FCC Seeking Experts in Microeconomics, Econometrics, Industrial Organization
The FCC is looking for economists versed in microeconomics, econometrics and industrial organization theory. The agency is likely trying to beef up its team in advance of some mathematically complex actions it’s expected to take this year, such as retooling some USF cost models, and analyzing the state of the special access market, said economists in interviews. The real question, they say, is whether the new hires will be expected to justify decisions the agency has already made, or actually drive the decision-making process.
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"Are they there to help design policy, or are they there to make excuses for bad ideas?” asked Phoenix Center Chief Economist George Ford. He came to the agency in the mid-90s, when then-incoming Chairman Reed Hundt hired several economists, in part related to implementation of the 1992 Cable Act. Ford said the agency “rarely” listened to his advice: “We fought more than we held hands.” Ultimately, the agency’s in-house economics consulting division was “shut down when they got tired of a bunch of renegade lawyers and economists telling them how wrong everything they were doing was,” Ford said. Chairman “Tom Wheeler will determine how much economists will be paid attention to,” he said.
The agency Monday posted the openings for six economists (http://bit.ly/JG6S1H) on its vacancies webpage. The new economists are expected to “provide expert technical advice on Commission rulemaking proceedings,” and “may be called upon to assess the current state of the agency’s regulatory program, identifying areas of adverse regulatory impact on the public, the industry, or the economy as a whole,” the postings said.
There will be enough work to keep the new hires busy for quite a while, economists said. The USF quantile regression analysis became so problematic that Wheeler surprised the industry during a congressional Q-and-A session by announcing his intention to drop it (CD Dec 18 p2), so the agency will have to work on a replacement. The mixture of industrial organization and econometric experts could be related to the upcoming special access market analysis, said economists. They said the experts could also be useful in running regressions during post-auction analysis. Economists could also help with analysis of broadband adoption rates by income and population density, and predictions of the cost of deploying new networks, said the experts. The job postings close Jan. 21.
Six economists feels like a “big class” to American Enterprise Institute visiting scholar Jeffrey Eisenach, but it makes sense to him, given Wheeler’s stated priorities: “If you're going to tie your policies to the star of competition, then you have to have some astronomers to give you a sense of where that star is in the firmament, and how bright it’s shining.” It’s important also to have the economic capacity to do the analysis that’s needed, he said. “You have to have the economic chops to be able to do the hard analysis and come up with empirical conclusions."
New economists, versed in the latest analytical techniques, will be useful as the FCC does its analyses, Eisenach said. “You do need young blood to keep you on the front edge of the state of the art, as far as science is concerned.” The ability to manipulate large data sets has increased with increases in computing technology, with regression analyses with billions of observations possible, as opposed to thousands, he said. Newly minted economists could bring an important level of sophistication in using empirical analysis to test complex microeconomic or industrial organization theories, he said.
President Barack Obama and then-FCC Chairman Julius Genachowski made a big push for “data-driven decision making,” and wanted to see explicit cost/benefit analysis backing up decisions, even where the FCC didn’t necessarily have the resources to perform this analysis, said Doug Brake, telecom policy analyst at the Information Technology & Innovation Foundation. “This could be a general continuation in that direction, or perhaps all the hires are for a single big project -- it is hard to tell."
"I take it as a somewhat positive sign that perhaps Tom Wheeler recognizes the need for more sophisticated economic analytical capabilities on the staff,” said Free State Foundation President Randolph May. He suggested Wheeler look for economists “whose professional work has indicated that they take a dynamic, rather than static, view of the marketplace, especially in light of the fast pace of technological change and business model improvisation that characterizes the communications environment.”