1. A Hippocratic Oath for Policy Makers Robert W. Hahn Executive Director AEI – Brookings Joint Center for Regulatory Studies Robert W. Hahn Executive Director AEI – Brookings Joint Center for Regulatory Studies Presented at the PRI Conference Regulating Wireless in California: Bill of Rights … or Wrongs? San Francisco, CA April 15, 2003 Presented at the PRI Conference Regulating Wireless in California: Bill of Rights … or Wrongs? San Francisco, CA April 15, 2003

2. Roadmap Make three observations about regulation Offer a paradigm that embraces the Hippocratic Oath –Applies to Wireless

3. 1. Economic Regulation of Competitive Markets Reduces Economic Welfare Price and Entry regulation in competitive markets has been a failure –Airline, railroad, and trucking regulations led to price distortions –After transportation industries deregulated, estimates of annual consumer benefits between $35 and $40 billion (in 1990)  lower prices and better service –Similarly, wireless regulation is unlikely to help consumers

4. 2. Government Intervention Can Have Unintended Consequences Example: taxation policies have equity implications –Taxes raise prices consumers face, lower demand –High wireless taxes (CA wireless taxes exceed 19%) could adversely affect low income customers Regulating wireless service terms will lead to unplanned effects

5. 3. The Perfect Is the Enemy of the Good Regulation frequently strives for perfection Man is Imperfect, there are going to be complaints Cost of fixing “last” complaint likely to far exceed benefits

6. A Policy Paradigm Significant Market Failure? Government Policy Likely to Improve Things? YES Consider Implementing Policy YES STOP NO STOP NO

7. A Hippocratic Oath for Policy Makers Don’t intervene if you don’t have a good reason If you do intervene, try to do more good than harm

8. Robert W. Hahn Executive Director AEI – Brookings Joint for Regulatory Studies AEI – Brookings Joint Center for Regulatory Studies Robert W. Hahn Executive Director AEI – Brookings Joint for Regulatory Studies AEI – Brookings Joint Center for Regulatory Studies 1150 17 th Street, NW Washington, DC 20036 Phone: 202.862.5909 Fax: 202.862.7169