GUESTEDITORIAL Peter Bradford

Market-Based Speech?

7’hese comments ure based on the author‘s remarks to u meeting of the Harvard Elec- tricity Policy Group, chaired by William W. Hogan.

I n discussing whether a move to ward a real competitive market in

electricity would be worth the trouble, we often point to experience in telephone, trucking, the gas indus- try and the airlines.

Let’s try a more fanciful model. Pic- ture this gathering as a grid, con- strained by the inability of the human ear to process more than one voice at a time.

We now allow Bill Hogan to regu- late who talks, how long and with how much feedback. Bill proceeds on the basis of his notions of polite- ness, fairness and aggregated de- mand. The short-run dispatch sys- tem has little to do with supply, demand or economics - except inso- far as these factors may influence the membership list. Spoken words can- not be stored. Much may be lost in transmission, but at any given mo- ment no more words can be heard than are being spoken. Words that pass over the aural bottleneck must be instantly processed or lost.

As a result of a relatively long-run arrangement with Bill, I am presently on a must-run basis; Ralph Cavanagh is on spinning reserve. John Ander- son’s words-per-minute capability

Peter Bradford is chairman of the Nao York State Public Service Commission.

September 1994

poses voltage stability and reactive problems for our grid and everyone’s dispatch depends entirely on Hogan. You consumers have had no voice in these arrangements.

Supposing we were to move to something like a market basis to allo- cate speaking privileges. Minutes of speech could be a commodity. Speak- ers could be turned on and off, not by Bill Hogan, but by the consensus re- sult of buttons in front of each of us with results aggregated anony- mously. Choices among raised hands would depend on whom we wanted to hear on the topic of the mo- ment. Speakers could be compen- sated per minute of delivery [per word might unjustly enrich Mr. An- derson). The compensation per min- ute could increase if the demand for the speaker were especially high (as determined by another knob on our consoles). Perhaps spot prices could be quoted on electronic nameplates by those wishing to speak. A nega- tive price (i.e., a willingness to pay to speak) would be a conceivable expres- sion of wealthy frustration.

W ho can doubt that such a sys- tem would produce a very

different meeting? We would all have to think less about what we wanted to say and more about what others needed to hear. Sessions would start on time to maximize the available minutes. Pm-meeting and coffee-break marketing would re- place our current formless network- ing. Bach of us would have to im- prove our own words-per-thought

ratio relative to that of our competi- tors because - as the efficiency advo cates teach us - people buy ideas, not syllables.

Whether questions would count as speech or DSM is one of those transi- tional issues that we need not deal with just now. However, Hogan’s ability to promote community goals through the dispatch process would have to be replaced by either a public interest admission fee or a uniform fee per minute of speaking or listen- ing. Money from the resulting Public Interest Pot (PIP) would be allocated by a governing board set up by us col- lectively or by Harvard. Some of it would be used to retire stranded speakers early.

A riveting speaker like Ralph

Cavanagh would prosper. His foes, alleging market imperfec- tion and externalities, would seek to handicap him by unbundling style from content but would be over- whelmed by the transaction costs. Their strategy might fail in any case, for Ralph’s blend of style and infor- mation might have more market ap- peal than would some-fountain of “plain vanilla” information.

Those of you who have sat through many NARUC meetings have reason to hope devoutly that market-based speech dispatch sweeps rapidly through theland. We who now regu- late, however, must continue to search for experimental proofs and manageable transitions if we want to keep even a short-run seat at some lu- crative table. n

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