretty and there's a lot of stuff. all of of us objective but that's we get with competition, innovation and the united states with the first amendment. >> host: how was the reasonable back of the net neutrality affected competition and our ability to hear voices? >> guest: that's a great
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question, and in the book i talk a little bit about that regulatory margin because net neutrality has been applied to some degree prospectively or, in fact, on mobile carriers but there's not that much on it. the current concern and back and forth over the last decade we've had at least three complete shifts in going to a net neutrality rule enforced by the sec and away from it with court decisions or this case now and election and a change of opinion at the federal communications commission. so with the evidence says. that has been a background struggle that has come to the fore because importance noted in broadband again both in the mobile space and enough fixed world of fiber and cable and other technologies competing for the home and residents. i believe the evidence is strong that the net neutrality rules are not effective in promoting either competition or
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investment/innovation in the transport space but the actual broadband capacity space. we see that historically where to get the internet world, the broadband world that we like, delivers a lot of content in an open and some would call a a neutral environment although that's a confusing description of what happens because there's a lot of network management that is not neutral, and consumers want it. ip administers a university wanted. they want to make sure the never to open for the users and not congested. the fact is there has been a lot of historical effort by regulators under both parties at the federal communications commission to strip away what's called common carrier regulation, or title ii, of the three fortifications act. some people call that net neutrality today, but we had to strip that which is to get innovation in the market place
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like the old aol 20 years ago, 20 or more now, to get the innovation from the new isp, internet service providers, to get voice over internet. way to do away with the phone company requirements for companies like skype and other still living voice over the internet. it's been an opening of the market through a deregulation. there's always been an antitrust backdrop to that, for over 100 with that rules against anti-competitive discrimination, what's called in the legal literature vertical foreclosure which is the way that people who were worried about isps using the market power to foreclose competition or exclude rivals talk about this. that's always been illegal but there has been a lot of action in the front anything that's because there's been a pretty reasonable market development most of what's happened, and antitrust is a way to deal with that, the best way, when there
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is not. >> host: but net neutrality could end up being a side note, couldn't it, especially as we move more and more into the wireless spectrum? >> guest: net neutrality could be? >> host: a side note trent to absolutely. to be blunt, even the most hardened and regulatory rules which we got in the title ii rules in 2015 from the federal communications commission don't would want to take on the commentary rules that historically been applied to enforce neutrality of broadband service providers. a real tough neutrality rule would be very costly to impose. you get a lot of kickback from both consumers and application providers who would see congestion in local networks as a problem. for example, small isps, wireless isps are very much against net neutrality.
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they want to be able to tell customers you can be a residential broadband customer and there are things you can do that are perfectly fine but you can't run a business server from your house on a normal subscription. we have congestion and traffic management issues. the fcc knows that. they did put in reasonable network management as an exclusion. a lot of arbitrate exclusions. for example, they cable operators, when they deliver your video, your voice and your data service to your house, the so-called triple play, often working to what's called digital phone service. that's your voice, fixed line voice service just like the old ma bell fixed voice line but is over the cable system. the cable system does data which is high-speed internet, broadband, and it does voice. they cable operator will reserve a part of that data network just
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for the voice application that you would think the cable operator for. that's highly discriminatory towards other voice over internet providers who don't have access, so whether it be comcast or charter, whatever the cable operator is. they make their platform a little better for the own customers. the fcc did not take that on in the 2015 rule. that that is completely non-neutral. there are a lot of arbitrate exceptions that would be made to accommodate history and competition. in this sense, the competition from a cable operator, so the old ma bell phone monopoly, is a striking success in the regulators are very proud of that and rightly so. it took a long time to get there. you could criticize the past and the timing but, in fact, having a choice with a cable operator, that's the big deal to those of us who grew up with an black at&t phone and who didn't have any choice like that. and, of course, mobile has made that choice much more interesting and dynamic.
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people are going all wireless net as well. it's not like this is the only game in town. in the old world, go back to the 1980s, i did was an opportunity to get a second wire into the house that would provide you a competing telephone voice service, not that is totally mundane. you can do it through your cable operator. millions of us have done that. that's good. that's good. the fcc will not take that on even in the most ardent form of net neutrality. and so did give it net neutrality really is front and center and that's what the concern is, some of us see it differently. >> host: is traffic congestion inevitable? how can that traffic management be improved? >> guest: i mean, obviously it is there. the operators, whether it be cable, phone, wireless, satellite, the tried engine around it and expected to be certain capacity issues. you want to stay ahead of it, you have two price to dedicate to me people using the network. sometimes you do have data caps
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or rules. in the old mobile phone world we had peak and off-peak minutes. they wanted to encourage you to call at night. with mobile being so ubiquitous, teenagers anybody else using phones at night, the peak is a little different than it used to be. but you know, the world is changing so rapidly. we are all on whether the economist or innovators, we are all consumers what's happening in the marketplace and seeing how that develops. the freedom thes of these operas had to did use the spectrum, not of all the rules and technologies baked in and been subject of a time there's a to have to go to washington and go on a long moment to process that can be opposed and lengthened and strung up by your opponents, that's a great advance we have to get to see of these things split with consumers and innovators. >> host: in your book "the political spectrum," one of the themes is our use spectrum and
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how we can use more efficiently. is it unlimited? >> guest: well, if you look at it in some dimensionality, there really is no feeling entrant inf what we can get. in terms of the economic value, this guy is at the limit but in any given technology, in any given state of the world, in any given service or network being used to provide a service, you can bump up. and that is to say, if you go back just a few years you can see forecasts where the idea was that we would never ever need a capacity we have today. but today of course with 300 plus subscribers to cell phones in the united states, and a good percentage if not a majority, a large majority, are streaming high-definition video on mobile devices in all kinds of places, all times of the day and night.
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while a lot of high-definition streaming today is probably netflix and commercial products, any future you can see the will be a lot of other stuff including the whole movie and so forth in some cases but not for some of us. the point is the applications adjust the capacity. they gobble it up. what happens is we always think were getting ahead of the game in some dimension to expand our efficient use of spectrum, and we are, but then innovators figure out a way to use the spaces that we have created. on the one hand, there's no limit to the value we can get. on the other hand, there are sharp limits in how much we can do it at any one point in time in terms of promoting conflicting uses of the same radio space. there are trade-offs to make in terms of if we have more of wireless mobile and more competition between, say verizon and t-mobile and sprint and at&t, in that space, or if we
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preserve airwaves, literally set aside 1939-9053 for over the air broadcast television. that allocation is still for the most part with us. as we sit here today we've got 49 over the air channels, television, reserved for doing exactly what they're supposed to do in 1952 to deliver i love lucy to american households. those days are gone. we use cable and satellite, and effect over the top and the value of the bandwidth now is of course enormously higher to do these mobile applications. in fact, if you say to, i'd cut teenage daughters and i say to them to see that on television? they think i mean netflix. something streamed they can get into the internet and is now on their mobile device computer delivered through the 4g technology that most of the foreign jews or at home on a
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wi-fi connection from our broadband network. that's not television to them as it is defined at the federal communications commission in 1939 and 9052. the regulators have hard time living past that and the fact the regulars know that they have a hard time to be fair, there are a lot of people in washington who do work for the u.s. federal government who are trying, have tried and have had some success in moving airwaves from the old allocation of 82 channels over the air tv at tenn to 49, had to 35 and 2020 if the current transition scheme goes as planned. that's progress, but we will still have 35 channels allocated in what is a vestigial organ today. we don't need the allocation of the postwar world to really be with us today. we need markets and competitors
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to be able to reallocate that spectrum to its highest values used in verse mark and maybe a little lucky we'll get rules in place more and more that allow us to do that. >> host: ten years ago, 20 years ago we talked about long-distance. what of the going to be talking about ten years from now? >> guest: wow, yeah, that is certainly above my pay grade as an economist, at any i can make a guess. you know, you look at what is your starting out in terms of mobile health and personal security and the fact that we do have, on our bodies 24/7 now we have very powerful computers connected to the world, to the cloud, computer servers, doctors, hospitals, police. so personal security already is getting better because of cell phones. studies show that crime rates go down when cell phones come in,
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just as you might expect if you thought about it. medical technology and testing and so forth. why shouldn't we be tested a lot more? why should you find out your blood or something vital signs has a little something to check out when you have sort of a latent -- you got the computer in your pocket right now. why don't you do more of that and have a big data that can come from people get into these, you know, to analytical models and you got the artificial intelligence systems helping on this and mining information that is coming in. i'm very excited about particularly on the health and a personal security, the social networking and connecting, it's also a fantastic revolution that's taking place but it's also hard to figure out. that environment is controversial today for good reasons but it's also very popular for good reasons. it's changing our lives in ways that we want to pay attention to
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and we have to be smart. every challenge to history has had, every advance to history as had these challenges, but if you look at what some economists calls the greater richmond, the economic historians brought out the graph ever really took off in the 1700s, the aching hearts with industrial revolution and all that is come since, and our incomes are phenomenally better than i they were just 300 years ago. if you go forward now with the new amazing communications systems and the way we can mind the data come in from those communications systems, i'm very optimistic. i'm also optimistic that we asked me this question i missing it will be obvious years because we all know that the dynamic change is, by its nature, physical to impossible to predict. >> host: when were you at the sec and what was on the issues you work on? >> guest: i was there in the early '90s as a chief economist,
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and cable rate regulation was being discussed. i had work i did on that. that didn't work out so we have the 1992 cable act that just passed rate regulation of cable, essentially abandoned iv fcc within a couple of years. then in 96 was overturned in the telecommunications act. we issues about spectrum allocation, the big pcs, so-called 2g or second-generation allocation was coming forward. i was on a group that pushed, not one enough for successful enough but it did come to fruition in an allocation in 93 and 94 and get to market, and it was hugely successful when it came out. of course we've had this enormous progress since the middle '90s. remember, in the '80s we'll head two cellular telephone systems competing. that was initial setup set up allocation by the government. and by the way that was extremely controversial.
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because in the '70s when it started in terms of the fcc ruling, the initial ruling by the government in the u.s. was the only a monopoly could deliver mobile phone service. in fact, that monopoly had to be at&t. that's all you could do if you wanted this to service. finally they said okay, we will give one non-at&t company in each market the ability to compete but we will let at&t get one of the license to make sure we can get the services. and two was not enough. we can have many more people in that space, many more firms competing. and around the world we have over 6 billion cell phone subscribers on the planet today. and that's a testament to the fact that not just liberalization in the u.s. has been successful but the idea has spread very quickly to the rest of the regime, rest of the world. every regime out there sees the tremendous advantages. with respect to north korea and
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a very small handful of places where you don't get the more open private competition to what used to be a state monopoly, it really has been very, very exciting, and the future is going to be even more exciting. >> host: is the fcc outdated? >> guest: yeah, yeah, that's a trick question. i would say going back to the 1927, they had a very problematic mandate the way that they micromanage the spectrum and had this mother may i system. it should be much more of a competitive system so there could be rules about who owns what spectrum and what the rights, you know, the rules of the road are. but you're free and open competition with spectrum migrating to to work customers wanted. of the fcc has always had that problem. i can't imagine that it's in the book that in 100 years it will
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be an fcc, it's so inimical to progress the way it is mandated that it is a now and the progress, a lot of it, has come to be fcc doing better and a lot of the regulators have been visionaries. it sounds funny, but bureaucrats can grasp and sometimes really have an important impact in getting openness to the market. they have done better. i think at some point we will figure out, a transition to something much more fluid and much more passive in terms of the basic rules and registrations that have to take place, but i think that the old system is changing and probably, yes, i think at some point it would be a leap forward. >> host: thomas hazlett is for which it comes at the fcc, professor of economics at clemson university and the author of this book, "the political spectrum: the
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tumultuous liberation of wireless technology, from herbert hoover to the smartphone." this is "the communicators" on c-span. >> c-span, where history unfolds daily. in 1979, c-span was c-span was cratered as a public service by america's cable-television companies and today we continue to bring you unfiltered coverage of congress, the white house, the supreme court and public policy events in washington, d.c. and around the country. c-span is brought to you by your cable or satellite provider. >> today first lady melania trump will speak at the cyber bullying prevention summit in rockville, maryland. you can watch it live at 9:15 p.m. eastern here on c-span two. >> c-span buzz has arrived i vote in hawaii for the 39th stop of our 50 apples to her.
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we on the island visiting the capital of honolulu with help of our spectrum cable partners. >> we are very excited to have you in hawaii. i think this is a great opportunity for showcasing hawaii conservation welcome and aloha. >> i want to give up warm welcome to c-span and it's impressive buzz that is going all over our nation. while in hawaii i know c-span will enjoy the beauty, the sunshine and, of course, the aloha of the 50 state also known as the aloha state. i am sure c-span witness and feel the aloha spirit is this bus embarks on its discovery of hawaii as part of its 50 capitals tour. so, therefore, we do hereby proclaim august 15-22nd-2018 as
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c-span week in hawaii. so congratulations to watch more during hawaii weekend october 6 and 7th on c-span, or listen on the free c-span radio app. >> on thursday agriculture secretary sonny perdue was joined by senators lisa murkowski of alaska, ron wyden of oregon maria cantwell from washington state and steve daines of montana to announce a new strategy for improving america's forest lands. this is 40 minutes. >> good afternoon and welcome. i'm vicki christiansen, the interim chief of the usda core service that i really appreciate your attendance here today. we're here today to join secretary perdue usda department of a


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