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Frontline wants competition through "zoning regulations?"

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?

New evidence of why Google so dominates search

The New York Times article today: "South Koreans Connect Through Search Engine" provides a huge window into what the real source of a search engine's market dominance is. (The article indicates that in South Korea, Naver.com is the leading search engine with 77% share, followed by South Korean company Daum.net with 10.8%, and Yahoo with 4.4%. Google's market share is 1.7% in South Korea.)

  • The South Korean example is a particularly helpful set of facts and insights to the FTC and Congress in their journey to understand Google's increasing search dominance and the potential anti-competitive effects of the Google-DoubleClick merger.

Specifically, what makes Google's 1.7% South Korean search market share different from its 90% share in Germany, Spain, 82% share in France, 75% share in the UK, and its 65% share in the US -- given that Google has been competing in the South Korean market since 2000?

Frontline's proposal is so disingenuous: Let me count the ways

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.

My response to SaveTheInternet views on broadband

A core purpose of NetCompetition.org is to promote a debate of Net neutrality regulation on the merits. SaveTheInternet.com had a recent blog post "Painting over broadband failures with pretty pictures" that prompted me to comment on their blog -- which I have included below:

"If SaveTheInternet followers are truly "open" to diverse points of view that may be different from theirs, I recommend that you consider the mounting evidence that the US is in fact not falling behind but is actually a unique success in promoting facilities-based broadband competition in the world. Please see this link for the four best alternative views on this question:
http://www.precursorblog.com/node/451 .

The mounting evidence that the US is NOT falling behind on Broadband

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:

No due diligence for Frontline Wireless? Special favors for special interests?

Congrats to Jeff Eisenach of Criterion Economics for his outstanding and incisive analysis "Due Diligence: Risk Factors in the Frontline Proposal."

  • Jeff Eisenach wonderfully brings clear thinking and common sense to a topic that sorely needs it.

The analysis exposes the Google-supported Frontline Wireless proposal for what it is... a "trust us" investment of effectively billions of dollars in forgone receipts due to the American taxpayer in a free market auction.

"Earmarked Airwaves" -- a 700 MHz auction "UNE-P" deja vu?

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.  

Fabricating a broadband problem to justify more regulation/taxation/spending

Net neutrality proponents continue to fabricate problems to manipulate public policy to promote government intervention and regulation over free markets.

Fortunately net neutrality proponents have failed miserably in their efforts to date. 

A new "online workers union" to promote net neutrality?

Thank you Tech Daily for flagging a silly blog by MyDD calling for an organizing an "online workers union... to look out for the political interests of online workers. These interests include net neutrality, intellectual property law like DMCA..."

You can see me shaking my head in disbelief now... an online workers union for net neutrality...

Let me highlight just a few of the silly aspects of this idea.

First, organizing bloggers into a union to promote net neutrality?

  • Duh! It already exists! 
  • The "online workers union" is called Moveon.org and it already has 3 million members, all they have to do is change from political donations and require mandatory union dues.  
  • The MoveOn/FreePress folks already operate as de facto union bosses of the net neutrality movement.
  • And by the way doesn't MyDD know that the Consumers "Union" already supports net neutrality regulation?

Second, social media technology already allows onliners to organize around what ever idea they want whenever they want. Its a free country and a free and open Internet. Why not create: 

  • UnionBosster?
  • MyUnionSpace?
  • UnionFace?
  • Goonion?
  • LaeBayr? 
  • AmUnionZon?
  • AskYourUnionRep.com?
  • Wikidarity? 
  • eUnionDues?
  • SaveUsFromIndividualism?
  • OrganizeAgainstYourself?
  • Socialized Internet?
    • Surely MyDD could "move on" one of these many "online workers union" ideas.

Third, MyDD's idea for organizing eBay sellers is sort of bizarre.

Google's perverse version of the "Golden Rule"

Google's naiveté and cluelessness on antitrust matters continues to amaze me. While Google has ramped up its Washington lobbying presence a ton of late, it is amusing that the company-at-large still does not have a lick of political savvy or common sense.

It is almost as if Google operates having an out-of-body experience, where their leaders think they can float sanctimoniously above the playing field and see everything perfectly, but no one can see them or what they are doing.

What do I mean? Let me put Google's antitrust and political behavior into context.

  • Google is ferociously going after Microsoft on antitrust matters. After they recently won a huge concession from Microsoft to make Google's desktop search work better and faster -- a concession not required by the DOJ-supervised committee that oversees Microsoft's competitive behavior -- Google is now asking for Microsoft's antitrust decree not to expire.
  • This is classic, hardball, take-no-prisoners behavior that sometimes yields short-term results, but always invites long-term disaster.
  • In effect, Google is taunting the antitrust-caged Microsoft tiger, imagining that they are untouchable, invincible and legally superior.

It is amazing to me that Google appears to be unaware and clueless that they have voluntarily walked into their own “antitrust cage" of the FTC review process for approving two of their deals, DoubleClick and FeedBurner.

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