Open Internet

Just when the pending 600 MHz “incentive” FCC auction looks like it could not get more unworkably complex than a reverse, “incentive,” auction with looming FCC bidder limits, T-Mobile proposes to add a “dynamic” twist where the rules would then change as the auction goes along depending on how much bidders bid relative to a government-estimate that may or may not have any basis in economic reality. 

To use a diving metaphor, this is like a synchronized diving event with unknown dozens of divers that first must do a “reverse” back flip to “incentivize” another set of divers right behind them to then do a front flip, but only if the particular diver before them does a reverse back flip that individually gets a good enough score to make a follow-on dive possible, and then if that happens for some of the diver teams, any follow-on dives would then be scored “dynamically” depending on a random target score of the previous dive, which would then determine if said diver can dive again or not.

That’s essentially the latest T-Mobile “dynamic spectrum rules” proposal for the 600 MHz auction that T-Mobile just proposed and released to reporters.

It can and does get worse.

The economist behind the T-Mobile proposal was Deputy FCC Economist when the FCC was nano-implementing the 1996 Telecom Act and came up with TELRIC pricing and UNE-P. UNE-P was an elaborate FCC ruse to get around the plain language of the Telecom Act and get a 50-60% resale discount for all telecom services (a platform) for CLECs, rather than the ~20% platform resale discount methodology in law.

They were so wrong. To justify FCC market intervention, U.S. proponents of EU-style, heavy-handed broadband regulation trumpeted the narrative that the U.S. was falling behind the world in broadband.

The pro-regulation chorus of Free Press, Save the Internet, Public Knowledge, Susan Crawford, the Harvard Berkman Center, et al, sung from the same made-up song sheet that American business was failing and Government needed to take control of broadband networks to restore American leadership and prevent private enterprise from discriminating and censoring Americans free speech.

Now we know how tall a tale these pro-regulation pressure groups were willing to spin to advance their interventionist net neutrality agenda.

Facts are pesky things and the facts show that the U.S. is strongly leading the EU in the broadband race. It is so obvious even top EU officials admit the EU “needs to catch up.”

Let’s review the latest facts.

Please see my latest Daily Caller op-ed: "The New U.S. Spectrum Policy Has Big Problems” -- here.

• It critiques the new Presidential Memorandum: “Expanding America’s Leadership in Wireless Innovation.”
• It is also Part 9 of my Government Spectrum Waste, Fraud & Abuse Research Series.

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Google is the only company with a mission to organize the world’s public and private information, and it is also unique in having developed more ways, to monitor more people’s behavior, more intimately than any entity ever.

Please see this one page graphic summary to get a big picture view of the almost unimaginable scale and scope of the intimate private information that Google routinely records and analyzes. 

Since all other companies have much more narrow and focused businesses and missions than Google’s unbounded ambitions, they represent a fraction or slice of the whole public and private data pie that Google collects, stores, and analyzes.

Other than Google, only an Orwellian “Big Brother” state would aspire to collect and store indefinitely all private, intimate information on everyone online like Google is doing.

We know information is power.

The problem with Google becoming Big Brother Inc., is that if a state were to combine its state powers with Google’s unique information monopoly, unaccountability, and surveillance powers, it creates huge natural temptations for corruption and abuse in the absence of meaningful competition, strong checks and balances, and real public accountability.

Bubbles happen because people ignore economics and assume away reality in their excitement over a new idea. “Virtual currencies” could be the latest tech “economics of abundance” bubble in the making. Fans of abundance economics imagine that the free and open Internet’s near zero marginal cost of borderless transactions will ultimately slay traditional economics of scarcity.

Cyber-utopians imagine that currency, or money, is a simple function, like any other product or service that they have made openly available to everyone in the world at virtually no cost on the Internet. They imagine the only thing that matters with the business of money is how money is transmitted.

They assume creating money is just a coding and crowd-sourcing task. How hard could that be? What possibly could go wrong? It’s only money.

The D.C. Circuit Court of Appeals 3-0 decision to overturn the FCC in Comcast v. FCC/Tennis Channel spells more trouble for the ultimate legality of the FCC’s Open Internet Order. That decision spotlights that three additional D.C. Circuit Appeals Court’s judges do not agree with the FCC’s reading of the law and the facts concerning lawful network discrimination.

On the margin, this new decision should make Verizon more confident and the FCC less confident in the outcome of Verizon v. FCC.

Overall, I believe Verizon remains more likely than not to prevail in its challenge of the FCC net neutrality regulations in the FCC’s Open Internet Order, because Verizon only needs to prevail with one of its many strong arguments while the FCC must win on all of them.

How is this latest D.C. Circuit decision relevant to the FCC Open Internet order case?

Every system has a most vulnerable point, an Achilles heel. The overwhelming evidence below indicates that Google is America’s cybersecurity Achilles heel.

While America faces a plethora of serious cybersecurity vulnerabilities, Google’s unique scale, scope, tracking, and centralization puts Google alone at the pinnacle of America’s cybersecurity vulnerabilities, in a class all by itself.

Simply, hackers understand Google is by far the world’s single most-comprehensive source of intimate surveillance information on people and their behaviors, while also being the major entity that is least-committed culturally to protecting people’s security, privacy, and property.

What’s the impact on the Verizon appeal of the Open Internet Order of the Supreme Court’s strong reaffirmation of its Chevron deference standard, in Arlington v. FCC?

I believe Verizon is still more likely than not to prevail on the merits of its appeal, because the FCC’s Open Internet Order is so unambiguously far outside the bounds of the FCC’s statutory authority, that Chevron deference is unlikely to apply.

If the SCOTUS had not strongly reaffirmed Chevron deference, the FCC would have faced an even steeper fight in the Open Internet Order. Despite the SCOTUS decision not being particularly helpful in the specific FCC Open Internet case, it undeniably was very FCC-friendly overall. That’s because it affords the FCC more latitude to exploit the many legally-ambiguous seams of communications law to advance its various regulatory agendas in highly-targeted ways.

Please see my latest Daily Caller op-ed: "America's private video market success" here.

• It debunks Free Press' diatribe against cable to try and promote net neutrality regulation and a ban on usage-based broadband pricing.
• It is Part 16 of my broadband Internet pricing freedom research series.  

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Broadband Internet Pricing Freedom Research Series

Part 1:    Netflix' Glass House Temper Tantrum Over Broadband Usage Fees

Please see my latest Daily Caller Op-ed "Wireless Plan Innovation Benefits Consumers & Competition -- here.

• It debunks net neutrality criticism of a reported potential ESPN-wireless pricing experiment.
• It is also Part 15 of my Broadband Internet Pricing Freedom research series.

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Broadband Internet Pricing Freedom Research Series

Part 1:    Netflix' Glass House Temper Tantrum Over Broadband Usage Fees