The Free State Foundation

On May 13, 2008, Free State Foundation President Randolph May announced the addition of five new members to the think tank’s Board of Academic Advisors. Like the initial group of Board members named in January, each of the new members is a distinguished scholar. The new members are: Ellen P. Goodman; Stan J. Liebowitz; Bruce M. Owen; Glen O. Robinson; and Steven S. Wildman. For the full press release, click here.

In a paper released on May 1, 2008 by Bruce M. Owen, a member of FSF's Board of Academic Advisors and one of the country’s foremost regulatory economists, asserts that “regulation of the media reflects not merely broad acceptance of, but insistence on, political rather than market-determined outcomes.” In The Temptation of Media Regulation, Professor Owen demonstrates that there is no justification for the Federal Communications Commission to require unbundling of video programming at either the wholesale or retail level. With respect to the FCC’s current consideration of mandatory unbundling regulation at the wholesale level, after examining data from large and small suppliers of cable network programming, Professor Owen concludes: “Taken together, these studies offer striking evidence that it is not industry practice for suppliers to make ‘take-it-or-leave-it’ offers requiring small cable systems to take all or none of their networks….The FCC seems to be basing a proposal to regulate wholesale bundling of cable networks on a severe misapprehension of marketplace behavior.” For the press release accompanying the release of Professor Owen's paper, click here. 

FCC Commissioner Deborah Taylor Tate and an outstanding expert panel will be featured at a Free State Foundation seminar on April 28, 2008, at noon in Room 2322 of the Rayburn House Office Building. The seminar, entitled "Reforming Universal Service: What Should Be Done and How to Do It," will discuss what should be done on a short and long-term basis to reform the universal service system. Program details and registration information may be found here.

In a new study released today by the Free State Foundation, Professor Dennis Weisman criticizes the Federal Communications Commission for in the past “crafting regulatory rules that focus on the control of market power rather than on unleashing the power of markets.” In his paper, “On Market Power and the Power of Markets: A Schumpeterian View of Dynamic Industries,” Professor Weisman poses this fundamental question: “[W]hether most economic regulation of the telecommunications industry – given the rapid rate of technological change and increasing competitive intensity – is still justified.”  He concludes it is not. Professor Weisman explains that, “it is important that policymakers recognize that some of the highest social costs of excessive regulation are likely to be those not directly observable: welfare losses from innovative new services and production processes that are not developed but would have been otherwise.” Read the full press release here.

On January 29, 2008, Free State Foundation President Randolph May announced the think tank's first Board of Academic Advisors. The panel’s members, each a distinguished scholar, are: Robert A. Anthony; Gerald W. Brock; Diane M. Disney; John F. Duffy; Richard A. Epstein; Alfred E. Kahn; John Mayo; James B. Speta; William Van Alstyne; Eugene Volokh; Dennis L. Weisman; and Christopher S. Yoo. The full press release announcing the Board is here.

In a major new scholarly paper, titled “Bundles of Joy: The Ubiquity and Efficiency of Bundles in New Technology Markets,” noted economists Stan Liebowitz and Stephen Margolis explain, in terms highly accessible for even the lay reader, why “market foreclosure, the principal efficiency concern with tying and bundling, is likely to be exceedingly rare.” The Free State Foundation study by Professors Liebowitz and Margolis is published as part of the “Perspectives from FSF Scholars” series, now entering its third volume. Based on their study, the scholars draw the following conclusions: (1) bundling not only occurs frequently, but “it is pervasive in the economy and is the dominant form of sales, for reasons that have to do with efficiencies of a simple and obvious nature: most goods are bundles;” (2) “the conditions required for tying or bundling to create monopoly power for reasons other than product improvement are very restrictive;” and (3) in light of the first two, all proposed unbundling restrictions “should require a demonstration of a high likelihood of actual exclusion and the absence of an efficiency defense.” More pointedly, Professors Liebowitz and Margolis conclude that “telecommunications policies that implement mandatory unbundling should be reconsidered or abandoned.” The press release accompanying the release of the study is here.

On December 13, 2007, the Free State Foundation released the opening Keynote Address delivered by U.S. Senator Jim DeMint (R-SC) at the October 30, 2007, policy conference sponsored by the Free State Foundation and the Institute for Policy Innovation. The publication is part of the “FSF Distinguished Speaker Series.” In his remarks, Sen. DeMint warned: “[T]he instinct of legislators and bureaucrats in Washington is to use the possibility of future problems or relatively isolated issues as a reason to preemptively regulate markets.  Much of this meddling stems from a vague notion of the “public interest.”  I would argue that the public interest is in free markets.” Sen. DeMint is an influential member of the Senate Committee on Commerce, Science, and Transportation.  In the 109^th Congress, he introduced the “Digital Age Communications Act,” a paradigm-changing bill which would reform our communications laws in a way that regulatory authority no longer would be tied to outdated techno-functional regulatory constructs, but rather to competitive marketplace realities.

As part of its “FSF Distinguished Speaker Series” publications, on November 26, 2007, the Free State Foundation released the luncheon Keynote Address delivered by U.S. Representative Marsha Blackburn (R-TN) at the October 30, 2007, policy conference sponsored by the Free State Foundation and the Institute for Policy Innovation. In her remarks, Rep. Blackburn said: “It should be the free market that decides what works and what does not work, not government intrusion.  And, as the process unfolds, it is going to be critical for the United States Congress and for the Commission to hold the line on light touch regulation.  And to resist the urge to unbundle what is already working in the free market system.” Rep. Blackburn is a member of the House Committee on Energy and Commerce, as well as serving as Assistant Minority Whip and Communications Chairman for the Republican Study Committee in the House. She founded the Congressional Songwriters Caucus. The full keynote address is here.

The Washington Post quoted FSF President Randolph May in an article concerning communications policy issues in its October 2, 2007 edition. Read the full story here.