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Corporate Welfare

Why New FTC Will Be a Responsibility Reckoning for Google Facebook Amazon

“The Responsibility Reckoning” that everyone has been witnessing over the last year evidently is finally coming to the FTC -- the Federal Government’s main Internet accountability agency in “The Era of Internet Irresponsibility” -- with the Senate confirmation of a clean slate of FTC commissioners -- Joe Simons (Chairman), Rohit Chopra, Christine Wilson, Rebecca Slaughter and Noah Phillips.

Close observers of the FTC appreciate that since Google politically shut down all five FTC antitrust probes of itself January 3, 2013, FTC antitrust and privacy accountability of Google, Facebook, and Amazon, evidently ceased, and remained dormant until yesterday’s Senate confirmation of the new FTC sheriff and deputies that will be sworn in soonest.

The facts of this de facto, 2013-2017, FTC political pardon of Internet platforms -- are overwhelming (see below.) 

Sadly, potential complainants against Google, Facebook and Amazon, got the tacit message over the last five years that the FTC’s leadership was more concerned with protecting Internet platforms’ welfare than consumer welfare, so they reasonably took their complaints to the EU.

The Huge Hidden Public Costs (>$1.5T) of U.S. Internet Industrial Policy

This post introduces a new white paper here with a first-of-its-kind, cost-estimation model of the cumulative hidden public costs of U.S. Internet industrial policy* entitled: “Internet Platform Corporate Welfare and Leechonomics.” *U.S. Internet-first, industrial policy in the 1996 Telecom Act, effectively exempted only Internet companies from: all U.S. communications law, regulation, and public responsibilities; normal non-communications Federal/State regulation; and normal civil liability for what happens via their platforms and business models.

Nutshell Summary: Sweeping Government exemptions and immunities from risks and costs overwhelmingly favor zero-sum, parasitic policy arbitrage and corporate welfare, which perversely fosters unproductive “leechonomics.” U.S. Internet policy most incents platform business that maximizes arbitrage spreads, i.e. taking maximal societal risk that un-immunized competitors can’t take, where the benefits can be capitalized by platforms, and the costs socialized to the public (>$1.5T), because the government has only exempted and immunized platforms from normal accountability and responsibility for consumer welfare. 

A Remedy for the Government-Sanctioned Monopolies: Google Facebook & Amazon

Only three online intermediary platforms command bottleneck distribution control of ~90% of online demand and ~90% of offline supply, with gatekeeper access-power over users and toll-keeper pricing-power over suppliers. They are: Google in information/data; Facebook in social sharing; and Amazon in commerce.

It is no coincidence that the all the monopolizations in the American marketplace today exclusively involve online intermediary platforms; and that they are happening in the only country in the world with a longstanding official, Internet-first industrial policy, that specifically advantages the intermedia companies with permanent blanket protection from competition, regulation, and liability.

How did Google, Facebook, and Amazon become de facto government-sanctioned monopolies?

How Internet Commons Policies Lessen Growth Jobs & Security – Daily Caller

Please don’t miss my latest Daily Caller op-ed: “How U.S. Internet Commons Policies Lessen Growth Jobs & Security.

It spotlights how U.S. Internet commons policies – where “free” means a price of zero and “open” means no property -- create winner-take all economic outcomes for the Netstablishment at the expense of everyone else.

 

How Google Is Anti-employment Anti-property & Pro-regulation

Google’s unprecedented Obama Administration influence and its self-serving anti-employment, anti-property, and pro-regulatory policy agenda, are on a collision course with the job-creating, pro-property, deregulatory Trump Administration growth agenda.

Keep watch to see who adapts to whom and how.

I.  Google’s Unprecedented Lobbying Influence

Current Alphabet-Google Chairman Eric Schmidt enjoys the privilege of being the only corporate leader of a publicly-traded company on the President’s nineteen member Council of Advisors on Science and Technology.

Will FCC Allow Google to become the Fox that Guards its AllVid Henhouse?

A fox should not be allowed to guard a henhouse, unless the farmer wants the fox to eat all the hens.

Neither should the world’s fiercest corporate opponent of copyright, Google, be allowed to be the FCC’s technological guard of $200b worth of annual video programming revenues, in the FCC’s AllVid Set-Top Box rulemaking, unless the FCC wants Google-YouTube and others to be able to pirate the nation’s video-programming property without paying for it.

Top Takeaways from Appeals Court Upholding FCC Title II Internet Order

The DC Circuit Court of Appeals’ 2-1 majority decision to completely uphold the FCC Open Internet Order on every single one of the ~couple dozen argued points, after the court had twice before not granted the FCC complete deference in overturning the FCC on these matters, surprised most everyone given the number and seriousness of the legal challenges put forth, and the selective skepticism the judges signaled at oral arguments.

Given that this total support of the FCC was not anticipated, what does this potentially seminal court precedent mean practically?

For now, the FCC effectively enjoys complete deference from this Court on Open Internet issues.

The majority dismissed every single one of the petitioners’ best legal, process, and constitutional challenges and proactively cauterized them with court assertions that the FCC’s actions were reasonable, supported by the evidence, and compliant with the APA, or that the challenges were unpersuasive.

FCC’s Competition Policy Blind Spot for Dominant “Edge” Incumbents - GAFA

The evidence increasingly proves that Google, Apple, Facebook, and Amazon, companies collectively known as “GAFA,” are the dominant consumer-technology, “edge” platforms/incumbents in their respective communication sector markets of: information, smartphones, social media, and ecommerce.

The evidence below shows Google, Apple, Facebook, and Amazon to clearly be the emerging dominant communications incumbents of the 21st century communications sector ecosystem and that an apparent FCC assumption that “edge” companies cannot be a competition problem is both naïve and erroneous.   

Despite the FCC’s “competition, competition, competition” policy mantra, this GAFA dominance reality has not kept the FCC from slavishly favoring the dominant GAFA incumbents, as “insurgent” upstarts deserving of special FCC treatment and protection, in all of the FCC’s current major communications policy revamps it is making without Congress: i.e. its Title II Open Internet Order; its Title II ISP-only privacy rules; its AllVid set-top box rules; and its implicit wireless policy of favoring spectrum sharing and unlicensed spectrum over spectrum auctions and licensing. 

Google’s Growing US Search/Android Share Complicates FCC’s AllVid Proposal

[Note: this blog was submitted to the FCC as a reply comment in the AllVid Set Top Box NPRM.]

As more evidence comes to light exposing Google’s much increased search and Android dominance in the U.S. since the FTC closed its search and Android antitrust probes in January 2013, it only becomes clearer that the FCC’s AllVid proposed rulemaking to “Unlock the [set-top] Box” is obviously anticompetitive overall, not pro-competitive as the FCC naively claims.

(A brief context refresh is needed here. In a nutshell, Google is the primary impetus behind the FCC’s controversial AllVid set top box proposal that would force U.S. pay-TV providers to effectively open-source  cable set-top boxes and the $200b worth of proprietary video programming/information that flows through them, so that Google and other edge platforms could monetize that proprietary video programming without a license -- for free.

Must-Read: Intercept’s Exposé on Google’s Remarkably Close White House Ties

The Intercept’s exposé The Android Administration: Google’s Remarkably Close Relationship With the Obama White House, in Two Charts” is an eye-opening, must-read for anyone interested in Google’s outsized power and political influence, or in the integrity of the U.S. Government’s public accountability and impartiality in administering justice and the federal policymaking process -- free of commercial and financial conflicts of interest.  

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Q&A One Pager Debunking Net Neutrality Myths