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The Metamorphosis of Communications Competition -- A New Framework

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.

Implications of DC Circuit Hearing Net Neutrality Appeal

Since the D.C. Circuit Court of Appeals was selected to hear appeals of the FCC's Open Internet Order -- it is now even more likely that the FCC's net neutrality regulations will be overturned in court as unlawful and/or unconstitutional.

 

  • Regardless of which Appeals Court heard this case, Verizon was highly likely to win in its appeal against the FCC rules on the merits.
  • Now Verizon's chances increase further given that the most knowledgeable, expert, and experienced Circuit Court of Appeals is hearing this case.
    • (See analysis here for why the FCC is highly likely to lose this case.)

 

The D.C. Circuit is the Appeals Court that traditionally hears cases involving independent regulatory agencies like the FCC, so the D.C. Circuit Judges are very familiar with both the limits of the FCC's statutory authority and the FCC's proven penchant for trying to overreach their statutory authority.

In a nutshell, the FCC's legal case stands on two very slippery assumptions.

 

Why Verizon Wins Appeal of FCC's Net Regs

See my Forbes Tech Capitalist post here "Why Verizon Wins Appeal of FCC's Net Regs."

  • It analyzes why the FCC's net neutrality regulations will offend the Court of Appeals and why they are highly likely to be overturned.
  • This is one of the most poorly defended FCC decisions I have reviewed in my twenty years following the FCC.

Why FCC Net Neutrality Regs Are So Vulnerable

See my Forbes Tech Capitalist post on net neutrality here, entitled: Why FCC Net Neutrality Regs Are so Vulnerable.

Opposing "The Verge" of Socialism -- My latest Forbes Tech Capitalist post

Please see my Forbes Tech Capitalist blog "Opposing "The Verge" of Socialism" here, which rebuts Joshua Topolsky's Washington Post column: "Want better wireless service in America? Socialize it."

AT&T/T-Mobile: DOJ's Achilles Heel is Ignoring Competition Facts

The broader evidence of competitive price pressure in the U.S. mobile marketplace that the DOJ has ignored and excluded in its gerrymandered market definition -- is the DOJ case's Achilles Heel.

 

  • Remember, the DOJ has the burden of proof here to prove the deal will "substantially lessen competition," based on the preponderance of the evidence.
  • The DOJ's suspect market definition puts the DOJ in the unenviable position of convincing the judge to ignore vast swaths of evidence of competitive price pressures, growing choices   facts and evidence that average consumers are well aware of that seriously undercut the DOJ's contrived market definition and conclusion.

 

While layman may not understand that the DOJ's HHI concentration indices are not determinative, this experienced Judge certainly does.

 

Top Ten Flaws in DOJ's Case Against AT&T-T-Mobile

The DOJ lawsuit against the AT&T/TMobile merger has many serious flaws that will make it difficult for the DOJ to meet its burden of proof in court that this merger is anti-competitive.

 

  • Court cases are precedent, fact, and merit driven, and DOJ's case is much weaker in those critical dimensions than most appreciate or reports indicate.
  • (See DOJ's release here and the DOJ's complaint here.)

Importantly, if the DOJ ultimately cannot prove this merger is anti-competitive in a court of law, that official legal decision would make it legally difficult for the FCC to block the merger on competition grounds under the FCC's public interest standard, especially given that the merger would bring more broadband speed more quickly to more Americans, and create jobs, which the FCC's claims are their top public interest priorities.

  • Simply, the precedents, facts, and merits are friends of the proposed AT&T-T-Mobile deal.

I.   Summary of Top Ten Flaws in DOJ's Case

 

FreePress Cries Wolf -- Yet Again

FreePress with its "all complaints all the time" approach to advocacy has been caught once again "crying wolf" when there was no real problem or threat.

A new FCC study that shows ISPs are effectively delivering on the broadband speeds they advertise, exposes FreePress for crying wolf -- yet again.

  • FreePress has to acknowledge Verizon's FIOs far exceeds advertised speeds, Comcast and Charter exceed advertised speeds, and other ISPs are more than close enough to advertised speeds to show that there is not a problem here for the FCC to be concerned about.

FreePress also continues to cry wolf about its spurious tethering" complaint against Verizon because users are prevented from unauthorized tethering of additional devices trying to bypass users' terms of service agreement.

AT&T/T-Mobile: Three Key Realities Why Merger Gets Approved

In the end, the U.S. Government is highly-likely to approve the AT&T/T-Mobile merger, despite the significant opposition, because of three over-riding realities: 1) market/financial realities, 2)DOJ legal/precedent realities, and 3) FCC public-interest realities.

 

I.    Market Reality:

T-Mobile's leadership and owners have decided that they are unable and unwilling to invest what is necessary in order to compete going forward in the American 4G wireless market, and given that fundamental premise, the AT&T/T-Mobile merger is the optimal market outcome for T-Mobile's customers and for competition.

 

  • T-Mobile shopped itself for a good while in order to fully test its market options and ultimately chose to merge with AT&T as the best outcome for all concerned from its perspective.

 

So the key baseline fact grounding the DOJ/FCC's decision processes here, is that T-Mobile's leaders/funders are effectively exiting this business one way or another long term via merger, sale or benign neglect.

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Q&A One Pager Debunking Net Neutrality Myths