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Oct. 5, 2021

Mark Jamison on Regulatory Humility & Antitrust: Two Think Minimum

Mark Jamison on Regulatory Humility & Antitrust: Two Think Minimum

Dr. Mark Jamison is the Director and Gunter Professor of the Public Utility Research Center at the University of Florida's Warrington College of Business and a Non-Resident Senior Fellow at the American Enterprise Institute, where he works on how technology affects the economy and on telecommunications and federal communications issues. He's written three books, contributed to several edited volumes, and published in academic and policy journals, as well as the popular press

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Transcript

Scott Wallsten:

Hi, and welcome back to Two Think Minimum. Today is Tuesday, September 14th, 2021. I’m your host, TPI President Scott Wallsten. I’m here with TPI Senior Fellow Sarah Oh, and today we’re delighted to have as our guest, Dr. Mark Jamison. 

Mark is the Director and Gunter Professor of the Public Utility Research Center at the University of Florida’s Warrington College of Business and a Non-Resident Senior Fellow at the American Enterprise Institute, where he works on how technology affects the economy and on telecommunications and federal communications issues. He’s written three books, contributed to several edited volumes, and published in academic and policy journals, as well as the popular press. And he has a PhD in economics. Mark, thanks for joining us.

Mark Jamison:

It’s my pleasure, Scott, and thank you for having me. And Sarah, thank you as well.

Scott Wallsten:

We have a lot to talk about these days, but I want to start with something that maybe isn’t in the news so much, which is the Public Utility Research Center “PURC”, which you’ve worked on for a long time. And it seems to me it’s an incredibly important institution that not enough people in DC know about. So, tell us a little bit about it, what its purpose is, what it does, why it’s important. 

Mark Jamison:

Yes. Well, I’m told that we’re one of the best kept secrets in the United States. We’re known all over the world for our work in utility regulation, but not so much in the US, and maybe that’s just because it’s where we put our energy. The purpose of “PURC” is to make sure that when we analyze utility regulatory issues, that we do the analysis well. 

The center was started back in the early 1970s for that specific purpose, and that’s what we’ve maintained as our bread and butter throughout. We, about a little over 20 years ago when I came on board, I used to be a utility regulator in the US… I joined PURC in 1996. So, about the time I came on board, with a small grant from the World Bank, we launched an international training program, which turned us from being a Florida focused center to an internationally focused center.

And now, except during COVID, twice a year, we put on a course that is about two weeks long. It will be attended by 60, 70 people from all over the world. We’ve reached out now to 160 different countries and close to 4,000 people altogether, and the emphasis there, again, is how do we think well about utility regulation, not trying to tell people what the answers are, as we’re no wiser, our values are no better than anyone else’s. And in fact, I know less about any particular person’s situation than they do. Our goal is just to help them think well. 

Scott Wallsten:

I think by now you’ve had influence around the world, regulators, in almost every country, particularly developing countries have been influenced one way or another by your work. Do you come across any regularities when you talk to regulators? Things that may be misconceptions that they tend to come with, that you maybe disabuse them of, or the reverse, they come with ideas that you haven’t thought of before in their unique situations? 

Mark Jamison:

Well, one of the things that always comes up is that the biggest challenge they face is politics, and it’s interesting when we compare regulation in the US to regulation outside the US how much more skilled a non-US regulator has to be at dealing with political pressures than in the US. Because I’ve had some of my alumni that have, you know, faced a Presidential election in which if you raise trouble, you go to prison, and they’re trying to increase energy prices because they have to, by law, in that environment. 

And my former student succeeded through that, he actually became a permanent secretary. I won’t name the country, but he did quite well. And those are the kinds of things that just make you so proud, because these people are making significant impacts in their countries. I can take no credit for it, of course, because I didn’t do the magic of what this person or any of the others have accomplished.

But certainly, one of the things that really impresses me is how they can think politically without being political themselves, and they have to be able to do that. 

I think the thing that almost all regulators around the world struggle with is the challenge of being skeptical of your own opinions. We all tend to be pretty confident. Overconfidence is something we all have, and we think we know what the reality is. We think we know what the answers are, and trying to help people be able to step back from that and say, “Okay, I think this is true, but what if I’m wrong? What are the consequences of being wrong? And can I take small steps? So, would I treat my opinion as a hypothesis rather than a conclusion that I learn from as I take steps into perhaps implementing it, or then stepping back from implementing if it turns out that reality is just different than I thought it was.” So, I think in those two things, that dealing with the politics is something that they’re really, really talented at because they have to be and then also just dealing with that overconfidence issue that we all share.

Scott Wallsten:

So, that’s interesting. I mean, in some ways, those are kind of opposing forces. To deal with politics, you have to figure out how to incorporate whoever’s in charge, their preferences, into what you’re doing so that you can do your job without being fired or something worse. But then at the same time, knowing where you might be wrong too, it’s a balancing act. It also puts the question of regulatory independence in a different light. We talk about that here in the US and we talk about, you know, how independent the FCC is, or the FTC, and whenever an administration, a president says something related to that agency, we all sort of, we get annoyed because the executive branch is not supposed to be part of those. But in these other countries, it’s a completely different issue, and independence is much more important and much harder to maintain it sounds like. 

Mark Jamison:

I would agree that it is hard to maintain. One of the things that we discovered when we first started doing courses for people from developing countries primarily, that they could get all the economics right. They could figure that out and, you know, we could help them with it. They already came from engineering backgrounds, but they could eventually do the analytical models. They could learn to write the laws correctly. They could do the financial analysis right, but still, their systems would fray and fall apart in many instances. 

And we wondered why that was true, because they got all the technical stuff correct. What we concluded was that they weren’t making the progress with people’s minds that they needed to make. That, in many cases, we were asking countries at that particular point in time to do something that was against their nature. One was to see utility services as a business as opposed to a government service. That was really hard for them, and getting into the techniques of regulation doesn’t solve that problem. This is about convincing people to think differently. The other one was that you would be in a country where the Prime Minister or the President of the country could not dictate an outcome. Most of these countries have traditions where the big person in charge is the big person in charge, and now you have a government agency that can tell them, “No.” Now, that’s really hard to do. 

So, it was dealing with those two, what we call adaptive challenges, where we have to rethink our assumptions about the world and say, “Well, our traditions, maybe they served us well in the past, or maybe they didn’t, but they certainly don’t take us into the future,” and being able to help a country let go of those things. And so, we actually now have a young woman Araceli Castaneda, who’s our Director of Leadership Studies. So, it’s an economic research center with somebody in charge of leadership studies because economics doesn’t work if people’s minds aren’t in the places they need to be to let the economics work.

Scott Wallsten:

So, talk to me a little bit more about convincing people to run a utility like a business, because I think some people would hear that and sort of get a different idea of than what I think you actually mean, and it’s not about trying to make a business, you know, come up with great advertising schemes and other things like that, it’s more about trying to operate efficiently rather than trying to maximize other policy goals. So, explain a little bit more about what you mean there. 

Mark Jamison:

Right. So it’s all about the governance and how you separate the functions of government so that they can operate differently from each other. So, you have the policy issues, and the policy issues are about what kind of a people are we, and what are the values we hold? What holds us together? What are we trying to accomplish as a country? That’s the space of politics. Nothing else can do that but politics. It’s got that wonderful role, very messy, very hard to do, but it’s critical. You have to do it. 

And then you have the regulatory role that says, “Given the politics and what we’ve said we’re going to do and what we’ve done, written down into laws, how do we technically get that done?” And that puts constraints on how the utility then makes decisions about where will prices be, where will investments be made. You know, what will the quality of the service be? How will we treat customers? How will we treat other stakeholders? 

And then there’s also the financial side, which says, “Okay, given all the constraints that I have, this is where the utility has to make decisions.” And this is what I mean by running it like a business, “Given the constraints, how do I do this as well as I can?” Not just technically, but in terms of the finances of it. Because I will try to get the technology just as ideal as I can given my financial constraints, how much money can I actually bring in? And so that’s what I mean by operate like a business, is you have someone who’s focused on the finances. They’re penalized and rewarded, according to that financial performance, given the constraints of what the country says it’s about and what the regulations are that are in place.

Scott Wallsten:

I guess one last question about “PURC” and developing countries before we move on. You said it was started in a partnership with the World Bank back in the 1970s, and speaking of independence, from what I’ve seen, you’ve sort of offered very consistent advice about how to think about issues, how to think them through. The World Bank is not so consistent with their advice on regulation and so on. Have you managed to continue that relationship with them? Is there ever any tension, because obviously you could be overlapping, from the bank’s perspective, in a positive way, or they might see you as competitors. How do you manage that?

Mark Jamison:

Let me correct just a little bit of a misconception I probably wasn’t clean enough about. The Utility Research Center, “PURC,” started in the early 1970s really, and started by the University of Florida with the utilities in the state of Florida. 

Scott Wallsten:

Ahh, right. 

Mark Jamison:

Yeah. So, it came about because this was when Richard Nixon was putting on wage and price controls, and the Dean of the business school, Bob Lanzillotti, was on the committee, Nixon’s committee, to implement that. And he was told, “Do this for the utility companies.” And he said, “They’re already regulated.” As we talked with the utilities about it, they said, “Yeah, this is a mess. People don’t understand are what we do and how we to do it.” So the center started, just to try and address those kinds of issues. The World Bank became, or our relationship with World Bank started in 1996.

So, 27 years later than that, and again, it was a small grant, there was a competition. Different universities competed for this grant to start international training, and the money was just simply seed money. The World Bank told us at the time, this is all you get. If you succeed, good for you. If you fail, well, life’s tough. That’s been the arrangement and the relationship. There have been times when the World Bank has felt as maybe somewhat competitors. So, they do have their own development institute that teaches free courses, and they do that a lot. In terms of, we have a body of knowledge on infrastructure regulation that is a huge website with all kinds of resources and explanations. The World Bank starts some of its own in that space as well. So, maybe in some sense there’s competition, but for the most part, you know, we operate on friendly terms.

They’re not deeply involved in our work. We do indeed have to succeed or fail on our own merits. The bank, as you know, is a complicated place. A lot of really smart people and they pursue complicated ideas. One of the, I think the operational challenges of the bank and the people at the bank that I talked with openly about this, they agree that it is project oriented. And so, once a project is complete, people walk away from it, and no one else has responsibility for it anymore, and that was true with us getting started with our international training. They work very closely with us for about three or four years, and then the project was over. You know, the people moved on to other things. And there’ve been times when we’ve had to go and knock on their door and say, “You know, we still exist, and we’d like to talk with you about things that are going on and how better to understand them and help people with them.”

Scott Wallsten:

Well, I mean, I’ve spoken at some of your events and it’s always a lot of fun to talk to the regulators that you bring on. I always feel like I learned something new and hear some interesting new challenges that they’re trying to deal with that we’ve never thought of. So, it’s obviously something really important and interesting. So, let’s move on. 

Let’s talk a little bit about something else you’re working on, antitrust. Until recently, I guess antitrust was the focus of… a small, smallish number of people cared about it a lot, but it wasn’t kind of in mainstream politics, and it seems to be now. What do you think of the current trends in antitrust policy?

Mark Jamison:

I’m very troubled by the trends that I see, anyway. I got interested in antitrust quite a few years ago, before I joined the university, as a matter of fact. Between my job at regulation, I worked at regulation for about nine years and started with the university in ’96, I worked for about two years for Sprint Telecommunications Company, and this was the early 1990s when the industry was getting ready to completely restructure itself. And I could feel the tensions and see them happening, and that’s what made me get really interested in antitrust because I could see what a difficult time the industry was going to have reorganizing itself and how the government was going to help that or hinder it. Because when you’re in the government and this is takes us to today, can you have that overconfidence issue? Because I see a lot of people today that sincerely believe with all their heart, that they know exactly how Apple’s business model should work and how big Apple should be, how many customers it should have, what kind of products it should provide.

They believe that for Google as well. They believe that for Amazon. They believe that for Facebook. They sincerely think that they can ideally structure this industry, and it will be, you know, according to what they think should happen. Two great big problems with that, of course. One is they actually don’t know that. Nobody knows that. That’s why competition works so well, because it’s a competition of ideas as much as anything. But then also you have the challenge… excuse me, it slipped my mind just a little bit what the second part of that was. So let me go back and try again…

Scott Wallsten:

Going to your first part on back to your first part with this overconfidence, you can see it in, for example, the house bills on antitrust, where they want to create a technical review committee inside the FTC and any platform that wants to change its interface has to have that approved by the FTC, which is just an unbelievable role for a government agency. It’s just, I mean, when I say unbelievable, I still, I have trouble wrapping my mind around this.

Mark Jamison:

Yeah. I agree, but we see that happen. We saw that back when I was a regulator of telephone companies. You know, we actually tried to specify what the relationship would be with customers. Not anywhere near as severe as creating what the service platform would look like. But if we’d had that ability, we might’ve tried that. You just never know. You go back during the Obama administration, the FCC then tried to require somebody to create an app that would run cable television to determine what packages were and what people could buy and things like that. And yeah, it’s just an overconfidence that… I understand it because I’ve experienced it myself. But when you step back from it, it kind of boggles the mind. 

The other thing I was trying to think of was when you think in terms of “I will structure the industry then it will perform accordingly,” you have in your mind a paradigm developed a long time ago, that’s turned out to be wrong. That you impose a structure, a structure is imposed, just falls from heaven, if you will. And then the industry makes decisions because of the structure, and then the performance falls out of those decisions. That’s just wrong, and we know that that’s wrong because we know that structure emerges from the decisions. It emerges from the conduct. It’s all interdependent, it’s all very dynamic. So, that the basic theory that people are following is you’ve been wrong. 

Scott Wallsten:

I feel like, I mean, that’s definitely true. Economic literature has shown that pretty convincingly over the past several past years, but I also feel like we’re maybe a little bit at fault in perpetuating it too, because when we write papers, empirical papers, we still end up using measures of concentration. As you know, right-hand side, a variable as we, even if we don’t want to say it’s causal or whatever, using it as a causal variable. And this is not a fair question, I guess, but how do we get around that? How can we focus on empirical research that takes into account this fact that the structure-conduct-performance paradigm really doesn’t work? Have you seen things that you think really, you know, you read it and you say, “Yeah, this is the way this is the way we should be conducting these analysis.”

Mark Jamison:

I have not seen anything that satisfies me yet because we do have some very prominent papers in high level journals that take a structure as exogenous, and then say, “Gee, what happens from it?” But we do have some papers showing up every now and then that say, “Ask what causes structure.” So, for example, there’ve been a few papers coming out of some work at George Mason that looks at regulatory structures and discovers that that results in a particular type of industry, how you regulate it, it does as well. I’m trying right now to get a few postdocs together and we want to try and take that on. We want to try and endogenize, that’s the economics jargon, the industry structure, what drives it. And instead of using structure to explain, let’s find out what explains it. Because then that’s also going to tell us what’s happening to the consumers at the end of the day. I always encourage people to understand, you go clear back to Adam Smith, 1776. He explained that the economy works to serve customers. There’s no reason to have a business except to make customers better off. So, that’s what we want to focus on.

Scott Wallsten:

If you were able to reform antitrust policy, what would you focus on? What would you want to do? Are there things that we should be working on?

Mark Jamison:

Well, my bias of course, is in the technology area. So, I think in terms of how things change. And so, one thing I would definitely try to change is our basic assumptions where we have a static view of an industry. So, we will look at what a company does today, and we’ll say that, “Oh, gee, you know, look, look what Amazon is doing. They’re requiring people to change prices this way, or to compensate them, compensate Amazon based upon what a price discount might be someplace else.” And you can run a nice mathematical model that will show that that harms consumers in the end. You can do that, but that assumes that Amazon is already in existence, that its business model is already in existence. And if you make changes to it, nothing else happens except for that change. In reality, in the tech industries, we’re creating the rules to create the next generation of companies.

And I want us to think in those terms, what is it that in terms of rules for competition that we will want in place that allows really good competitors to emerge. We all know about Metcalf’s Law, about how the cost of computing is declining. There’s another law called Bell’s Law, which says that we get a new generation of computers about every 10 years, and it changes everything. And that’s what I think we ought to be watching for, is what’s going to happen with the next generation of computing systems, of what we can do with software and hardware, what kinds of companies will emerge and what kinds of things on how best will customers benefit from those?

Sarah Oh:

So, as we think about antitrust changes in the US today with new regulators, and then tying it back to your experience with “PURC” and developing countries, regulators, and other parts of the world, what would you say to these newly installed, newly elected, commissioned regulators in the US how do you educate regulators to think better?

Mark Jamison:

Well, one of the things that I’ve encouraged, and I don’t know very many of them personally, so I can’t address any particular person or even a very large group of people. But one of the things I would emphasize is this issue of regulatory humility. You know, how are you going to make decisions that always have this kind of temporary nature to them so that things can change? So, for example, about a year ago, we had a series of articles come out. I’ve forgotten the publication. So, I won’t speculate as to what it was. It was about five articles on how the Federal Trade Commission had investigated Google. The nature of the articles was, gee, look, how, what a horrible job the economists at the Federal Trade Commission did. They mis-forecasted what Google was going to look like in the future, and therefore the commission made these really bad decisions.

When I went back and looked at the decisions the regulators made, the commissioners made, I thought what they were doing, they were acting very wisely, because they were in effect saying we really don’t know what Google will look like in the future. And so we’re going to take this step that deals with an immediate problem without trying to hamstring the future. So, I thought that was really well done. 

So that’s one thing I would consider, is how do you maintain skepticism of your own opinions? I would also work really hard on the independence issue. It’s tough in the US to maintain regulatory independence because there we gathered data several years ago, and I’ve forgotten what the exact numbers are. But if you look at almost all the regulators in the US, they come from some sort of a political background. And so even if you want to say, “I am not going to be partisan in my job. I am not going to be captured by politics,” your whole history is steeped in politics. All of your friends are steeped in politics. So, you won’t even recognize the politics when it creeps in oftentimes. Now, when I talk with people, they are sometimes shocked at the things that I will say. Well, yeah, here’s where politics has crept in, and they don’t think in those terms. So, that’s something else that I would do. 

And then I would also harken back to something that the FCC used to do. A few years ago, I had an opportunity to interview a lot of people who would work at the FCC over the years. And I was basically doing research on two things. One, what did the Chief Economists do that were good, and then what did different Chairpersons do that were good. And I learned that kind of number one of the relationship between a Chairman and a Chief Economist was Reed Hunt and Michael Katz.

And the reason that was so respected, not only in that time, but even today by people, is that Reed Hunt said, “Your job as staff is to do the analysis as best you can. Regardless of what the answer is, do really good analysis. So my job then, and the other commissioners’ job, is to deal with the political realities, but the politics doesn’t come into our center, to our agency.” And he lived by that and people really respected that. What he did then with Michael Katz, and Michael played this role very well, is every decision that had any economics to it all had to be reviewed by Michael. And he had to say, the economics is good, or it’s not, and here’s where it needs to be fixed if it’s not. And that worked really well. And I would encourage anyone to try and pick up that model and say, one of your big jobs, if you’re a commissioner, especially if you’re chair, is to protect that organization, to make sure it can do its work well, to defend the quality and the rigor of analysis, and to make sure you have good minds and give those good minds opportunities to review your work and say, “Here’s where you’ve gotten it wrong, and here’s where you’ve gotten it right.” Maybe sometimes you have to make decisions that technically are wrong because political realities are what they are. But a lot of times, I’d like for us to move closer to the direction where the analysis can stand strong. 

To give you one example. Another country. I once interviewed a commissioner from Thailand. He was with the National Broadcasting and Telecommunications Commission of Thailand, and at this time, and I think it’s still true, Thailand was being ruled by military coup. And I was talking with him about independence. I asked him, I said, “How do you maintain independence with a military coup because at any moment, they can just change everything that you do, including you?” 

And he said, “Well, what you have to do is you have to know how far you can take a decision and still protect and maintain the integrity of the organization.” I thought that was very wise. I think that’s true for all of us to different degrees, but certainly in his situation, it was a very harsh reality.

Scott Wallsten:

I don’t know how well do you think he managed to do it?

Mark Jamison:

I think he managed to do it really well. I haven’t looked for two or three years, but last time I looked at, he was still there, and he was focusing on the broadcasting side, which is by far the most political side. Last time I spoke with him, it’s been a few years, was when Thailand was having a lot of challenges with Facebook because a Thai, a guy from Thailand, had murdered his daughter and livestreamed it, and it took Facebook like 48 hours to take down the video. Which, if you know the Thai culture, that’s decimating. They’re very protective of how people… how they view themselves and how other people view them as well. So, this was really hard. So, he had a lot of work to do, trying to get Facebook’s attention, trying to deal with the politics in the country and the military as well in this event. He survived it. He thrived through it. His organization thrived through it. So, I think he’s done well. 

Scott Wallsten:

Lots of helicopter’s leaving the regulatory agency?

Mark Jamison:

No, no, none whatsoever.

Scott Wallsten:

Oh, now this question is obviously a setup. How do you think Chair Lina Khan has done in her time so far at the FTC, given the advice you generally would give?

Mark Jamison:

Yeah, and I don’t know her personally. Never met her, and I don’t watch what she does very carefully. So, I’m only picking up on a few things that I find in the media. That’s my only source of information, which, you know, one thing I always caution people about with media is whenever you read something in the media or hear or watch it, that you know nothing about, it sounds brilliant. But when you actually know the topic, know the situation or the issue, you realize how wrong they can be. So, there’s probably a lot they’ve gotten wrong and things that they’ve said about what she’s doing, but let me just address or respond to what I’ve heard or think I’ve heard, anyway. I’m concerned about how quickly the new chairperson moved to implement ideas she had before she got there. She had become famous, in part, for some writings she had done and her work and the House Judiciary Committee staff, it’s seemed to me, really imperfect information, that those ideas moved quite seamlessly into the FTC.

That concerns me because I really want a regulatory agency to say, “What’s the law? What are the facts? Then, here’s my decision.” And it’s hard to do that if you’ve already viewed yourself as an expert on a topic. I’m also concerned about what I’ve heard of information not being shared around the agency. Being a regulator is a tough job, and I often tell people in my courses that one of the scariest things for a country is an ignorant regulator because a regulator will make a decision as if he or she knows everything. They have no choice but to do that, and the more they’re kept ignorant, the worse those decisions will be. So, I’m concerned about the lack of information flowing. I can hope that that gets remedied because nothing but bad decisions will come from it. And bad relationships. And we have seen that happen in other agencies. We’ve seen times since at the federal level, as at the state level, where relationships have gotten so bad that commissioners would disagree just on personal reasons, and not because of the substance of issues, and I think that would be a really sad situation.

Scott Wallsten:

We have a little bit of time left, so let’s go to the FCC for a second. And before we talk about economics, which we know about, let’s talk about something that really we don’t know about, which of course is the palace intrigue. What’s your favorite hypothesis as to why President Biden has not yet named a third Democrat and said who would be the permanent chair?

Mark Jamison:

I have given that no thought whatsoever, as much as I study the politics of regulation, I just don’t get involved in it. So I, I actually don’t have an opinion on that at all.

Scott Wallsten:

Okay. So, let’s then talk about things we do know a little bit about, or at least we all have informed opinions about. So far, it looks like there’ll be about $65 billion for broadband. If all goes as people think it will, if it were up to you, it’s two questions. How would you distribute that money? 

Let’s make it three questions. And sort of, this is a sort of, kind of a backwards order. How would you distribute that money? What sort of programs would you design if you had free reign, and do we even need any of them?

Mark Jamison:

So, let me start with the last question. We don’t know if we need any of them. We have not, in this country, ever asked ourselves the hard question as to what are these programs for, which is really sad. Because as I try to explain to people, so you’ve got to have $65 billion. It’ll be spent on something, and it will have broadband in its name, but that means a $65 billion won’t be spent on housing, education, food, other things as well. Is that a good idea? We don’t tend to ask that question. 

Let me go back to your first question. I would distribute that money the same way I distribute my own money, which I don’t distribute my own money. I buy things with my own money, and that’s what I would do here as well. I would be willing to buy things from people. I would make people earn that money. We want to make sure we have broadband available, and in the hands of people who need it. $65 billion worth, in some sense. I would specify here’s exactly what I think the deficiency is, and I would make people compete for that money. Just like they have to compete for my money. I don’t just simply go to Walmart or Target or the grocery store and say, “I have this much money. What will you give me for it?” I don’t do those kinds of things. I would be just as careful with this money and say, “All right, everybody’s got to compete. I’m going to compare prices. I’m going to compare reputations. I’m going to compare all these things.” 

I want it to be… I like the reverse auction process that the FCC has implemented. The idea came from Chile and Peru twenty-five years ago. It just took us a while to catch up with the rest of the world. I think that has been pretty effective for us. There are some things we need to improve. One is how do we specify what we really want? And then I would hold people accountable, just like I’m holding them accountable for my own money. Build a house, buy a car, buy whatever it is that I might buy. If you don’t deliver, I don’t pay, and that would be my situation here as well. This is one thing the World Bank, which we talked about earlier, actually got right quite a few years ago when they adopted what they called output-based aid. They discovered they should give people money and then expect them to do something good. They will take the money and maybe something good will happen, but probably not. So they started up a plan where, okay, here’s the aid that we want to have. We want this to be developed. And when you get it developed, we will pay you for it. And that made a huge difference for them. I think it would make a huge difference for us as well.

Scott Wallsten:

No, I like the way you described the reverse auctions is basically that’s the way we always spend our money, more or less, on everything, and people, groups that don’t like them because it threatens the subsidies that they’ve been getting forever, try to make it sound like something mysterious and complicated and yields bad outcomes, when we know that that’s just not true.

The details of the auctions matter a whole lot, like you were, you were saying, but the criticisms that people have made upon them, just happened with RDOF, have nothing to do with the auction process. It’s about, you know, who’s eligible to receive money and how you define the areas that are eligible for subsidies.

Mark Jamison:

Sure. Well, it’s all about the pre-work contract design decided upon the product and we’ve not yet to the post-work, but those are where the challenges are, and those are hard things. Writing contracts is tough. That’s why we have so many lawyers doing that and we still go to court over it.

Scott Wallsten:

Well, I think also one of the advantages of the auction is that it showed us the flaws in that process, and when you don’t have a bidding, competitive process like that, you still have those flaws. Just nobody even nobody realizes it because the money just goes out there and nobody ever follows up on it. 

Mark Jamison:

Yes, exactly. 

Scott Wallsten:

Not that I’m biased or have any opinion on that. So, I think we’re about out of time, Mark. Thank you so much for joining us. It’s always fun talking to you. 

Mark Jamison:

My pleasure. Thank you, Scott. Thank you, Sarah. I have great respect for both of your work. Scott, I’ve known you since you were a graduate student. You’ve accomplished a lot in this country. Sarah, I’m really impressed with the things that you do, and so it’s an honor to talk with both of you.

Scott Wallsten:

Well, thanks so much. I hope we have we’ll have you back sometime soon.