Congress

Reed Hundt is up to his old "managed-competition" tricks again. 

• The former Clinton-Gore FCC Chairman is now Vice Chairman of Frontline Wireless, which wants the FCC to auction spectrum to them requiring net neutrality/open access -- so effectively no company will be able/or want to pay much for the 700 MHz spectrum -- and so Frontline Wireless could capture this most valuable spectrum available at the market-managed price of -- pennies on the dollar. 
• It is highly relevant that Frontline is financially backed by big Google investor/Board members; their involvement was probably orchestrated by Google Senior advisor Al Gore, Hundt's political benefactor in the Clinton-Gore Administration.  
• A big part of Google's strategy for value creation and 90% gross margins is to take intellectual property without permission or compensation and to secure use of bandwidth and spectum below market cost. 
• True to form in this new venture, Mr. Hundt has never met a marketplace that he didn't think he could personally "manage" better than the free market can.

The FCC should be very very careful in following this policy charmer's latest government intervention advice on the 700 MHz auction, because he has been personally responsible for most all of the largest wild goose chases that the FCC has been involved in over the last few decades.

Bloomberg reports that Democratic Presidential candidate John Edwards "backs Google's push for wholesale leasing of airwaves."

Let's cut to the chase here.

Google has proposed a self-serving idea for real-time auctions of spectrum that might be able work in five to ten years time, but is not at all relevant to, or practical for, the auction scheduled for next winter.

• Google's idea is really a clever diversion and stalking horse for wireless net neutrality -- a sweet-sounding name for government-subsidized free spectrum or "corporate welfare for dotcom billionaires."  
• More importantly, Google's proposal would effectively undermine the FCC's ability to raise the maximum amount in the upcoming 700 MHz auction for American taxpayers.
• Presidential candidate Edwards appears more interested in pandering to powerful Democratic special interests and fundraisers that can contribute to his lagging campaign, than being a good steward of taxpayer money.  
• And who might those special interests be that Mr. Edwards is pandering to?
• Google, whose employees in the last election cycle contributed 98% to Democratic candidates;
• Al Gore, Google's senior Advisor, (who is now seriously rich, but quietly so, from his Google options) and who is ringleader of "Google's Poodles" Google's very own astroturf group the "Open Internet Coalition."  and
• Former Clinton-Gore FCC Chairman, Reed Hundt, Chairman of Frontline spectrum company, funded in part by Google-related money, which is seeking to rig the upcoming FCC spectrum auction for their own commercial benefit under the guise of an "open Internet."

Don't be fooled by the clever diversions surrounding the FCC's upcoming 700 MHz auction.

Republican Presidential candidate Mike Huckabee was reported on a blog to have "supported" net neutrality in a conference call with bloggers.

• Don't believe this is his "official" policy position for a minute.
• When conservative Mike Huckabee learns both sides of this issue and is not blindsided on a conference call on a subject he was unfamiliar with, and which was then grossly mispresented, I am convinced he will not "support" net neutrality.
• No legitimate economic conservative like Mike Huckabee, who wants to radically downsize the Federal Government, will support a Big Government program to regulate the Internet for the first time.
• He clearly was not at all familiar with the issue nor that nearly all the biggest funding supporters of net neutrality are liberal groups like Moveon.org who believe in digital socialism and radically reducing intellectual property rights on the web.
• When Mike Huckabee's campaign staff research this issue, (we recommend they read the one pagers at the top right hand side of the www.NetCompetition.org website) there is no way he will support net neutrality as part of his official campaign.
• It would be totally inconguous with his other limited Government views.
• The last thing conservative Mr. Huckabee would want is to put the current "free and open" Internet under Government control.
• Not gonna happen.

This is another in a long line of supposed "endorsements" of net neutrality that result from NN proponents consistent misrepresentation of the facts and gross use of unsubstantiated allegations of a problem.

Ad Age reports that the two largest Advertising Associations have asked antitrust officials to look into the spate of major advertising acquisitions; Google-DoubleClick, Microsoft aQuantive, Yahoo-Right Media, and WPP-24/7 Real Media.

• The thrust of the letter:
• "During the past month, there have been several major acquisition announcements in the online advertising marketplace... These mergers, if approved, certainly would change the online advertising marketplace. As such, those proposed combinations deserve careful scrutiny. It is essential to ensure that none of these combinations restrict competition in the Internet advertising marketplace."

Why is this significant?

• First, the advertising community does not like to make waves or speak ill of any potential client -- in any way in public -- it goes against their normal business practice.  
• The fact that they did speak up and that they did ask the Government to give all these mergers close scrutiny -- was their indirect/politic way of getting their point across without stepping on any one company's proverbial toes.  
• Second, I think they are genuine in their shock and bewilderment that their entire industry has been transformed before their eyes in a matter of weeks.
• The online technology players have swooped in and made it clear that  technology and measurement tools are advertising's future.
• The tail will now wag the dog.
• Advertisers and advertising agencies must adapt or be left in the dust.
• WPP, for one, has quickly adapted with its purchase of 24/7 Real Media.

It is my view that there is a whole lot more going on here than meets the eye.

Google's dominance of the search industry continues....

• Can you say:
• "search" and "antitrust" in the same sentence?
• Can you say:
• "Googleopoly?"

The San Diego Union-Tribune "gets it" -- in  its editorial on Google:

•  "The Google Threat, Needed: a guaranteed private search engine."  

A couple of my favorite parts of this dead on editorial:

• "Google's emergence as one of the scariest companies on the planet continues with a story in the Financial Times describing the Silicon Valley firm's goal of maximizing and cataloging personal information gleaned from every user's use of its vastly popular search engine."
•  "... but should mortify Google's users – because the company has never come close to adequately acknowledging the vast privacy concerns raised by its already massive database."
• "... The potential for government snooping, harassment, financial manipulation, blackmail and all sorts of online crime is stunning."

Add to the list of scary things Google is working on is a "truth meter" where Google CEO Eric Schmidt posited in FT just before the last US congressional election, that in the future Google could help voters gauge in real time whether a politician was telling the "truth" or not.

Both the New York Times and the Wall Street Journal are reporting that the Federal Trade Commission (FTC) will substantively investigate the proposed Google-DoubleClick merger.

• This comes on the heels of an AP report that "an Independent European Union panel has launched an investigation into whether Google Inc.'s Internet search engine abides by European Union privacy rules." Google's search share in Europe is reportedly 75% and 90% in Germany, so we should all expect the EU to also play a formal and significant role in the review of Google-Doubleclick.

Why is the FTC review development significant?

Senate Democrats are attempting to sneak through the back door what they cannot get through the front door of the "free and open"  policy process.

The Inouye "Broadband Data Improvement Act" is really a long term trojan horse for net neutrality and heavy regulation of broadband.

• The bill requires that the FCC "establish a new definition of second generation broadband to reflect a data rate that is not less than the data rate required  to reliably transmit full-motion, high definition video." 
• "Reliable" "high-definition" broadband is certainly not DSL or existing cable modems.

The clever ruse in this innocuous-sounding language is to redefine broadband competition as a total abject failure, and to declare broadband market failure, so the pro-regulatory types can regulate broadband becuase it is not competitive, or is at best a future duopoly.

I'd like to welcome back to the playing field, the reconstituted "ItsOurNet Coalition" which inexplicably went away in January, but has now returned as "The Open Internet Coalition!"

Now we finally know what they were doing while they were gone from the scene for four months...

• They were losing weight.
• The coalition shed the excess pounds of Microsoft, Yahoo, and Amazon.
• Who needs them!
• It must have been too burdensome for Google to have to accomodate these more reasonable and less-regulatory members of the previous ItsOurNet coalition.
• Now the new "slimmed down" coalition can be faster, more nimble and united around being pro-regulatory for others.
• The remaining coalition members are a much tighter and cohesive bunch.
• There's now no one big or bold enough to challenge the Big Dog and ringleader Google. 
• There's also no one in the coalition who believes in a free market broadband policy.
• And it is basically companies and groups whose common thread is they have hired up all the under-employed pro-regulatory staffers who hate the telcos and cablecos.
• The remaining group is of one mind -- their nirvana "democracy".

I was frankly surprised that the new group chose not to be forthright and embrace its new "slimmed-down" public physique.

Self-described "Internet inventor" and former Vice President Al Gore has a newly released book "The Assault on Reason" in which he comes out of the shadows and into the limelight as a leading public proponent of net neutrality.  

The Save the Internet coalition blogged/bragged about the book in its post: Al Gore: Net Neutrality is the key to a better democracy."  They lifted some Gore quotes that gave them lots of "warm fuzzies" inside:

• “neutrality should be the central tenet that will set us on a path toward an open, democratic Internet where free speech and free markets are encouraged.â€?
• Wait a minute. The term "net neutrality" was only coined as late as 2002 by a socialist Columbia Law Professor!
• But Gore claims to have invented the Internet before 1992!
• Who's right? 
• Moreover, Mr. Gore, factually the net has never been neutral.
• “More than one and a half million citizens contacted Congress and more than eight hundred organizations joined the SavetheInternet Coalition, organized by the upstart media reform organization Free Press, using innovative online mobilization tactics …â€?
• Thank you Mr. Gore from coming out from the shadows and coming clean by publicly endorsing the efforts of, and tacitly acknowledging your strong ringleader role in managing "Google's poodles",  SaveTheInternet and FreePress.
• The still unanswered question is how many tens of millions of dollars has Mr. Gore made from his boatload of Google options/warrants granted to him as "Senior Advisor" to Google?"
• And where are the disclosures in the book that most all of Mr. Gore's multi-ten million dollar net worth is in Google shares -- constituting a huge undisclosed conflict of interest on the issue of net neutrality.    

• “I truly believe the most important factor is the preservation of the Internet’s potential for becoming the new neutral marketplace of ideas that is so needed for the revitalization of American democracy,â€? he writes. “People are not only fighting for free speech online, but they are also working to keep the Internet a decentralized, ownerless medium of mass communication and commerce.â€?