Skype

The unprecedented release of a FCC draft staff analysis opposing the the proposed AT&T/T-Mobile transaction could backfire legally, undermining its intent to backstop the DOJ's pending lawsuit against the merger.

See my Forbes Tech Capitalist post here on the "Top Ten Flaws in the FCC's AT&T/T-Mobile Competition Analysis."

The New York Times editorial "How to Fix the Wireless Market," is embarrassingly uninformed and totally ignores massive obvious evidence of vibrant American wireless competition.

The NYT's conclusion, that more wireless regulation is needed because of "insufficient competition," results from cherry picking a few isolated facts that superficially support their case, while totally ignoring the overwhelming relevant evidence to the contrary.

The NYT completely ignores widely-available evidence of vibrant wireless competition and substitution:

For those seeking to better understand how communications competition has evolved, expanded, and accelerated to cloud communications competition, don't miss my new six-chart powerpoint presentation: "The Metamorphosis of Communications Competition," here.

My bottom line conclusion: The transformation of communications competition requires a transformation in communications law.

• Specifically, the world has changed with technology, but obsolete technology-specific laws have not.
• Communications policy obsolescence undermines infrastructure's utility and value and renders property less attractive and competitive.

I presented this new easy-to-understand framework for understanding exploding communications competition at a NetCompetition event today on Capitol Hill, which also featured excellent presentations by Jeff Eisenach, Managing Director of Navigant Economics, and Ev Ehrlich, President of ESC Company.

In another blow to its competition policy credibility and objectivity, the FCC's 308 page, 15th Wireless Competition Report, amazingly reached no conclusion about whether the wireless market was effectively competitive, despite overwhelming evidence of effective competition throughout the report and a dearth of evidence in the report of any discernible anti-competitive issues that would suggest the wireless market was somehow not effectively competitive.

• The stark incongruity between the overwhelming evidence in the report, and the absence of what should have been an easy report conclusion that the wireless market is effectively competitive, is certainly not "data-driven policy making at work.
• It appears to be politics at work to support and provide political cover for the FCC's maverick policy desire to promote de-competition policy and more expansive FCC economic regulation and common carrier-like duties a la net neutrality and data roaming -- in the face of strong opposition from Congress and the Courts that the FCC is over-reaching its statutory authority.

If only the FCC absorbed the significance of the data compiled in their own report, the FCC would conclude that the wireless market was effectively competitive.

It is stunning that Google's decision to side with Julian Assange's Wikileaks and make all the stolen secret, private and proprietary Wikileaks information universally accessible to the world via Google search, has gotten virtually no media attention, given the:

• International carnage and controversy caused by Wikileaks reprehensible actions;
• Media's broad coverage of Wikileaks;
• Google's serial disrespect for others as evidenced by its serial privacy, IP, cybersecurity, and antitrust problems around the world that have been broadly covered by the media; and
• Google is the world's leading source for accessing Wikileaks secret, private and proprietary information.

When Google's Acting CEO Eric Schmidt told the DLD media conference in Munich (as reported by Reuters):

Now we know what "real net neutrality" and "openness" are, and that they are the antithesis of free market economics or competition.

As the FreePress-led letter to the FCC made clear on Friday: "Paid prioritization is the antithesis of openness. Any framework that does not prohibit such economic discrimination arrangements is not real net neutrality."

What is "paid prioritization?"

• It is quality of service guarantees, market economics, supply and demand, market-based pricing, investment incentives, competitive differentiation, and reasonable network management.
• Now we know "real network neutrality" and "openness" is more uneconomics from FreePress and the extreme left.

Remember FreePress' last Uneconomics 101 lesson was that "above-cost pricing" was an "unfair business practice."

House Democrats have proposed a resolution to Net Neutrality that strongly signals to the FCC majority to not pursue its considered Title II reclassification of broadband as a 1934 regulated telephone service. The House Democrats' draft is here. The implications of this House draft are broad, important and constructive.

First, this House Democrat draft signals to the FCC Democrat majority loud and clear that House Democrats do not support the radical FreePress-driven proposal to regulate broadband Internet networks as 1934 common carrier telephone networks.

Second, it proves that the FreePress-driven proposal to takeover the Internet and regulate it as a public utility is extreme, way out of the political mainstream, and a non-starter.

Third, this legislation proposes a sensible resolution and workable alternative to this destructive polarizing issue that is serving no one who seeks an open Internet that works, grows and innovates without anti-competitive concerns, but only the revolutionary interests of FreePress and its allies that claim they want net neutrality, but really seek a utopian "information commons revolution."

Skype, one of the high priests of the net neutrality movement, that preaches for Title II monopoly regulation of all the broadband providers it already rides upon for free, has been caught in the act of being blatantly unfaithful to its widely-professed net neutrality principles, by blocking interconnectivity to Fring! 

• Arstechnica and The Hill have both flagged Skype's hypocrisy and infidelity to its supposed net neutrality and openness principles in blocking mobile video calling competitor Fring from access to Skype's dominant network of a ~half-billion interconnected users.  

  Now we know that Skype's proclaimed principled stance for net neutrality and openness was really just a cynical PR and lobbying campaign of crony capitalism, and political cover for an industrial policy where the FCC picks Skype, Google Android, and Amazon Kindle as the "dumb pipe" market winners, and all broadband providers as the "dumb pipe" market losers.

  Skype's "do as I say not as I do" stance is particularly hypocritical because of Skype's dominant size relative to Fring, in that Skype has about a half billion users and is "responsible for 12% of global international calling minutes" per Skype.  

The FCC would be making a long-shot bet-the-farm gamble, if it decided to mandate the broadband public option i.e. deeming broadband to be a common-carrier-regulated service and regulating the Internet essentially for the first time. 

• It would be a classic lose lose gamble because:
  • The FCC is very likely to lose in court -- accomplishing nothing, but damaging the hard-built trust, cooperation, and commitment necessary for public-private partnerships to be able to get broadband to all Americans fastest; and
  • Everyone else would lose from the irreparable damage to private broadband investment, innovation, growth, jobs, and America's broadband ranking in the world. 

I.   Lose in Court:

It is a given that the FCC would be sued; and it is very likely that the Appeals Court and/or the Supreme Court would overturn any FCC unilateral assertion of authority to deem broadband a common carrier service.