Letter to Grover Norquist on Telecommunications Regulation

Letter to Grover Norquist on Telecommunications Regulation

Smith and Singleton Sign Letter to Mr. Norquist
February 25, 2004


Mr. Grover Norquist


Americans for Tax Reform

1920 L Street, NW, Suite 200

Washington, DC  20036


Dear Grover:


            We are writing to ask you to reconsider your pro-regulatory views on telecommunications issues – views you expressed most recently in your January 26 letter to President Bush.


            Your position on telecommunications deregulation is contrary to the views of the vast majority of free-market economists and policy analysts.  Your continuing advocacy of the pro-regulation position is destructive to the cause of limited government.  To the extent your efforts are successful, the effect will be to reduce capital formation, slow job creation, impede productivity growth and stifle individual liberty and economic freedom.


Telecommunications regulation is complex, which is why a number of us who have studied the issue have sought to brief you on the results of our research.  As you know, studies by virtually every major free-market think tank (a partial listing of which is attached) have demonstrated the need for deregulation.  As the attached articles from the Cato Institute, the Heritage Foundation and the Wall Street Journal editorial page suggest, this view is widely shared in the free-market community. 


We are particularly concerned that you have allowed your usual good judgment on matters such as this to be swayed by superficial concerns about politics.  Certainly that would seem to be a reasonable interpretation of your January 26 letter, which focuses on one of the phrases that has been used to describe telecom deregulation (“national broadband policy”), and on the fact that deregulation has support from some labor unions and Democratic politicians.


On these issues, you should consider three points.  First, the sort of “industrial policy” you attack in your letter is precisely what is in place now, left over from the prior administration.  By contrast, as the Journal editorial makes clear, the goal of “a clear national broadband policy” is “to deregulate the market.”  Second, deregulation, by any name, is a desirable goal.  Third, political support for doing the right thing – whether it is cutting taxes or reducing regulation – should not be rejected simply because it comes from outside the traditional “free market” base.


By the same token, and as you have often said, there is nothing so destructive as when a leader of the free market movement “joins the other team.”  On this issue, we very much hope we can persuade you to come back to the side of limited government, where we all know you belong.





Sonia Arrison

Director, Technology Studies*

Pacific Research Institute


Paul Beckner


Citizens for a Sound Economy


Wayne Brough

Chief Economist

Citizens for a Sound Economy


Jeffrey A. Eisenach

Board Member and Past President

The Progress & Freedom Foundation


Raymond L. Gifford


The Progress & Freedom Foundation


Tom Giovanetti President Institute for Policy Innovation


Thomas W. Hazlett

The Manhattan Institute


James C. Miller III

Senior Fellow

Hoover Institution


Sally C. Pipes

President and Chief Executive Officer

Pacific Research Institute


Solveig Singleton

Senior Policy Analyst

Competitive Enterprise Institute


Fred L. Smith, Jr.


Competitive Enterprise Institute


John C. Wohlstetter

Senior Fellow

Discovery Institute

* Affiliations listed for identification purposes only.









·         Barry M. Aarons,  “Don't Call, Just Send Me an Email: The New Competition for Traditional Telecom”, Institute for Policy Innovation, January 27, 2003. http://www.ipi.org/ipi/IPIPublications.nsf/3CC2D910CE3D7F38862567D9005A288F/1AF69786CF30FD9D86256D720016A5D2?OpenDocument


·         Sonia Arrison, “Telescam: How Telecom Regulations Harm California Consumers,” Pacific Research Institute, Aug. 27, 2003. http://www.pacificresearch.org/pub/ecp/2003/epolicy08-27.html


·         Theodore R. Bolema, Diane Katz, "Crossed Lines: Regulatory Missteps in Telecom Policy,” Mackinac Center for Public Policy, Dec. 2003. http://www.mackinac.org/archives/2003/s2003-04.pdf


·         Wayne T. Brough, Ph.D.,  “State Economies Can Benefit from Broadband Deployment,” Citizens For a Sound Economy, Dec. 1, 2003. http://www.cse.org/reports/Broadband_Study.pdf


·         Robert W. Crandall, J. Gregory Sidak, Hal J. Singer, “The Empirical Case Against Asymmetric Regulation of Broadband Internet Access,” Berkeley Technology Law Journal, 2002. http://www.criterioneconomics.com/articles/singer_broadbandarticle.pdf


·         Clyde Wayne Crews Jr. and Adam Thierer “What's Yours Is Mine: Open Access and the Rise of Infrastructure Socialism," CATO, (2003). http://www.catostore.org/index.asp?fa=ProductDetails&method=cats&scid=30&pid=1441099


·         Jeffrey A. Eisenach and Thomas M. Lenard, "Telecom Deregulation and the Economy: The Impact of "UNE-P" on Jobs, Investment and Growth," The Progress & Freedom Foundation, Jan. 2003. http://www.pff.org/publications/communications/pop10.3unepimpact.pdf


·         Anne Layne-Farrar, NERA Economic Consulting; Robert W. Hahn, AEI-Brookings Joint Center; Peter Passell, Milken Institute,  “Federalism and Regulation,” http://www.aei.org/docLib/20040203_v26n47.pdf


·         James L. Gattuso and Edwin Meese III, “Votes May Be Hiding in Heap of Regulations,” Heritage Foundation, Feb. 3, 2004. http://www.heritage.org/Press/Commentary/ed020304a.cfm

·         James L. Gattuso, “Local Telephone Competition: Unbundling the FCC's Rules,” Heritage Foundation, Feb. 10, 2003. http://www.heritage.org/Research/Regulation/bg1621.cfm


·         James L. Gattuso, “The Tauzin-Dingell Telecom Bill: Untangling the Confusion,” Heritage Foundation, Feb. 25, 2002. http://www.heritage.org/Research/InternetandTechnology/EM802.cfm


·         James L. Gattuso, "Bundles of Trouble: The FCC's Telephone Competition Rules," WebMemo #432, Jan. 21, 2004. http://www.heritage.org/Research/Regulation/wm432.cfm


·         Raymond L. Gifford and Adam Peters, "Principles for Texas Communications Law,” The Progress & Freedom Foundation, Dec. 2003. http://www.pff.org/publications/communications/pop10.25texas.pdf


·         Diane Katz, “FCC Order Will Fail to Open the Telecom Market,” Mackinac Center for Public Policy, Sep. 8, 2003. http://www.mackinac.org/article.asp?ID=5736


·         Joseph S. Kraemer, Richard O. Levine, and Randolph J. May, "Trends in the Competitiveness of Telecommunications Markets: Implications for Deregulation of Retail Local Services,” The Progress & Freedom Foundation, Dec. 2003. http://www.pff.org/publications/communications/121103specialreportcontestability.pdf


·         Randolph J. May, "A Free-Market Scorecard,” Regulation Magazine, Oct. 2002. http://www.pff.org/publications/communications/102202scorecard.pdf


·         Solveig Singleton, “Federalism Heresies for the Internet Age,” Competitive Enterprise Institute, Jan. 30, 2004.  http://www.cei.org/gencon/016,03838.cfm


·         Solveig Singleton, “Getting Through the Terrible TELRICs,” Competitive Enterprise Institute, Dec. 31, 2003. http://www.cei.org/gencon/016,03793.cfm


·         Solveig Singleton, “Review of the Commission’s Rules Regarding the Pricing of Unbundled Network Elements and the Resale of Service by Incumbent Local Exchange Carriers (WC Docket No. 03-173),” Competitive Enterprise Institute, Dec. 17, 2003. http://www.cei.org/pdf/3778.pdf


·         Solveig Singleton, “Written Submission Of the Competitive Enterprise Institute Regarding the Telecom & High Tech Manufacturing Sector,” Competitive Enterprise Institute, July 18, 2003. http://www.cei.org/pdf/3634.pdf


·         Solveig Singleton and Fred L. Smith, Jr., “An Open Letter To The Bush Administration On Its Plan To Unbundle Local Phone Networks,” Competitive Enterprise Institute, Mar. 10, 2003. http://www.cei.org/gencon/027,03388.cfm


·         Adam Thierer, " An Open Letter to Pro-Regulation Conservatives," TechKnowledge No. 58, CATO, Feb. 18, 2004. http://www.cato.org/tech/tk/040217-tk.html


·         Adam Thierer, "Was the UNE Triennial Review Worth the Wait? Part II: The Substance,” TechKnowledge No. 58, CATO, Sept. 15, 2003. http://www.cato.org/tech/tk/030915-tk.html


·         Adam Thierer, "Was the UNE Triennial Review Worth the Wait? Part 1: The Process,” TechKnowledge No. 57, CATO Aug. 29, 2003. http://www.cato.org/tech/tk/030829-tk.html


·         "Broadband Fiasco," Wall Street Journal, Feb. 11, 2004.