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Submitted by Scott Cleland on Wed, 2012-05-09 18:45
Apparently Netflix is angling to become Silicon Valley's king of corporate welfare. We learn from a New York Times economics column advocating for an Internet industrial policy that "Netflix is trying to build a coalition of businesses to make the case for… net neutrality." And that the "online video powerhouse Netflix started a political action committee to complement a budding lobbying effort in support of the idea that all content must be allowed to travel through the Internet on equal terms" -- translation: always at no cost to Netflix.
But Netflix isn't in need of public assistance; it is America's video subscription leader with 23 million subscribers. Netflix has $3.3b in annual revenues, $1.2b in gross profits, $800m in cash, a 34% return on equity, and a market valuation multiple over twice the market's. And Netflix flexed its exceptional pricing power last year in raising its prices 60% without losing many subscribers.
Submitted by Scott Cleland on Tue, 2012-05-08 11:34
The FCC's Google Street View wiretapping investigation proved that Google's public representations it was just a mistake one rogue engineer -- that the FTC and foreign law enforcement relied upon to close their investigations -- were untrue. Going forward, law enforcement must remember the old adage: "fool me once, shame on you; fool me twice, shame on me."
I. Top Ten List of Untrue Google stories
Submitted by Scott Cleland on Thu, 2012-05-03 17:55
Opponents urging the FCC to block the Verizon-Cable secondary market spectrum transaction are pushing the FCC into dangerous institutional territory, effectively goading it to: overreach its statutory authority; ignore FCC precedent, evidence, and facts; and game its own spectrum-screen process. The same FreePress radical fringe -- that goaded the FCC to flout the D.C. Appeals Court decision and pass the Open Internet Order and Data-Roaming Order -- are at it again.
The FreePress radical fringe who care not for the rule of law, are again goading the FCC to trump up some new public interest rationale and statutory theory to allow the FCC to transmogrify its limited public interest authority into unbounded authority that disregards the law, FCC precedent, or the facts. This radical manipulation of the process may be good for forwarding FreePress' anti-business, Internet commons goals, but it is not good for the institution of the FCC, which is a creature of Congress and subject to the rule of law. And nor is it good for the American public.
Submitted by Scott Cleland on Wed, 2012-05-02 11:17
My Daily Caller op-ed: "Obsolete Communications Law Stifles Innovation, Hurts Consumers," puts a spotlight on how America's century-old communications law and regulatory framework is obsolete and strangles America's innovation potential.
Submitted by Scott Cleland on Tue, 2012-05-01 10:28
Google's poor and defiant track record in respecting government agreements and settlements is likely one of the reasons the FTC hired an undefeated former Federal prosecutor and litigator to lead their Google antitrust probe and potential litigation against Google. The EU and the FTC are naturally exceptionally skeptical about negotiating an antitrust settlement with Google, given the substantial evidence that shows Google is consistently less-than-trustworthy in abiding by its agreements with Governments.
Specifically, the evidence shows that Google has not abided by either of its privacy agreements with the FTC concerning Street-View WiSpy or Google-Buzz, nor has Google fully-abided by its criminal Non-Prosecution-Agreement with the DOJ concerning its advertising of illegal prescription drug imports. In addition, Google attempted to broadly game the justice system in negotiating a Google Book Settlement that would have rewarded it with a partial monopoly for its mass copyright infringement.
Submitted by Scott Cleland on Fri, 2012-04-27 15:30
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.
Submitted by Scott Cleland on Wed, 2012-04-25 15:52
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?
Submitted by Scott Cleland on Tue, 2012-04-17 18:52
Reading through The American Antitrust Institute's white paper on Verizon-Cable, it is striking how little analysis is relevant to antitrust/market-competition and how it is basically a thinly-veiled tacit pitch for the DOJ and the FCC to pursue an aggressive industrial policy for the wireless industry.
The white paper presumes that because the DOJ blocked the AT&T/T-Mobile merger to preserve T-Mobile as a disruptive fourth wireless competitor, and because T-Mobile now claims it needs more spectrum, that the government should intervene somehow to effectively redirect the spectrum to T-Mobile and away from Verizon.
The huge flaw in the AAI's analysis is its central presumption, which is contrary to longstanding spectrum auction law, that the government, not market forces, should allocate spectrum. The analysis ignores that the law of the land allocates spectrum via property rights and auctions enabling the spectrum to find the party that most economically values it and has the most economic incentive to put it to productive use. The AAI's analysis appears biased against existing law in assuming that the only or primary reason that the largest wireless providers would want more spectrum would be to anti-competitively keep it from its smaller competitors, and not the obvious and real reason that they want to provide better, faster, more reliable mobile broadband service to more people in more of the country to make more money.
Submitted by Scott Cleland on Tue, 2012-04-17 09:32
Google often acts as if it thinks it is above the law. That may be the most plausible explanation for why Google is under antitrust investigation on five continents, has had 35+ privacy scandals, and has been sued for eight different kinds of infringement/theft from most every content industry.
Submitted by Scott Cleland on Fri, 2012-04-13 17:38
The Washington Post's lead story today, "Landline Rules Frustrate Telecoms," puts a needed spotlight on obsolete communications law that: falsely assumes the telecom marketplace is still a monopoly with no consumer choice; and still mandates telecom companies subsidize below-cost, copper-line telephone service to households as if it were still a government-sanctioned monopoly.
A bit of history is warranted here. This century-old political arrangement -- the 1913 Kingsbury Commitment between the Federal Government and AT&T -- effectively established a government-sanctioned monopoly in return for universal telephone service to all Americans and utility rate of return regulation. In 1996, Congress reformed Federal communications policy by ending monopoly and promoting competition. Today, despite copper telephone networks losing half of their customer base to cable, wireless, VoIP, broadband and other Internet competitors (and losing most of their most profitable landline customers) many legacy telecom legal requirements, like subsidized below-cost telephone service, live on despite being obsolete. This means that in today's fiercely competitive voice service marketplace, mandating that only one provider must provide subsidized below-cost, copper-line service to potentially millions of households, is a classic un-funded mandate and a hidden, unfair, investment-distorting business tax on only one competitor.