May 2010

The FCC's retransmission rules now perversely cause consumers to suffer unnecessary collateral damage in retransmission negotiations -- the exact opposite outcome the FCC wants -- in large part because the FCC's retransmission rules have not kept pace with dramatic competitive and technology changes over the last two decades.  

• The FCC should, and easily can, protect consumers from becoming unnecessary collateral damage in retransmission negotiations by simply updating their nearly twenty-year-old FCC regulations with petitioned common sense modifications that ensure consumers never find themselves unnecessarily in the "bulls-eye" of the FCC's out-dated retransmission rules again.

To better understand how rules that possibly made sense in 1992, could produce predictably perverse and dysfunctional consumer outcomes today, think of the retransmission rules, like a regulatory "gun" that was originally and permanently pointed directly at a 1992 cable monopoly and no one else. 

Goobris: (noun) Google's frequent total lack of self awareness when it says something publicly. 

In the Reuters article "Google to fight Government if AdMob deal blocked," Google CEO Eric Schmidt exhibited characteristic goobris in criticizing the FTC's review of the Google-AdMob acquisition.

First, Mr. Schmidt amazingly complains that the FTC's extended review of the acquisition left AdMob at a "significant disadvantage" competitively vs. Apple.

In not disapproving the Google-AdMob deal as the FTC staff recommended, the FTC effectively is ceding at least most of the mobile ad market to a Google monopoly.

• In a clearly tortured, conflicted and political statement, the FTC justified their approval despite the evidence and their merger guidelines by saying: "The Commission has reason to believe that Apple will quickly become a strong mobile advertising network competitor." 

I.  The FTC's political judgment to bet on Apple rapidly becoming a substantial competitor to Google in a years time (and to disregard the evidence and the FTC's new horizontal merger guidelines) -- has the real world effect of ceding at least most of the mobile ad market to Google. Why?  

First, by the FTC's own admission, Apple was not an advertising competitor at all before it bought #3 mobile ad provider Quattro. Thus, implicit in this FTC decision is a very big, going-forward assumption that the new synergies of Apple-Quattro in the next year will more than offset the loss to competition of AdMob, the clear #1 mobile ad competitor and first-mover with about half of the market.

Seventy-four House Democrats and thirty-seven Senate Republicans wrote letters (here, here) to the FCC today that essentially told the FCC that their announced plans to deem broadband a common carrier service are over-reaching and out-of-bounds.

• In Washington-speak, the letters communicated that the FCC is trying to decide an issue that is "above their paygrade" to decide. 

In turn, these letters appear to have prompted the Chairmen of the FCC's House and Senate authorizing committees and subcommittees to announce today that they will hold meetings with key stakeholders to discuss updating the Communications Act legislatively -- another strong message to the FCC that Congress makes communications policy, not unelected commissioners at the FCC.

The clear political message to the FCC here is that they have wrongly put the cart before the horse, and that they must seek a "solid bi-partisan political foundation" for U.S. broadband policy... before they can achieve their desired "solid legal foundation" for the FCC.