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According to DowJones, FCC Chairman Kevin Martin is proposing some of the net neutrality/open access regulation that Google requested for 22 of the 60 MHz of prime 700 MHz of spectrum to be auctioned off by the FCC in early 2008 for use in about 2010.

• A similar USA Today cover story got a key part of the story wrong in implying that the net neutrality/open access conditions would apply to  the whole 700 MHz auction, not just to 22 of the 60 MHz being auctioned.

I have three points to make about Chairman Martin's reported net neutrality/open access proposal.

The Washington Post gave a lot of "free" ink to former FCC Chairman Reed Hundt today to push for his Frontline Wireless corporate welfare scheme. The article also provides a "bay window view" of Mr. Hundt's perverted view of "competition."

• Mr. Hundt said: "We're asking the FCC to place conditions on the sale of the license, just like zoning on real estate."
• Competition through zoning regulations!
• This captures the essence of Mr Hundt's "market" views. He has always thought "competition" was much too important to be left to the marketplace.
• Mr. Hundt's entire tenure as FCC Chairman was characterized with a deep distrust of free market forces and a fondness for writing very detailed regulations that heavily tilted the playing field to guarantee his desired outcomes.

Now that his company has $3b in capital and is prepared to raise up to $10b in the next five years, according to the Post, why is he so afraid to compete in the auction like everyone else?

Frontline's Reed Hundt is mounting a furious eleventh hour effort to finagle a backroom sweetheart deal for his company from the FCC, in the 700 MHz auction. He attacked the outstanding op ed in the Washington Post by Robert Hahn and Hal Singer in both the Post and in RCR.  Our former Big Government FCC Chairman, Mr. Hundt also apparently has lost his cool and perpsective in railing against the rollout of the new, innovative and already successful iPhone as somehow a market failure that only his company can cure.

Given the ongoing reporting of claims by net neutrality proponents that US broadband deployment is falling behind our international competitors (like the USA Today article in this link suggests), it is helpful to pull together some of the best analyses I have seen that debunk these claims by the OECD/CWA.  

For those who care to more substantively review the facts, evidence and merits of this very important public policy question, I highly recommend reading the following four sources linked in this blog, which all effectively and differently debunk the claim the US is falling behind on broadband:

Kudos to Robert Hahn and Hal Singer for their outstanding op ed in the Washington Post "Earmarked Airwaves."

• The editorial cogently presents the fork in the road that faces any major FCC decision: to follow law, which promotes competition and market-driven outcomes, or to freelance and try and "manage" competition and pick winners and losers in advance through "spectrum earmarking."
• FCC history is littered with freelance "managed competition" failures, but two are particularly ignominious and highly relevant to this 700 MHz auction:
• the illegal UNE-P scheme to rig telecom competitive outcomes following the 1996 Telecom Act; and
• the Nextwave auction scandal that kept 30 MHz of prime spectrum fallow and tied up in court for almost a decade.

At its core a spectrum auction is the quintessential type of competition. The auction law's purpose in 1993 was to use market forces, competition, to allocate the public's asset most appropriately, largely because previous FCC spectrum allocation processes were so ineffective, unfair and prone to serious abuse and graft.

• While no process is perfect, a clean competitive auction process has proven highly effective in rewarding US taxpayers and fostering a growing and highly competitive wireless marketplace that greatly benefits consumers.

This 700 MHz auction may be shaping up to be FCC Chairman Kevin Martin's legacy moment: will it be marked by promoting competition and market-based outcomes or will it be marked by standing on the auction scales to ensure the spectrum is "earmarked" to the predetermined, chosen "winner" -- in this case former Clinton-Gore FCC Chairman Reed Hundt's Frontline Wireless company.  

You gotta love how the free market works when left alone by the Government!

Just as Frontline and others are demanding that the government has to intervene in the 700 MHz auction to "create" a third broadband pipe, the free market finds another way to solve these market problems without the Government.

One of the most significant developments in the spectrum world today was not the hot air at the Senate Commerce Committee hearing, but what happened in the free market -- DirecTV and Echostar signing agreements with Clearwire to sell their WiMax broadband service.

The cover story in the Wall Street Journal today "A fight over what you  can do with your cellphone; Handset makers push free features for which carriers pay for" was obviously perfectly-timed and placed by open access/net neutrality proponents trying to influence the Senate Commerce Committee hearing today on the FCC's 700 MHz auction.

• The article offers a list of complaints for net neutrality supportive Senators to browbeat competitive wireless carriers with.

What the article ignores is the broader and essential context of this issue and debate.

FCC Commissioner Robert McDowell gave an outstanding speech today at the Broadband Policy Summit in which he did the single best job I have seen totally debunking the OECD rankings that purportedly indicate the US is falling behind on broadband.

Commissioner McDowell explains with example after example -- how skewed the OECD methodology is.

• My personal favorite line in the speech was on how the OECD methodology is skewed against the US:

• "...even if every existing broadband subscriber in America had a fiber-fed 100 mbps broadband connection, we would only rank 12th."

Like the discredited and shameful congressional practice of fleecing the American taxpayer with "earmarking" public funds for special interests, Frontline-Google and eBay-Skype are asking for the equivalent of special interest commercial "earmarks" from the FCC.

It is outrageous that the FCC is actually entertaining these proposed special interest scams against the American taxpayer. 

• The FCC should keep the auction free of the corrupting influence of spectrum or policy "earmarks" for the obvious benefit of only one company lobbying the process for permission to pick the American taxpayers' pocket.

What am I talking about specifically? Two special interest spectrum/policy "earmarks" are getting a lot of press attention lately.

Yet another state legislature has rejected passing a law mandating net neutrality -- this time in Maine, the home state of Senator Olympia Snowe, one of net neutrality's primary sponsors and highest profile proponents in the US Senate.

• Moveon.org/SaveTheInternet are now 0-3 in their hand-picked states where they thought they had the best chance of passing a version of the Senate Snowe-Dorgan bill or the House Markey bill from last year -- and where they focused their efforts.  
• Previously, Moveon.org?SaveTheInternet failed to pass net neutrality legislation in Michigan, and Maryland.

To let the net neutrality proponents save face, the Maine Senate passed a resolution, not legislation, that asks for a study on net neutrality to be completed next year.

• This is the same outcome as has occurred at the Federal level as both the FTC and FCC are studying net neutrality and seeking comments.
• Both the FTC and the FCC have said that they do not see a current problem in the marketplace concerning the alleged problem of net discrimination.
• Moreover, the Maine resolution also recognizes that net neutrality is a federal issue and that Maine does not have jurisdiction over the net neutrality issue.

I fully expect that Moveon.org and SaveTheInterent will continue to waste valuable state legislative time and resources on a problem they cannot even define or prove exists.  

• They don't seem to "get" or care that the Internet is Federal jurisdiction and Federal policymakers at every official level have rejected calls for net neutrality legislation.