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Competition 101 for Neutr-elitists straw man of perfect competition

My previous blog on how the "FCC auction seeds more competition," apparently rankled our opponents over at Public Knowledge who see a dark cloud on every competitive horizon. Harold Feld of Public Knowledge derisively spat all over the auction results in his blog because the new DBS consortium was outbid, it strengthened the existing four big telco wireless players and it let cable bid for spectrum. 

This clash of views is instructive because it highlights the huge philosophical divide between netcompetition forces and net neutrality proponents. Netcompetition-ers believe market forces/competition produce superior consumer and economic benefit than regulation does.

The Net neutrality camp which Mr. Feld so ably represents at the liberal activist group Public Knowledge, apparently subscribes to the "Hundt-ian" school of competition which believes competition is much too important to leave to supply and demand. (Aptly named after former FCC Chariman Reed Hundt, of fiber and CLEC bubble/crash fame, and author of UNE-P and 17% cable rate rollbacks fame)

The reason the two sides talk past each other is that one side genuinely believes de-regulation and competition is better and can defend the position on the merits, and the other does not believe that the market can work better than government and that market forces if left ot its own devices will not yield the end results they want. To be more blunt, they don't like policies that do not re-distribute wealth in the manner and speed in which they believe it "should".

Back to "Communications Competition 101" for the liberal activists promoting net neutrality.

Neutr-elitists have defined competition as an easy "straw man" that they can easily defeat. Their defintion of competition slams anything that falls short of the ideal commodity price competition where there are many many competitors that are near perfect substitutes and only fiercely compete on price. 

Hello? That may work for mature commodity goods like soybeans or tin, but it is is not how competition works in capital intensive, young, or innovative, complex, or formerly regulated markets! Its apples and oranges.

Mr. Feld laments that competition failed in the auction because DBS was outbid for the Spectrum. Duh! An auction is competition for scarce goods determined by who pays the American consumer the most for the right to profit from that spectrum! Is Public Knowledge implying what is really best for consumers is when the government redistributes wealth by giving smaller entities licenses or giving discounts? Oh I forgot the ends justify the means to re-distributionists. 

Why isn't Mr. Feld and the Savetheinternet pushing the dotcom billiionaires to bid on spectrum? Where were Google, Microsoft, Yahoo, eBay individually or collectively in the FCC auction? They can afford it by any measure. They have more market cap than the real bidders and have no debt compared to the other bidders. Was there a barrier to entry other than expecting to get for free what everybody else pays for? Look competition sorts out the real competitors from the wannabes. 

Mr. Feld rails against the fact that the four telcos strenghened their spectrum holdings. You bet they did. There is something out there called broadband and customers like lots of bandwidth and speed. And this auction allowed these companies to better meet voracious consumer demand for more spectrum. How is that anti-competitive?  Only if you define Competition by how many competitors there are and not the way that matters to consumers which is are prices going down and choices expanding? 

Lastly, Mr. Feld speaks for liberal activists everywhere in attacking the cable boogeyman and saying the just thing would have been to ban cable from the auction! Excuse me? These folks who have appropriated the word "freedom" in a lame attempt to appeal to the American mainstream on net neutrality think freedom means banning able bidders from a spectrum auction? that's their vision of a free and open Internet?

in closing, why I blog so passionately on the topic of Net Neutrality is that this is the grand philosophical debate of our time in the techcom world. Liberal activists want a world where competition is "managed" by the government and the government picks winners and losers, (losers are the big and winners are the small in re-distribution philopophy) and pick technologies. 

Well its that liberal mentality during the Great Society that buried the cell phone which was invented in 1960 from getting out to the marketplace until the mid 1980's. The Internet did not become the dynamic competitive phenomenon it is today until it was privatized. 

I wish the liberal activists promoting net neutrality would be upfront with everyone in saying their definition of "free" means no cost, not liberty!