progressivism, individualism, and the public ... - Telmarc Group

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PROGRESSIVISM, INDIVIDUALISM, AND THE PUBLIC
INTELLECTUAL
If a Physician gave testimony being paid by a drug company and not declaring that fact,
they most likely would be defrocked in every way possible. For an Academic, however,
they continue to opine without fear of anything, they just collect another substantial
advisory fee. The problem of course is also due to Congress who never asks the Public
Intellectual the question of who is paying for their testimony. Even with Public
Intellectuals who are attorneys and attorneys are trained to testify on the behest of their
clients, they too never disclose their clients.
Yet, these were truly highly competent professionals and they also became well trained in
the technology and the operations of the telephone business. In contrast, academic
economists have in the past decade begun to opine in a similar manner, either as experts
in litigation or in filings supporting their clients before regulatory bodies.
A simple example of the quasi Public Intellectual extending beyond their ken is that of
Professor Hausman at MIT. A renowned academic in the field of economics, Hausman in
1993 was requested by Pacific Telesis, one of the Baby Bells, to disembowel one of my
papers on PCS, the FCC's auctioning of the 1.8 GHz spectrum, also known as Personal
Communications Services 27 . I wrote in a paper presented at MIT entitled Wireless
Access to the Local Loop. In the paper I stated several conclusions I had reached based
upon my being both a Visiting Professor at MIT in Electrical Engineering and Computer
Science and the Chief Operating Officer and Senior Vice President at NYNEX Mobile,
now Verizon Wireless. Thus, unlike Hausman, I was speaking as a fact expert not an
academic. Facts are in my opinion often so troubling to academics, especially
economists. I asserted at the time the following:
"First, access and interconnection charges were barriers to entry because they allowed
the incumbent to “tax” the new entrant and thus create an unfair advantage. The access
theory allegedly sustained by Hausman was predicated on the classic Baumol-Willig
Theorem which was developed under the aegis of AT&T to apparently justify their
stranglehold on the local loop. Simply, the Hausman argument on access is based on
network externalities and payment to the incumbent for the advantage. I had already
stated that wireless would supplant wireline, it did so three years ago, and that if the rule
based on externalities held that at the point at which this occurred, the wireline should
now pay the wireless. That has never occurred.
Second, he then opined that there were great economies of scope between the wireline
business and the wireless. I had stated that there are none. Specifically I relied upon the
fact, apparently then and yet today still unknown to Hausman, that IP switching would
replace the Class 5 switches. I had discussed this with Jacobs at Qualcomm when we first
introduced CDMA into the network. What was obvious to us in 1988 was still apparently
unknown to economists in 2003! In addition, telephone poles were not good for cell sites
and one would outsource billing and customer service, as well as the sales forces being
totally different, I made them so. Thus there were no other common elements. His
27 See http://www.telmarc.com/Hausman.pdf
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