attempt to document the results of ETIP ́s regulatory projects, which investigate whether private sector innovation is generated by changes in regulatory agencies. In December 1978, the Regulatory Processes and Effects Project moved from The Urban Institute to the Performance Development Institute (PDI) as the result of a competitive award process. Regulatory Processes and Effects Project teams are conducting short, exploratory efforts, significant explorations of expectations and reality, and assessments of fully developed regulatory process changes under various regulatory situations.1 The following regulatory agencies are (or have been) involved: Environmental Protection Agency (Air, Pesticides, and Water), Food and Drug Administration, Federal Energy Regulatory Commission, Federal Trade Commision, Interstate Commerce Commission, Nuclear Regulatory Commission, Occupational Safety and Health Administration, and The Regulatory Processes and Effects Project not only helps to develop actual regulatory administrative experiments, but also helps formulate a generalizable body of methods for implementing and assessing the effects of regulatory changes on commerce, industry, and technological innovation. 1. ETIP prefers to use the strategy of "administrative experimentation" when applicable. An administrative experimentation stragegy (1) helps to bring about a change in the performance or operation of an agency, and (2) improves the understanding of the relationship between the change introduced and the results observed. Thus, an administrative experiment is conducted more in the sense of carefully evaluated change, and not in the social sciences sense of change controlled by the researcher, according to certain prescribed rules, solely for research purposes. A "quasi-experimental" research design may be the best that one can do. See, for example, Campbell, Donald T., "Administrative Experimentation, Institutional Records and Nonreactive Measures," Improving Experimental Design and Statistical Analysis, Stanley, J.C., ed., Chicago: Rand McNalley, 1967. Thompson, Charles W. N., and Rath, Gustave J. "The Administrative Experiment: A Special Case of Field Testing Or Evaluation," Human Factors, Vol. 16, No. 3, June 1974, PP. 238-252. Thompson, Charles W. N. "Administrative Experiments; The Experience of Fifty-Eight Engineers and Engineering Managers," IEEE In each situation, team members from ETIP, the ETIP contractor (PDI), and the regulatory agency jointly analyze an initiative in regulation, or its implementation as an experiment, and/or perform an assessment of its effects. Other interested parties are also involved, and the work is conducted under the management and review structure of the Regulatory Processes and Effects Project. Consequently, knowledge gained from similar projects can be shared. This document concerns the development of an effort with the Federal Communications Commission (FCC). In fall 1976, ETIP regulatory staff began to investigate the possibility of developing a joint project with the FCC. With the assistance of a small contract (Transcom, Inc.), it conducted preliminary background research on the Commission and developed three ideas in the area of international telecommunications. Preliminary discussions continued between ETIP and FCC for several months. During this time, the discussions revealed the need for a considerable amount of definitional and economic research on the telecommunications industry. The Common Carrier Bureau (CCB) Program Evaluation staff proposed alternatives that included public message telegraph services deregulation, 2, 3 and a Commission attorney began to investigate the legal issues involved. In June 1977, ETIP and FCC staff agreed that there was sufficient mutual interest in the development of a joint project to justify requesting formal Commission approval for continued work. The Commission granted formal approval in July 1977. ETIP and Commission staff then developed a joint project plan and interagency agreement. The plan, used by ETIP to obtain National Bureau of Standards' approval, describes: a project to be carried out with the Federal Communications 1. The initial proposals were entitled: "Eliminating Time Delay in the Section 214 International Facilities Construction Authorization Process"; "Elimination of The Requirement That International Record Carrier Rates Be Cost Justified' with Section 61.38 Support Data (Rate Deregulation For Existing Carriers)"; and "Expanded Communications Carrier Ownership of Satellite Earth Stations for International Telecommunications." Transcom, Inc. International Telecommunications Experimental Ideas For The Experimental Technology Incentives Program, December 7, 1976, 34 pages. 2. Sawicki, Leonard S. Program Evaluation, Common Carrier Bureau of the Federal Communications Commission, Draft of Internal Working Memorandum (undated). 3. The term deregulation is used here to denote a change in policy, practice, and/or rules which reduces (but does not necessarily eliminate) the burden on the regulatee. X one or more administrative experiments . . . intended to ETIP and Commission staff agreed that the public message telegraph services deregulation, if implemented, might be a change to investigate. Common Carrier Bureau staff expressed an interest in also using the proposed project as a prototype or test of ETIP's evaluation process, and suggested that, if successful, the process might be used in other areas within the Commission. In October 1977, the staffs of the CCB, ETIP, and The Urban Institute began conducting research. The following activities were included: A review of legal authority was completed in December 1977.2 CCB staff drafted a briefing memorandum outlining the charac- In July 1978, the Western Union Monopoly Inquiry proceeding An official Memorandum, Opinion, and Order opening public message services commerce to competition was prepared by CCB staff and approved by the Commission on January 25, 1979. The Commission does not view this decision to change its policy as an experiment. The decision was made for reasons of policy and not for purposes of research. What is regarded as experimental is the evaluation process being developed, and the ways in which it can be applied. The Commission has expressed a strong interest in evaluation results as noted by Commissioner Ferris. 1. U.S. Department of Commerce, Bureau of Standards, Experimental Technology Incentives Program. Experiments in Communications Regulation, Project Plan for ETIP Project 161, August 1, 1977. 2. U.S. Federal Communications Commission. "Memorandum of Law," from Richard Severy to David Irwin, dated December 7, 1977. 3. Bell, James: The FCC/ETIP Regulatory Experiment, Working Paper Number 1198-70-01 (Draft), The Urban Institute, Washington, D.C., May 3, 1978. 4. U.S. Federal Communications Commission. "Points Memorandum," by David Irwin, et al., Summer 1978. ... I intend to ensure that the Commission monitors the A proposed rulechange will be presented before the Commission, probably in April or May, 1979, and will be finalized after a public notice period. The process that the Commission and ETIP will use to manage the evaluation of the impact of the PMS deregulation over time is currently being developed. This report contains our findings to date about the operations of the Commission and a logic for the proposed project, and assesses important situations and issues in telecommunications. Using these findings and ETIP/ FCC criteria for success, the report also discusses the possibility of developing a useful evaluation. It represents the result of approximately 27 person months of ETIP and Urban Institute staff time. This project will also facilitate communications between the Commission, industry, and others, such as Congress, that might be interested. We hope that the report will encourage their interest and suggestions. We also hope that this report and subsequent products of the evaluation will contribute to our understanding of evaluation process and methodology, theories about innovation, effects of regulation, and other subjects of interest to members of government, the research community, and industry. The Regulatory Processes and Effects Project has been screening regulatory situations which might be appropriate for evaluation as administrative experiments. During the coming year, the methods we are developing will be made more widely available to users. We welcome inquiries from regulatory agencies that wish to draw upon our experience to date. further background the reader may wish to consult the Management Plan for the Regulatory Processes and Effects Project and the latest proposal to ETIP, Proposal in Response to ETIP Solicitation No. E0-78-3603. This document was prepared and submitted under Department of Commerce Contract #7-35822 by the Regulatory Processes and Effects Project. The report represents work in progress at this time, and will be revised and updated 1. U.S. Federal Communications Commission News Release. "FCC Ends Western Union Telegram Monopoly; Conditionally Approves Graphnet's Application for Domestic Service (CC Docket Nos. 78-95-96)," Report No. 14735, Action in Docket Case, January 25, 1979--CC, Separate Statement of Chairman Charles D. Ferris. periodically, as we advance and receive additional information. These reports are used for information exchange on the development of methodology and on substantive results. It should be noted that the usefulness of the findings about this deregulation can be increased or decreased by the competency of the evaluation. The evaluation must be perceived as thorough and impartial, and it must produce useful findings. |