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Gus Hurwitz on Noncompetes and the FAA’s System Outage

Presentations & Interviews ICLE Director of Law & Economics Programs Gus Hurwitz joined Steptoe & Johnson LLP’s The Cyberlaw Podcast, offering two explanations for the Federal Aviation Administration recent . . .

ICLE Director of Law & Economics Programs Gus Hurwitz joined Steptoe & Johnson LLP’s The Cyberlaw Podcast, offering two explanations for the Federal Aviation Administration recent system outage, which grounded planes across the country, as well as puzzling over the Federal Trade Commission’s peculiar determination to write regulations that will outlaw most non-compete clauses. The full podcast episode is embedded below.

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Antitrust & Consumer Protection

Let’s Keep Driving Forward on Connected Cars & Next-Gen Wi-Fi

Popular Media These days, there isn’t a lot of harmony in the world of technology policy. But there is a bright spot of bipartisanship in a section . . .

These days, there isn’t a lot of harmony in the world of technology policy. But there is a bright spot of bipartisanship in a section of our airwaves: the 5.9 GHz band. In 2020, the FCC voted unanimously to modernize the rules in this spectrum to allow both Wi-Fi and automotive safety tech to operate. This win-win was celebrated by proponents of car safety and broadband alike. But today the Department of Transportation (DOT) is working on a study that may purposely have been designed to undo this decision. At a time when broadband is more important than ever, we should not undo this popular and bipartisan policy.

Read the full piece here.

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Telecommunications & Regulated Utilities

Lovers of Internal Combustion Engines Should Perhaps Be Nervous

Popular Media Teaching the economics of innovation to college students isn’t a tough job. They understand intuitively that pro-competitive policy maximizes their ability to choose the best . . .

Teaching the economics of innovation to college students isn’t a tough job. They understand intuitively that pro-competitive policy maximizes their ability to choose the best product for them. More options for consumers leads to opportunities to optimize their choices. If the cost of one option is too high, for whatever reason, consumers can choose something else.

Read the full piece here.

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Innovation & the New Economy

Ian Adams on forced access to railroads

Presentations & Interviews ICLE Executive Director Ian Adams joined the Regulatory Transparency Project’s Fourth Branch Podcast to discuss proposed rules that would require mandatory switching on U.S. railroads. . . .

ICLE Executive Director Ian Adams joined the Regulatory Transparency Project’s Fourth Branch Podcast to discuss proposed rules that would require mandatory switching on U.S. railroads. The full episode is embedded below.

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Telecommunications & Regulated Utilities

ICLE Comments to Surface Transportation Board on Reciprocal Switching

Regulatory Comments Comments of the International Center for Law & Economics Before the Surface Transportation Board STB Ex Parte No. 711 (Sub-No. 1) Reciprocal Switching Submitted Feb. . . .

Comments of the International Center for Law & Economics

Before the Surface Transportation Board

STB Ex Parte No. 711 (Sub-No. 1)

Reciprocal Switching

Submitted Feb. 14, 2022

On behalf of the International Center for Law & Economics, a nonpartisan nonprofit that promotes the use of law & economics methodologies to inform public-policy debates, I offer the following comments to express concern about the potential finalization and promulgation of the Surface Transportation Board’s (STB) 2016 Notice of Proposed Rulemaking (NPRM) regarding the imposition of a reciprocal-switching requirement for U.S. freight-rail operations.

The STB’s renewed efforts on reciprocal switching have come as part of a push by the administration to spur competition in the U.S. economy.[1] This proceeding responds specifically to a call by President Joe Biden to: “strengthen regulations pertaining to reciprocal switching agreements.”[2] Unfortunately, like much of the administration’s broader effort, the regulatory solutions the STB offers are in search of competition problems, evidence of which remains conspicuously absent. Worse, the STB offers these new regulations on the basis of a docket that is now dated and that itself relied on even older data.[3] As a procedural and factual matter, the STB should use this proceeding to abandon consideration both of the 2016 NPRM, specifically, and of a reciprocal-switching mandate altogether.

Toward that end, these comments speak to the manifest infirmities of the proposal under consideration by examining how the STB has failed in its statutory duty to identify a problem suitable for regulatory redress; by identifying the proposed solution’s most likely outcomes and exploring how poorly they satisfy the Proposed Rule’s stated goal; and by detailing the inevitable costs associated with promulgating the Proposed Rule.

Competition within the freight-rail sector and the larger U.S. economy is vital to the nation’s economic health, and by the STB’s most recent assessment, is robust.[4] But the role of regulation is to make markets regular in a manner that fosters efficiency, not to reflect the whims or will of a regulator to the detriment of a disfavored party.

Read the full comments here.

[1] Executive Order 14036, 86 FR 36987-36999, “Promoting Competition in the American Economy.” July 9, 2021. https://www.federalregister.gov/d/2021-15069.

[2] Ibid.

[3] Docket No. EP 711, Docket No. EP 711 (Sub-No. 1), 81 FR 51149-51165,“Petition for Rulemaking To Adopt Revised Competitive Switching Rules; Reciprocal Switching.” Aug 3, 2016. (NPRM). https://www.federalregister.gov/d/2016-17980.

[4] Laurits Christensen Associates report to Surface Transportation Board, “A Study of Competition in the U.S. Freight Railroad Industry and Analysis of Proposals that might Enhance Competition.” November 2009. https://www.stb.gov/wpcontent/uploads/files/docs/competitionStudy/Executive%20Summary.pdf.

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Telecommunications & Regulated Utilities

New Freight Rail Mandates Could Make the Supply-Chain Crisis Even Worse

Popular Media President Joe Biden’s July 2021 executive order offered a sneak preview of his administration’s priorities for the freight-rail sector, particularly where it calls on the Surface Transportation . . .

President Joe Biden’s July 2021 executive order offered a sneak preview of his administration’s priorities for the freight-rail sector, particularly where it calls on the Surface Transportation Board (STB) to “strengthen regulations pertaining to reciprocal switching agreements.”

Read the full piece here.

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Telecommunications & Regulated Utilities

What the FAA-FCC Fight Can Teach Us About Our Approach to Risk

Popular Media The Federal Aviation Administration (FAA) has released a list of 50 airports that it contends will need “buffer zones” for 5G cellular spectrum, the latest in a . . .

The Federal Aviation Administration (FAA) has released a list of 50 airports that it contends will need “buffer zones” for 5G cellular spectrum, the latest in a months-long and escalating public fight between the agency and the Federal Communications Commission (FCC). Rather than a mere regulatory turf battle, the differences this internecine spectacle illustrates in how these two agencies think about risk and understand the purposes of regulation reflect basic divisions that run throughout our politics.

Read the full piece here.

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Telecommunications & Regulated Utilities

The FAA’s challenge to 5G is a regulatory power grab

Popular Media In a turf war between federal agencies that could prove deeply disruptive to travelers, the Federal Aviation Administration is threatening to ground planes if the . . .

In a turf war between federal agencies that could prove deeply disruptive to travelers, the Federal Aviation Administration is threatening to ground planes if the Federal Communications Commission allows wireless carriers to begin operating in the C-band spectrum this week.

Read the full piece here.

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Telecommunications & Regulated Utilities

Rail Reciprocal-Switching Mandates

TL;DR Since taking office, the Biden administration has moved aggressively to use enforcement actions and rulemakings—many of them outlined in the administration’s July 2021 executive order—ostensibly as a means to promote market competition.

Background…

Since taking office, the Biden administration has moved aggressively to use enforcement actions and rulemakings—many of them outlined in the administration’s July 2021 executive order—ostensibly as a means to promote market competition. Among the targets of this approach has been the freight-rail sector. The administration advocates for mandated reciprocal switching, a form of compelled network interoperability, on grounds that it would improve the rail industry’s competitive environment.

The Biden EO called on the Surface Transportation Board (STB) to “strengthen regulations pertaining to reciprocal switching agreements,” which the board is expected to do in early 2022. The regulations would be based on a six-year-old notice of proposed rulemaking (NPRM), which was, in turn, based on far older data.

But…

Concerns about competition in the freight-rail industry, and particularly about consolidation among Class I railroads, have been both overblown and misdirected, driving officials to seek counterproductive regulatory remedies. A reciprocal-switching mandate would render rail networks both less efficient and less resilient, as it would undermine firms’ ability to schedule their operations precisely. 

Such a mandate would be particularly counterproductive in the midst of the ongoing supply-chain crisis. Over the longer term, a switching mandate would undermine the very incentives that have yielded enormous private investment in the development and ongoing maintenance of rail infrastructure.

Read the full explainer here.

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Telecommunications & Regulated Utilities