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Special Review Memorandum
Foreword Who'd have ever thought this all could happen in America, so thoroughly pricking the myth of "American exceptionalism." It wasn't the first hurricane-flooding catastrophe recently. Remember Hurricane Floyd -- and, that prize-winning AP photo of the small herd of North Carolina hogs clustered on the roof of a barn? Or, Ivan or Andrew, of course. But it was pretty bad nevertheless. "The
Firings Will Continue Until Morale Improves… .” But remember. Every catastrophe's different, and they all entail some initial "fog of battle" phase. Not everything that should be done happens yesterday, Here, too, we didn't have any Rudy Giuliani's taking command and control. Instead, we had state and local officials in Louisiana who're clearly out of their depth (in marked contrast to Mississippi and Alabama). That sure didn't help. For heaven's sake, look at what the New Orleans Police Department did! What was it, 200 who just resigned? They seem like the antithesis to the NYPD, don't they? Reminiscent of John Mitchell's famous phrase -- "When the going gets tough, the tough get going." Away. According to NPR's "Weekend Edition," however, most of the serious problems in New Orleans just weren't seen in Biloxi, Gulfport, Hattiesburg, or other cities hit by Katrina. No one in Gulfport shot at rescue helicopters, nobody was raped in a Biloxi shelter, Mobile wasn't turned into a giant trash pile. We're not sure why New Orleans degenerated so quickly. But evidently it didn't happen elsewhere (which sort-of puts the lie to claims that race was a factor, doesn't it?) So should we abandon all hope now? Start taking names for future punishment. Set up block committees to root out the guilty and unworthy? Believe everything we saw on CNN or Fox News? Incidentally, Mississippi Governor Haley Barbour had a great response, when one reporter asked him to comment on the shortcomings of Federal and state emergency responders. "Is this an argument or an interview?" Well, what are some positive aspects of this otherwise terrible situation. Isn't there something we can think and bear in mind to generate those "positive energy," positive thoughts, as Deepak Chopra, Oprah, or even Franklin Graham would urge? Print
& Electronic Media: Doing a Good Job The electronic media did precisely what they're supposed to: They warned and informed the American public. You know, following the September 11th attacks, then after that giant northeastern power blackout, people were polled. They inevitably replied that in the event of an emergency, the first place they turned was "TV." (We're not sure those polled differentiated much between cable and broadcast news sources, incidentally. To them, it's all TV.) Well, this time TV did its job. Newspapers did a good job, too, though, didn't they? The photo-journalism was great. Impressive. We particularly liked the fact that even highly partisan U.S. newspapers didn't spend a lot of time trafficking in recriminations. After all, it's not going to do those poor people in Biloxi, Mississippi or St. Tammany's Parish, Louisiana, a lot of good to say Haley Barbour led the opposition to the Kyodo Protocol -- and, as a result, unleashed this latest "global warming" horror. That can be left to Robert F. Kennedy, Jr., and German "Greens" politicians, can't it? But it does seem to us the U.S. media did a capital job this time -- much as they did with all five Florida hurricanes last year. That ought to be noted.
Telephone, Cellphone & Satellite Thereafter, cellular companies brought in mobile base stations, and encouraged people to send text messages (which are more network efficient). Relatedly, according to today's papers the region was literally invaded by utility repair crews from all over the nation. Quick. Satellite carriers really deserve praise, don't they? CNN, Fox News, and MSNBC made extraordinary use of their camera phones. They're an amazing development, aren't they? Incidentally, we checked and Globalstar's lowest cost service is just $50 a month and, for that, you get 50 minutes (additional minutes are 99 cents apiece). The handset's in the $700 range. But for heaven's sake! The cost is low enough that you'd think more public safety and local government organizations would have them, wouldn't you? Give
Credit to the Geeks, Too There hasn't been all that much written, yet, on how the Internet was used for families and friends to contact one another, or to help handle the logistics of the massive relief effort that's underway. But we're sure this "Information Economy" resource made a critical difference -- and, all without Government guidance, support, or direction. Imagine that! This
Isn't Like Guatemala, You Know Some 3 million people were directly affected by Hurricane Katrina. Not more than 50,000 in just part of New Orleans were the focus of intense media attention. True, the Bush Administration dropped the ball. Among other things, they didn't encourage -- or, facilitate -- media coverage of venues where emergency relief measures were going well. That created the unfortunate perception that the New Orleans "Super Dome" challenges were pervasive, widespread. The situation wasn't helped when CNN and NBC management failed to curb the seriously partisan proclivities of some of their on-air talent. But remember, please. There are about 300 million people living and working in America. The payroll totals 142 million, according to CNBC's Larry Kudlow, guest-hosting for Bob Brinker on "Money Talk," yesterday. The U.S. economy's overwhelmingly the largest, most robust in the world. All the statistics show that. There are tens of thousands of talented, dedicated people on state, local, and Federal payrolls -- all looking for some way to help these folks. At present, Louisiana, Mississippi, and Alabama are the focus of the full weight, power, and majesty of the U.S. Government, committed to making things lots better. Corporate America has made a big-time commitment to help. The President's said everything which can be done will be -- and, the bipartisan Congressional leadership has agreed. And, that's all pretty good, isn't it? You know, if there's one of those giant mudslides in Brazil, say, or some deadly affliction arises in Zimbabwe, who in the world do you turn to? Can you imagine facing a crisis in, say, Indonesia? Remember how those people were utterly incapable of dealing with the tsunami, and depended on outsiders for nearly everything? Here, however, no matter who you are, some Government agency is really going to make an effort to help you, isn't it? Shouldn't that be reassuring? It's
Not Beyond Hope As seen on PBS's "Nova," moreover, Venice has been sinking for several hundred years, as the aquifer it's built on is emptied by manufacturing facilities nearby. But the Berlusconi Government's come up with a solution -- it's these huge steel dams which rise up when flooding threatens. The technology, not unexpectedly, was borrowed from the Dutch. We're not sure it's the entire answer. But Louisiana Senator Mary Landrieu says preserving the wetlands and marshlands and bayous and coast in southern Louisiana matters. Among other things, she explained on Fox News Channel, it'd create something of a buffer, something of a giant sponge. The Senator talked of a $14 billion project -- spread over several years. Oh, for heaven's sake! You mean to tell us that with a better than $2 trillion Federal budget, nobody in Washington has managed to find $14 billion? Believe that?
Conclusion It's not like other countries haven't experienced challenges quite as dire as this, either. Have you ever read the infrastructure assessments of German and Japan after the Second World War, for instance, or thought how the Leningrad/St. Petersburg city government coped? Well, the United States certainly has the capability, the moxie to deal with these problems too, wouldn't you think? So, in between spates of hand-wringing and doomsday-one-ups-manship, try to be a bit more optimistic. There are tens of thousands of people who actually know what they're doing "working this issue." Don't abandon all hope, not quite yet.
Special Review Memorandum
Foreword The
Requirements, Briefly The FCC
acted after some horrific situations arose and were publicized.
In Houston, for example, a teenager was unable to dial "911" and reach
the police after thugs broke into her home and started beating her
parents downstairs. It seems her father had just signed up with
one of the VOIP companies. Nobody in the family knew that when
you dialed "911," you were lucky to get anyone (in some cases, you
were sent to a police department main number, in others you got a
prerecorded message). Now,
Federal and state regulators have known for at least a year that many
VOIP services didn't deliver standard emergency communications, but
they'd been trying to gum or swallow this particular policy bullet.
Who wants to burden new entrants, right? Then, however, the
House Telecommunications & Internet Subcommittee declined to go along
with the FCC's program. The FCC had to act. Thus,
30 days after the FCC's text in docket 05-116 was published in the
Federal Register, all U.S. VOIP companies had to notify their
customers that there were E-911 shortcomings -- if they hadn't been
fixed by then. That was in July. There was a staff-granted
extension to August. And, by November 28, all these companies are
supposed to be in-compliance -- unless they obtain regulatory
(or judicial) stays and/or waivers, which some already are seeking. Two
Basic Points Be
prepared, public servants, to hear how it's impossible to meet the
E-911 deadline. Or, that VOIP companies will go out of business
altogether. Or, that small businesses customers will be
devastated. Like Margaret O'Brien in Meet Me in St. Louis,
threatening to hold one's breath 'til you turn blue often works with
the Government.
Ourselves, however, we'd just remind FCC Commissioners and staff of
two pretty basic points -- things which your Review's Telephone
Bureau's been harping on for years. One
of Two Basic Safety Features We also
need to remember the "baby sitter situation" which South Carolina PSC
Chairman Mignon Clyburn has raised. It's no good to notify just
the customer of VOIP shortcomings. What about the baby sitter
who has an emergency -- and, doesn't know that the home's phones don't
"work"!
[1]
Second,
we wouldn't accept claims of financial or technical impossibility in
other contexts, so why do so here? Do you think, for instance,
that the National Highway Traffic Safety Administration (NHTSA) would
waive seat belt, vehicle lighting, air bag, or other safety
requirements to allow, say, a Chinese car company to get a toe-hold in
the U.S. motor vehicle market? Do you think the Food & Drug
Administration would waive testing and other safeguards to help
fledgling pharmaceutical makers? All
sorts of companies here and abroad have to meet basic safety
requirements. It's one of the familiar costs of entering and
competing in various lines of commerce. The FCC probably should
have required Vonage and other VOIP companies to satisfy all E-911
requirements from the outset. But at this stage in the game,
regulators -- and, the courts -- certainly have no sound public
policy basis for excusing companies from this basic safety obligation.
If they do, won't they be complicit in any problems which arise?
More Houston cases, for example?
Conclusion If the
FCC's steadfast refusal to waive basic safety requirements lessens new
entry into the telephone market, that's too bad. But this isn't
some computer industry Beta test. Consumers have a
well-justified assumption that dialing "911" will actually work.
The FCC needs to make sure that's always the case.
[1]
In 1990, a similar issue arose in respect of hearing
aid-compatible telephones. The FCC earlier had required such
handsets, but to avoid obsoleting too many too fast, had allowed
companies with lots of phones to just have a few that were
compatible -- at least for the time being. What persuaded
the FCC to scrap this approach was the possibility that a
hearing-impaired woman in an office, for instance, would have to
scout around to find a phone that "worked," if she were attacked,
or had an emergency. The agency thought that clearly an
unreasonable situation, and thus ordered all handsets forthwith to
be compliant.
Special Review Memorandum
Foreword It's
All Right If You Don't Know But
there really is just such a body -- it was set-up by then-Commerce
Secretary Herbert Hoover in 1922 -- and the committee members, not to
mention thousands of radio communications support personnel throughout
the Government, deserve some recognition every once and a while, don't
they?
[2]
This
past week, for instance, Americans -- indeed, the whole world --
watched the space shuttle Discovery crew hold TV news conferences,
conduct outside repairs, and even conduct important scientific
experiments thousands of miles above Earth. But for the radio
frequency managers at NASA -- working with IRAC at the U.S. Department
of Commerce -- none of this would be happening, however. The
same's true of (a) those National Weather Service video maps of
incipient hurricanes, for example, or (b) the many National Park
Service and Forest Service fire fighters successfully battling fires
in the west, and depending on their radio communications, or (c) the
FBI endeavoring to sleuth-out and combat terrorism and also depending
on communications. But for radio frequencies obtained and
secured through IRAC and its authorization processes, none of this
would be happening either. Not
"Dead Weight Loss" But what
fraction of the Gross Domestic Product is Federal activity these days?
Twenty-two percent is sometimes cited but that's probably low, and
doesn't reflect quasi-nongovernment organizations such as Amtrak, the
U.S. Postal Service, or the various power administrations. Our
assumption is that the correct number is closer to 30 percent.
And, while there's undoubtedly waste, fraud, and abuse there -- just
as there's waste, fraud, and abuse in every private enterprise we're
aware of -- the services Federal agencies are providing are critical. Keeping
the Baltimore harbor navigable, dredged -- that has value.
Maintaining a nationwide National Parks system, keeping superhighways
and bridges open, and running the air traffic control system.
These matter, too. Helping law enforcement enforce the laws,
supporting the national defense and security establishment which
endeavors to keep us all safe. That matters, too. Just
As Critical to Public Services Thus,
the simplistic notion that radio spectrum resources in the hands of
the private sector will somehow be used more efficiently, or will
better serve the public, is just foolishness. The reality is
that Government relies on these resources to deliver a lot of goods
and services the public wants -- and, which help the American public.
And, the Government's just as efficient as anyone else. Or, to
put it another way: If you think the private sector's always
more efficient, you don't know a lot about the private sector.
Cornerstone of the National Defense Since
the 1950s, American defense strategy has assumed that if we cannot
out-build or out-man potential adversaries, we can at least out-smart
them. And, the result's been a stream of incredibly
sophisticated -- and, incredibly communications-dependent -- weapons
systems. Not only
are today's weapons systems communications-dependent, that's also
obviously the case of the "national command structure." Radio
spectrum-using systems are how the Defense Department mobilizes,
directs, and sustains efforts. "President to foxhole," and all that.
Our systems are lots better than any actual or potential adversaries,
and that's how the Pentagon keeps this country safe.
Thus,
given a choice between more cellphone chatter, more WiFi "hot spots,"
or more BlackBerrys -- versus communications systems capable of
spotting and tracking suit-case nukes before some crazy Arab terrorist
sneaks into Manhattan, which would you have? Fortunately, the
"peace forces" former Presidents have talked about have the radio
spectrum support they need today -- and, that's true because of the
IRAC.
Conclusion To
borrow Senator Stevens's term, in conclusion, there's more to spectrum
management than some "giant regulatory cash register." That
management -- and, the services it facilitates -- are an important
part of the national civilian and defense infrastructure, and ought to
be respected (and treated) accordingly.
[1]
See generally Statement of Peter F. Guerrero, Director, Physical
Infrastructure Issues, U.S. General Accounting Office [now U.S.
Governmental Accountability Office], before the Senate Committee
on Commerce, Science & Transportation, June 11, 2002, "History &
Current Issues Related to Radio Spectrum Management" at >>www.gao.gov/new
items/d02814t.pdf<<.
[2]
See generally Wiley & Misener, Whither Goest NTIA? The
Fate of a Federal Telecommunications Agency, Federal
Communications Law Journal, vol. 48, no. 2 (1995-96) at >>www.law.indiana.edu/fclj/pubs/v48no2.html<<.
Special Review Memorandum
Foreword New York
Attorney General Eliot Spitzer earlier, on September 30, 2002, had
filed suit against WorldCom and other crooked telecommunications
companies and executives -- such as Qwest. He was to go on to
challenge the corrupt practices of the country's largest insurer, AIG.
He targeted myriad mutual fund trading abuses which Federal agencies
had ignored. Spitzer soon achieved near-universal name
recognition, crucial for any up-and-coming politician. But he
also prodded some "Sleepy Hollow" Federal regulatory agencies into
action. And, by so doing, actually helped the country, that's
for sure. "Pay
Parity" and "A More Commodious Building" Wall
Street scams, bubbles, miscellaneous thievery, and fraudulent reports?
Messrs. Grubman, Blodget et al.? Are you kidding? Until
Eliot Spitzer showed up, guns a'blazing, the SEC was truly "Sleepy
Hollow." So, too, was the Office of the U.S. Attorney for the
Southern District of New York -- the Justice Department agency that's
supposed to be policing Wall Street and the money markets. Who
knew what they were doing!
Beating Up on Bell Companies
Meanwhile, WorldCom, Global Crossing, and Qwest, among others crooked
communications companies were literally walking away with the store.
It was the functional equivalent of those thieves who periodically use
a front-end loader to cart away an ATM machine. As FCC Chairman
Michael Powell made clear in his July 11, 2002, letter to House
Financial Services Committee Chairman Michael Oxley, moreover, during
virtually all this extraordinary time in American economic history,
the FCC and its staff were gracious enough to cut the swindlers a
great deal of slack. The
agency neither enforced nor waived a series of statutory regulatory
requirements. No one at the Federal Government's
telecommunications regulatory agency thought it necessary to look into
the financial activities of its regulated markets. Nor, did the
FCC telephone, write, email, or otherwise contact the SEC, U.S.
Attorney, or other Federal enforcement personnel about these matters.
It's a record of casual disregard that ought to embarrass those folks,
you'd think. In
Fairness, the FCC did have its own new building under planning and
construction during much of this period. Do you think the pear
wood paneling selected for the new dais really works? What about
the Commissioners's own oversized offices, complete with full baths,
kitchenettes, and all the other accoutrements so rarely offered to
PAS-IV level appointees? How's the web site? Fancy enough So,
don't worry, all you WorldCom employees and investors who lost your
life savings! Or, US West/Qwest workers who saw the company
plundered. Or, AT&T workers and retirees who saw an American
institution demolished, right before their very eyes. At least
the FCC Commissioners took very good care of themselves during the
prime swindling period, didn't they? They also feel your pain
periodically, at least, of that you can be sure. Now:
The Payola Scandal Now,
"payola" and its partner, "plugola," are longstanding Federal
offenses, first recognized in the 1950s. Back in the era of the
quiz show scandals.
[2]
And, it's not as it these are
some obscure transgressions buried away in some arcane FCC report and
order only the staff which wrote it will ever read. Sections 317
and 507 of the Communications Act proscribe the sort of conduct which
apparently was the object of Sheriff Spitzer's latest inquiry.
It's right there, right in the statute -- like all those requirements
on WorldCom, Global Crossing, and other crooked telecommunications
companies the FCC ignored. So,
where were the FCC Enforcement Bureau "police" during this particular
series of illegal transaction? Well, many of them were still
beating up on Bell companies -- the more local access lines they lose,
you see, the harder you have to beat on them, right? And, the
FCC's Enforcement Bureau staff were also pouring through complaints
about Janet Jackson's sterling silver nipple guard, whether a penis
was obvious during the opening ceremonies of the Athens Olympics, or
if the "f-bomb" was dropped during a music awards show. Crucial
things like that.
Meanwhile, at least two of the country's largest radio operations --
Clear Channel and Viacom's Infinity -- evidently were all wrapped up
with Sony and Bertlesmann personnel, pushing various songs and records
in return for gifts. Actually, the FCC and its staff aren't
quite sure what's happening, or happened. Until the Los Angeles
Times and other papers reported the Spitzer-Sony BMG settlement, you
see, the country's communications "watch-dogs" knew about as much as
anyone else! What a national embarrassment!
"Interfering With the Essential Work of the Hospital" Granted,
we're not overly optimistic. In that July 2002 letter, Chairman
Powell made a lot of promises to Congressman Oxley -- new initiatives
to reach out to other Federal enforcement agencies, more emphasis on
ensuring an honest telecommunications marketplace, etc. So far
as we can tell, however, little has actually been done, has it?
Heck, we seem to be about the only people aware of the FCC commitment
-- we expect they've long ago lost the letter and none of the Bureau
staff are aware it exists! Certainly none of the Commissioners
know anything about this.
Collaboration with the SEC or the U.S. Attorney for the Southern
District of New York is not standard operating practice for the FCC
today. They're not collecting Wall Street-type financial
information. None of the FCC nor its senior staff have even
declared the basic importance of honesty in the communications
business. It's pretty much the same in July 2005 as it was in
July 2002 -- or, July 1997, for that matter. On
the Broadcasting Front Once
upon a time, for instance, an FCC Field Operations Bureau official
would periodically visit all the radio and TV stations in the country
to make sure that things were going according to the rules. But
the Hundt Commission demolished much of the Field Operations Bureau,
substituting instead 800-number complaint lines! On-site station
audits these days are rare -- which, of course, only facilitates the
sort of commercial skullduggery Spitzer identified. The FCC
also used to pay considerable attention to matters including
fraudulent billing -- stations not airing the commercials companies
have paid for. There's less of that, too. FCC
Commissioners talk a lot about community service, growing
concentration of control, and Janet Jackson's sterling silver nipple
guard. You have to draw the line somewhere, after all. But
on the things which ensure the honesty and law abidingness of
broadcasting, there doesn't seem to be much consistent focus, does
there? What
Needs To Be Done? So,
here's what the FCC needs to do at a minimum in view of this latest
institutional embarrassment:
Appropriate High-Level Attention. First, the FCC Chairman,
his colleagues on the Commission, and the agency's senior staff
need directly to say to broadcasters that they want and expect an
honest, law abiding business. Don't act as if all the
industry were crooks. They're obviously not. But do
make clear that the Government's watching. And, stress that
it's simply unfair for some in the industry to game the system,
and, in the process, hurt the reputation of all those who try to
do an honest, good job.
Regular Audits. Second, the FCC needs to caucus with the
National Association of Broadcasters (NAB), the Association of
Maximum Service Telecasters (MST), the National Cable &
Telecommunications Association (NCTA), and the television networks
which aren't associated with the NAB. At present, the FCC
requires regular audits of telephone companies. There needs
to be the same for every radio and television station -- and,
every cable system as well. We're not talking
attestation-grade audits. But an independent auditor needs
to come in, look at the books and records, write-up a report, and
provide a copy to management -- as well as the FCC's Media Bureau.
Companies do this routinely for their owners and investors.
This needs to be done here. And, the FCC needs to have the
industry come up with procedures on how this will be done.
"Proactive." Third, the FCC leadership needs to instruct its
Enforcement Bureau staff that they expect them to be "proactive."
For years, the FCC's enforcement processes have been almost
exclusively complaint-driven -- and, the rules even made it
difficult to file a complaint. Now, it's far easier to
complain, to rat-out a broadcaster or cable company you don't
like. You can denounce them online, in the best traditions
of the Venetian Republic. But the FCC Enforcement Bureau is
still in the Maytag repairman mode -- waiting for someone to call.
That's not good.
Quotas. Finally, consideration might be given to
establishing independent enforcement quotas, guidelines which
might even rise, year by year. As part of their annual
budget preparation and submission, the FCC Enforcement Bureau
staff should show that an ascending percentage of enforcement
actions each fiscal year are the result of staff initiative and
perspicacity -- not just sitting there, waiting for some
800-number line to ring.
Conclusion Well,
how do you think Attorney General Spitzer and his 10 staffers feel
about these huge, manifestly ineffective Federal regulatory agencies?
He's doing a good job concealing it, in any event. But now
is the time for the FCC to take the initiative. They let down
the American public when it came to WorldCom, Global Crossing, Qwest,
and other swindling telecommunications companies. They didn't
do their duty. They still have not put in-place the rules and
procedures needed to make sure that sort of fantastic defalcation
doesn't happen again in the telephone business. They
could, however, actually make progress in broadcasting. They
could foster more attention to the plain words of their own enabling
statute. And, it seems to us that would be a good thing.
Television and radio broadcasting, and increasingly cable television,
too, are critical "lubricants of commerce," to use Sir Winston
Churchill's term. The advertising services they provide are
crucial to our economy. And, they remain the primary source of
news, information, and entertainment for nearly 300 million people --
not to mention the critical link in national warnings. If these
industries are going to attract the investment dollars they need to
continue serving public and country, their reputation for honesty and
law abidingness has to be central. The FCC could actually
promote that and, by so doing, help the country. Imagine that!
[1]
During some of the time of these various transgressions, the
former head of the Antitrust Division, now New York City
Commissioner of Education, Joel Klein, was head of Bertlesmann's
North American operations. At least nominally. Whether
he knew, or should have known, of these record sale promotion
activities isn't known. Maybe the FCC can ask.
[2]
See J. Gregory Sidak & David Kronemyer, "The 'New Payola' and the
American Record Industry: Transaction Costs & Precautionary
Ignorance of Contracts for Illicit Services," in the 1981
Harvard Journal of Law & Public Policy (accessible
through the Social Science Research Network (>>http://papers.ssrn.com/sol3/results.cfm<<)).
Regulatory Policymaking Assessment Memorandum
Introduction In
recent years, various technology companies and loose coalitions
have mate |