Wireless Spectrum

Please see my latest Daily Caller op-ed: "The FCC Showcases its Growing Obsolescence" here. This piece is part 9 of my Obsolete Communications Law research series.

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Obsolete Communications Law Op-ed Series:

Part 1: "Obsolete communications law stifles innovation, harms consumers"

Part 2: "The FCC's Public Interest Test Problem"

Pay attention when FreePress is quiet about something it was ear-splitting loud about before. Without fanfare, FreePress apparently has mothballed its old SaveTheInternet.com agitprop campaign apparatus by redirecting www.SaveTheInternet.com to a refreshed FreePress.net site that reboots under a variety of "Internet freedom" agitprop sub-campaigns. Mandated net neutrality government regulation has now transmogrified into an "Internet freedom."

And FreePress/Public Knowledge have cloned a SaveTheInternet twin, the comic-book-inspired, "Internet Defense League," which apparently will be the new front group responsible for much of the online community organizing and stunt-staging that FreePress/SaveTheInternet became infamous for. Think of the FreePress 1.0 email list of ~500,000 activists pinging around in a social media 2.0 echo chamber, in order to defend the Internet from capitalism, profit and private property.

FreePress' "Internet freedom" reboot apparently is in the process of getting the people and organizations which signed the original oath of allegiance to SaveTheInternet, to sign the new FreePress 2.0's Declaration of Internet freedom.

The Verizon-Cable spectrum sale remains on path for DOJ-FCC approval because it is fundamentally pro-competitive, in the public interest, creates the foundation for a fifth national wireless competitor, puts fallow spectrum to work fastest, and its approval will result in secondary market spectrum sales to other competitors that the DOJ/FCC want to get spectrum.

The recent leaks to the media expressing additional DOJ concerns, and the coordinated letters from the Hill, are apparently orchestrated by the DOJ to increase the DOJ's perceived negotiating leverage to try and "nibble" some final concessions and conditions from Verizon and the Cable spectrum sellers before the DOJ finally clears the spectrum sale for closing.

Please read my latest Daily Caller Op-ed: "Obsolete Analysis Will Doom DOJ's Antitrust Probe of Cable" here.

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Obsolete Communications Law Op-ed Series:

Part 1: Obsolete communications law stifles innovation, harms consumers

Part 2: "The FCC's Public Interest Test Problem"

Part 3: "FCC Special Access: Communications Obsolete-ism vs. Modernism"

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Broadband Usage Pricing Research Series:

Part 7: "Broadband Pricing is Naturally Evolving to Usage Tiers"

Part 6: "Leaf Vision & Broadband Usage Caps"

Part 5: "Consumer Group's Advocacy Hypocrisy"

FOR IMMEDIATE RELEASE May 24, 2012

Contact: Scott Cleland 703-217-2407

Verizon-Cable's Market-based Spectrum Transaction Promotes Competition

Promoting secondary market for spectrum & new forms of competition is in the public interest

WASHINGTON D.C. – In response to Senate Antitrust Subcommittee Chairman Kohl's letter to the DOJ and the FCC on the Verizon-Cable transaction, the following quotes may be attributed to Scott Cleland, Chairman of NetCompetition.org:

The EU's latest round of mobile price regulation provides a golden opportunity to show how market competition produces much better results for consumers than government price regulation. Ironically, the European Parliament voted this week to lower mobile roaming charges by mid-2014 to levels that will still be much higher than America's competitive wireless market prices are today.

Per New York Times reports, the EU mandated price for making a roaming mobile voice call will be reset from 35 cents a minute today to 19 cents a minute by mid-2014, and the price for receiving a roaming mobile voice call will be reset from 11 cents a minute today to 5 cents by mid-2014. Putting this in perspective, Recon Analytics' research shows that Americans pay 4.9 cents a minute vs. 16.7 cents a minute for Europeans -- ~70% less; and because of these dramatically lower American wireless prices, Americans consumers use more than twice as much wireless as Europeans, 875 minutes of use per month vs. 418 minutes for Europeans. Simply, the EU's ~50% mandated price reductions will still have European consumers paying much more for mobile usage even if one incorrectly were to assume that competition won't further lower the market price for American consumers like it has every year.

Near hysterical opponents of broadband data usage caps need to breathe slowly, drop their magnifying glass, look up and take in the big world all around them. They are not just missing the forest for the trees, they are missing the leaves, stems, branches, trees, forest and sky, because they can't take their magnifying glass off of the leaf with which they are myopically obsessed.

Broadband data usage caps are a very small, normal, and essential part of a healthy and economically-sustainable Internet ecosystem. Pricing is the central mechanism for any marketplace to balance supply and demand and to create economic incentives and disincentives for behavior that can drive costs. There is nothing wrong with pricing caps, tiers, and other pricing mechanisms that are used to manage networks, avoid network congestion, achieve a return on investment, manage a business model, differentiate a business, and/or earn a profit.

Consumer groups by definition are supposed to be protecting consumers' interests -- not be pushing a special interest political agenda under the guise of the "public interest." Let's spotlight a recent and blatant hypocrisy whereby consumer groups near-completely ignored an instance of obvious widespread consumer harm (the FCC's proposed fine of Google for obstructing its Street View wiretapping investigation), while in another contemporaneous issue, consumer groups gang-pummeled a non-issue to push a political Internet commons agenda (strongly objecting to Comcast's new market offering where XBox usage does not apply to a user's 250 Gig monthly data cap.)

Google Street View Wiretapping: Why is Google obstructing a Federal wiretapping investigation affecting the privacy of literally tens of millions of American households' -- not a consumer protection issue? How come consumer groups routinely and loudly call for FCC investigations of broadband companies' legal marketplace actions, but are silent on the obvious obstruction of a Federal investigation into Google allegedly being involved in potentially the largest wiretapping and mass invasion of citizens' privacy by a corporation in U.S. history? How is it in consumers' interest for the government to not be able to determine if Google actually violated Federal law or not?

T-Mobile demanded last week that the FCC deny the Verizon-Cable spectrum license transfer, apparently so Deutsche Telecom/T-Mobile could get it at a deep FCC managed-market discount.

The FCC is not Deutsche Telecom/T-Mobile's personal do-over button that they can push and magically reset the marketplace to an earlier time more to their liking. All other players have made market-driven decisions and have to live with them, and so should Deutsche Telecom/T-Mobile. That's the essence of free-market competition, companies move forward or backward based on their own market-driven choices. It's not competition or a market, if those who don't like the outcome of their own market decisions, run to government for a do over and quasi-international bail-out.

Let's review how T-Mobile got to this point.

For years T-Mobile has been a seller of its spectrum; because its parent Deutsche Telecom has long wanted to exit the U.S. market because it requires more capital investment than they are willing or financially able to expend.

The March 21^st Senate Judiciary Subcommittee hearing reviewing the Verizon-cable agreements provides Congress with an opportunity to learn:

• How the metamorphosis of communications competition is increasing competition;
• How the Government has created artificial and temporary spectrum scarcity in failing to free up more spectrum for broadband use in a timely fashion; and
• How unfair, arbitrary and capricious the FCC review process has become in reviewing market transactions.

Given that the DOJ has such weak grounds and facts under antitrust law to challenge the Verizon-cable commercial agreements, and given that the spectrum transfer is in the public interest in multiple dimensions, opponents appear to be pushing the FCC to do whatever necessary to try and block Verizon-cable under the FCC's make-it-up-as-they-go-along public interest standard.