2009 Annual Report

2009 ANNUAL REPORT

PHOENIX CENTER FOR ADVANCED LEGAL & ECONOMIC PUBLIC POLICY STUDIES 5335 Wisconsin Avenue, NW, Suite 440 Washington, D.C. 20015 Tel: (+1) (202) 274-0235 ● Fax: (+1) (202) 318-4909 www.phoenix-center.org

PRESIDENT’S MESSAGE

2009 again proved to be another The Phoenix Center also had a large media presence in 2009. Phoenix Center staff extremely productive year for the Phoenix authored six op-eds in various national Center, so much so that all of our many media outlets such as the WASHINGTON accomplishments and accolades cannot be TIMES, FOX FORUM, FORBES.COM and THE summarized here. HILL. Phoenix Center staff also did several As always, the Phoenix Center’s published local and national radio appearances to work was prodigious. For example, the discuss our research, and we were cited Phoenix Center published four POLICY prolifically in the national and international PAPERS, one POLICY BULLETIN and five press as well as in the blogosphere. POLICY PERSPECTIVES. We are also proud to The Phoenix Center’s Annual U.S. Telecoms report that no less than six of our papers Symposium was also another phenomenal were published, or accepted for publication, success. In addition to presenting panels in a variety of academic journals. comprised of some of the leading experts in While our research covered a wide variety of the industry, we were honored to have FCC issues, we are particularly proud of two Commissioner Meredith Attwell Baker pieces of research in 2009. deliver the keynote address. Moreover, we were delighted to bestow upon Congressman The first piece was the Broadband Adoption G.K. Butterfield (NC-1st) the Phoenix Center’s Index, sponsored by the Governments of prestigious annual Jerry B. Duvall Public Portugal and Brasil. We were honored that Service Award. Phoenix Center Chief Economist George Ford was invited to present this research before The Phoenix Center’s research also continued the OECD’s Expert Workshop on Mobile to make a significant contribution to the Broadband Adoption in Lisbon. We also dialectic in 2009. Indeed, Phoenix Center presented a full copy of the paper at a major staff presented our research before such event at the National Press Club featuring a diverse bodies as the United States Congress, keynote address from FCC Commissioner the Federal Communications Commission, Robert McDowell. the National Telecommunications and Information Agency, the General The second paper was entitled Internet Use Accountability Office and the New York City and Depression Among the Elderly by Phoenix Council. Center Chief Economist Dr. George Ford and Visiting Scholar Sherry G. Ford. In this Finally, it was with a heavy heart that we paper, Drs. Ford made a significant said goodbye to Phoenix Center co-founder contribution to the literature by performing and Resident Scholar Thomas M. Koutsky, what we believe to be the first empiric study who left to take a senior position with the which shows that Internet use by the elderly FCC to work on the National Broadband can reduce depression by approximately Plan. However, we were pleased that two of twenty percent (20%). This paper was our Adjunct Fellows, Professors Randy Beard presented both at the prestigious and Michael Stern, took up a more Telecommunications Policy Research permanent role and became Senior Scholars Conference and at a Phoenix Center with the Phoenix Center. Sponsored event where attended by some of Once again, not a bad year… the leading members of the elderly policy community. — Lawrence J. Spiwak, President PHOENIX CENTER 2009 ANNUAL REPORT 1 PHOENIX CENTER PUBLICATIONS

The Phoenix Center continued to  Expanding the Digital Divide: Network Management Regulations and the Size of publish a prodigious amount of scholarly Providers, PHOENIX CENTER POLICY research in 2009. As always, all of the BULLETIN NO. 23 (October 2009). Phoenix Center’s research is available free on the Phoenix Center’s web page and on the PHOENIX CENTER POLICY PERSPECTIVES Social Science Research Network. The Phoenix Center’s POLICY PERSPECTIVES HOENIX ENTER OLICY APER ERIES P C P P S SERIES is designed to provide a forum for its individual members to express their personal The Phoenix Center’s POLICY PAPER SERIES views on current policy developments. The seeks to provide an in-depth analysis of the Phoenix Center published the following current regulatory and political paradigms, POLICY PERSPECTIVES in 2009: as well as to provide constructive and well- reasoned solutions to the problems of the  PHOENIX CENTER PERSPECTIVES NO. 09-01: day. In 2009, the Phoenix Center issued the Normalizing Broadband Connections following POLICY PAPERS: (May 12, 2009).  The Need for Better Analysis of High  PHOENIX CENTER PERSPECTIVES NO. 09-02: Capacity Services, PHOENIX CENTER POLICY Econometric Analysis of Broadband PAPER NO. 35 (June 2009). Subscriptions: A Note on Specification (May 12, 2009).  The Broadband Adoption Index: Improving Measurements and Comparisons of  PHOENIX CENTER PERSPECTIVES NO. 09-03: Broadband Deployment and Adoption, Be Careful What You Ask For: A Comment PHOENIX CENTER POLICY PAPER NO. 36 on the OECD’s Mobile Price Metrics (July 2009) and forthcoming, FEDERAL (September 16, 2009). COMMUNICATIONS LAW JOURNAL (Spring 2010).  PHOENIX CENTER PERSPECTIVES NO. 09-04: Finding the Bottom: A Review of Free Press’s  Market Definition and the Economic Effects Analysis of Network Neutrality and of Special Access Price Regulation, PHOENIX Investment (October 29, 2009). CENTER POLICY PAPER NO. 37 (October 2009).  PHOENIX CENTER PERSPECTIVES NO. 09-05: Whoops! Berkman Study Shows “Open  Internet Use and Depression Among the Access” Reduces Broadband Consumption Elderly, PHOENIX CENTER POLICY PAPER (November 12, 2009). NO. 38 (October 2009). OTHER PUBLICATIONS: PHOENIX CENTER POLICY BULLETIN SERIES  PHOENIX CENTER RESEARCH The Phoenix Center’s POLICY BULLETIN SERIES MEMORANDUM: Applicability of Phoenix is designed to provide a forum for Center Research to the FCC’s National responding to breaking policy issues in a Broadband Plan Notice of Inquiry (GN shorter period of time than our PHOENIX Docket No. 09-51) (June 2, 2009). CENTER POLICY PAPER SERIES. The Phoenix Center published the following POLICY BULLETIN in 2009:

PHOENIX CENTER 2009 ANNUAL REPORT 2 CONTRIBUTING TO THE PUBLIC DIALECTIC

In 2009, Phoenix Center scholars again  Phoenix Center Chief Economist George Ford participates in NTIA Workshop on continued to make numerous contributions Broadband Data Transparency; and to the public dialectic in a wide variety of forums.  Phoenix Center President Lawrence J. Spiwak testifies before New York City SIGNIFICANT APPOINTMENTS AND GRANTS: Council on Establishing Strong Network  Governments of Portugal and Brasil Neutrality Principles in Order to Protect the sponsored the development of the Internet. Broadband Adoption Index for presentation ACADEMIC PUBLICATIONS before the OECD Expert Workshop on Mobile Broadband Adoption in Lisbon; In 2009, the Phoenix Center had six of its papers published, or accepted for  Phoenix Center Chief Economist Dr. publication, in such noted academic journals George Ford remains in top 1% of authors as: downloaded on the Social Science Network and Phoenix Center President  A Policy And Economic Exploration of Lawrence J. Spiwak remains in top 2% of Wireless Carterfone Regulation, 25 SANTA authors downloaded on the Social Science CLARA COMPUTER & HIGH TECH. L.J. 647 Research Network; (2009);

 Phoenix Center Chief Economist  Network Neutrality and Foreclosing Market continues to serve on Connect Alabama Exchange, 1 INT. J. MANAGEMENT AND by direct appointment of the Governor; NETWORK ECONOMICS 160 (2009); and.  Valley of Death in the Innovation Sequence,  Phoenix Center Co-Founder and Resident AMERICAN JOURNAL OF EVALUATION Scholar Thomas M. Koutsky hired as (Forthcoming Winter 2010); Special Counsel, Infrastructure Task Force, FCC Omnibus Broadband Plan.  Separating Politics from Policy in FCC Merger Reviews: A Basic Legal Primer of the TESTIMONY “Public Interest” Standard, COMMLAW CONSPECTUS (Forthcoming Spring 2010); In 2009, Phoenix Center staff was called upon by several different bodies to testify and  The Broadband Adoption Index: Improving present our research, including: Measurements and Comparisons of Broadband Deployment and Adoption,  Phoenix Center Chief Economist George FEDERAL COMMUNICATIONS LAW testifies before the House Energy & JOURNAL (Forthcoming Spring 2010). Commerce Committee on An Examination of Competition in the Wireless Industry.  Tort Liability for Software Developers: A Law & Economics Perspective, JOHN MARSHALL  Phoenix Center Chief Economist Dr. JOURNAL OF COMPUTER AND George Ford participates in FCC Staff INFORMATION LAW (Forthcoming Spring Workshop on Broadband Deployment to 2010). Unserved/Underserved Areas as part of the National Broadband Plan process;

PHOENIX CENTER 2009 ANNUAL REPORT 3 SPEECHES AND CONFERENCE PARTICIPATION  A briefing at the National Press Club to entitled: Understanding Broadband Metrics: Once again, Phoenix Center staff was asked The Broadband Adoption Index featuring a to present our research at a variety of forums, keynote from FCC Commissioner Robert including: McDowell and a discussion of research by  36th Annual Public Utility Research Dr. Michael Katz – University of Center Conference; California, Berkeley (and former FCC Chief Economist); Carlos Rodriguez –  New Mexico State University Institute for Telefonica Internacional USA, Inc. and Public Utilities Santa Fe Conference for Charles Goldfarb – Congressional State Regulators; Research Service.

 Federal Communications Bar Association  A briefing at the University Club on Seminar – Dial N for Numbering: Internet Use and Depression Among the Understanding the Role of Numbers and Elderly featuring Alixe McNeill – Vice Numbering Policy in Modern President, Program Development, National Communications; Council on Aging; Leigh Purvis –Technical & Policy Research Analyst, AARP Public  Federal Communications Bar Association Policy Institute Daniel Wilson – Executive Seminar – Spectrum Dynamics in the 21st Director of Policy and Program Development, Century: The Link Between Sound Spectrum National Caucus and Center on Black Policy and America‘s Place in the Global Aged; Anthony K. Sudler – President & Economy; Chief Executive Officer, Alzheimer's  Pike & Fischer Broadband Policy Summit; Association (National Capital Area Chapter); John Alger – Director of  Montana Telephone Association Annual Operations, SeniorNet; and Janice Conference; Branham – Director of Communications and  Michigan State University’s “Camp Technology, The OASIS Institute. NARUC”; OP-EDS AND LETTERS TO THE EDITOR:

 Telecommunications Policy Research  Broadcasting Diversity, WASHINGTON Conference; TIMES;

 Columbia University’s CITI “State of  Is YOUR Broadband Access About to Go Bye Telecom” Conference; Bye? FOX FORUM;

 Federal Communications Bar Association  Fixing The U.S. Broadband Problem, Conference on the FCC’s National FORBES.COM; Broadband Plan;  This Probe Could Hit a Dead Zone,  World Information Technology and WASHINGTON TIMES; Services Alliance (WITSA) Global Public Policy Summit in Bermuda.  OECD Research Faulty: U.S. Rates for Mobile Use Not Really Higher, PHOENIX CENTER BRIEFINGS AND WASHINGTON TIMES; WORKSHOPS:  Letter to the Editor: Wireless firms’ The Phoenix Center also put on several Business Practices Spur Innovation, THE briefings and workshops to present our HILL. research to various policy makers. These briefings included:

PHOENIX CENTER 2009 ANNUAL REPORT 4 IN THE NEWS…

In 2009, the Phoenix Center’s work and  MARKETWATCH staff were cited prolifically by major news  MEDICAL NEWS TODAY and trade media outlets around the world, including:  MULTICHANNEL NEWS

 ASSOCIATED PRESS  OREGON STATESMAN JOURNAL

 BROADBAND CENSUS.CM  REUTERS

 BRIEBART.COM  SAN FRANCISCO EXAMINER

 BROADCASTING & CABLE  SATELLITE WEEK

 CABLEFAX DAILY  SEATTLE TIMES

 CNBC  SENIOR JOURNAL

 COMMUNICATIONS DAILY  SUN HERALD

 COMSDAILY (AUSTRALIA)  TALK NEWS SERVICE RADIO

 CONGRESS DAILY  TELECOMMUNICATIONS REPORTS

 EARTHTIMES  THE HILL

 EDUCAISE  THE MODESTO BEE

 ETHIOPIAN REVIEW  TMC.NET

 EXECUTIVE LEADERS RADIO  TR DAILY

 FINANCIAL NEWS NETWORK TELEVISION  WASHINGTON INTERNET DAILY (CANADA)  WASHINGTON TIMES  FOX NEWS  XCHANGE MAGAZINE  GOVERNMENT TECHNOLOGY  XOMMSDAY (AUSTRALIA)  INTERNET NEWS

 INVESTORS’ BUSINESS DAILY

 IP BROADBAND

 IP BUSINESS NEWS

 IP NETWORK POLICY REPORT

 IP CARRIER

 KRES RADIO (MISSOURI)

 LARS LARSON NATIONAL RADIO SHOW

PHOENIX CENTER 2009 ANNUAL REPORT 5 ANNUAL U.S. TELECOMS SYMPOSIUM AND JERRY B. DUVALL PUBLIC SERVICE AWARD

On December 3, 2009, nearly 100 The Symposium ended with the presentation of the Phoenix Center’s Annual Jerry B. people from government, academia, industry Duvall Public Service Award to and the media joined the Phoenix Center for Congressman G.K. Butterfield (NC-1st) and its Annual U.S. Telecoms Symposium at the Majority Chief Deputy Whip. The Duvall University Club in Washington, D.C. This Award does not seek to recognize the year’s Symposium theme was Driving Policy recipient’s personal politics; rather, the Through a “Fact-Based and Data-Driven Duvall Award goes to the policymaker who Process” and the discussions were both most demonstrated the “political courage in, substantive and lively. and contribution of analytical rigor to, the The Symposium kicked off with the United States telecoms policy debate.” Given traditional “Economists’ Panel.” This year, Congressman Butterfield’s track record of the Economists’ Panel included Dr. Robert promoting broadband investment and Willig, Professor of Economics – Princeton universal coverage for all and his principled University; Dr. Marius Schwartz, Professor of stand on making sure the FCC balances the Economics – Georgetown University; Dr. cost and benefits of potential network Jonathan Baker, Chief Economist – Federal neutrality regulations, we can think of Communications Commission; and Dr. nobody who epitomized this standard more George Ford, Chief Economist – The Phoenix in 2009. Center. As always, the panel was moderated

by Dr. Jerry Duvall, Honorary Phoenix Center Chief Economist Emeritus and current FCC International Bureau Chief Economist.

After the Economists’ Panel, we were extremely privileged to welcome FCC Commissioner Meredith Attwell Baker as the keynote speaker of the Symposium. Commissioner Baker used this opportunity to set forth her views on A Spectrum Management Framework.

The second panel was entitled Does Congestion Matter? and was comprised of the leading technologists that run the most sophisticated networks in the world. Panelists included Dr. Edward Amoroso, Chief Security Officer – AT&T; Jason Livingood, Executive Director of Internet Systems Engineering – Comcast; Mark Wegleitner, Senior Vice President, Technology – Verizon; and Dr. Rob Curtis, Deployment Director – FCC Omnibus Broadband Initiative.

PHOENIX CENTER 2009 ANNUAL REPORT 6 YEAR IN PICTURES

PHOENIX CENTER 2009 ANNUAL REPORT 7 RESEARCH INTERESTS FOR 2010

2010 promises to bring a wide variety of areas, as a potential focal point of the National Broadband Plan. As to be expected, some complex broadband and technology policy argue that these prices are “too high”, while challenges. In our continuing spirit of others contend that prices reflect competitive contributing positively to the dialectic, the levels. To help answer this important Phoenix Center has a series of research projects question, the Phoenix Center is contemplating underway designed to educate the public and a study to examine whether prices increases policymakers on the impact of broadband and occurred during or post- price cap regulation. technology policy. As always, our research If our results indicate the former, then the agenda is flexible, thus allowing us to adapt validity of continuing price cap regulation for quickly depending on the tenor of the debate Special Access services remains very much in at the time. question. ADOPTION AND IMPLEMENTATION OF THE Benefits of Broadband: FCC’S “NATIONAL BROADBAND PLAN” The Phoenix Center has shown that issues of As part of the American Recovery and broadband adoption do not lie with a supply- Reinvestment Act, the Federal side problem, but rather with demographic Communications Commission (“FCC”) in factors. Continuing with this research, we February 2010 will issue a far-reaching intend to study in 2010 how Internet use will “National Broadband Plan” that will set forth aid in keeping unemployed workers from various proposals to ensure all Americans with becoming “discouraged” and remain in the ubiquitous and affordable broadband. This potential labor pool. National Broadband Plan will no doubt touch on almost every issue related to broadband International Broadband Rankings policy, and implementation will be complex and time consuming. While it is impossible to How we measure the success of the National know exactly what will be contained in the end Broadband Plan is important. To this end, the report, at minimum, we expect the debate to Phoenix Center may conduct a study that focus on the following important topics: would show where the United States would rank if existing trends continue, ceteris paribus, Spectrum Caps: and where the United States should rank if the policy recommendations contained in the With the potential of a looming “spectrum National Broadband Plan prove successful. crisis,” we intend to study the complex issue of spectrum caps and the policy consequences of NETWORK NEUTRALITY the trade-off between the desire for new entrants in the market against the potential The network neutrality debate has many efficiency gains from allowing existing players manifestations, creating a vast field of to acquire additional spectrum. Given the potential research topics. We believe that presence of spillover effects and the high fixed every form of regulation should pass through a and sunk costs associated with the industry, consumer and social welfare cost/benefit our preliminary results indicate that few firms analysis. Building on prior Phoenix Center with more spectrum may be socially optimal. research, we intend to focus on the following three areas of the debate: (a) pricing of Special Access: services; (b) the effect of net neutrality regulation on private investment; and (c) the The FCC has highlighted access to backhaul effect of network neutrality regulation on and special access lines, particularly in rural innovation.

PHOENIX CENTER 2009 ANNUAL REPORT 8 MISSION STATEMENT

The Phoenix Center for Advanced Long-Term Goals: Legal & Economic Public Policy Studies is a (1) The Phoenix Center seeks to demonstrate non-profit 501(c)(3) educational and research that consumer welfare is best enhanced organization that studies broad public-policy by promoting free markets, competition, issues related to governance, social and and individual freedom and liberty. economic conditions, with a particular emphasis on the law and economics of (2) The Phoenix Center’s seeks to remind telecommunications and high-tech industries. stakeholders that it is crucial to avoid political hyperbole and instead approach Founded in 1998, the Phoenix Center’s public policy with the analytical rigor and mission is to maximize consumer welfare by solemnity it deserves. promoting free markets, competition, and individual freedom and liberty. (3) The Phoenix Center seeks to promote public confidence in the democratic The Phoenix Center achieves this goal by process, government’s institutions and in providing an honest and credible new voice the free enterprise system. in the public dialectic by supporting objective, solutions-based academic research (4) The Phoenix Center seeks to foster an to the forefront that is unencumbered by environment where citizens can openly political hyperbole or agendas and is instead and vigorously debate today about what well grounded in fact, law and economic kind of a world they want to live in theory. tomorrow.

The “ideal of democracy rests on the belief that the view which will direct government emerges from an independent and spontaneous process. It requires, therefore, the existence of a large sphere independent of majority control in which the opinions of the individuals are formed.”

– Friedrich von Hayek

PHOENIX CENTER 2009 ANNUAL REPORT 9