About Scott Cleland
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You are hereCorporate WelfareSpectrum: To Auction or Not to Auction?Submitted by Scott Cleland on Tue, 2012-02-07 10:22The FCC's recent call for unbounded spectrum auction authority spotlights an important debate over whether some of this scarce and extremely valuable wireless spectrum should be auctioned or not.
There are huge fiscal problems with the FCC's position, given our nation's severe fiscal situation: a trillion dollar Federal budget deficit and a ballooning multi-trillion dollar public debt. First, the real world effect of the FCC's gambit here is to try and get revenue-raising legislation to not raise many billions of dollars.
FCC Seeks Unbounded Spectrum Auction AuthoritySubmitted by Scott Cleland on Tue, 2012-01-17 10:23At CES, the FCC signaled that it opposed any effort by Congress to give the FCC policy direction or to establish any checks and balances on the FCC in authorizing incentive auctions of prime TV broadcast spectrum. See my Forbes Tech Capitalist post "FCC Seeks Unbounded Spectrum Auction Authority" to see why the the FCC's lack of regulatory humility here is so stunning. Netflix' UneconomicsSubmitted by Scott Cleland on Tue, 2011-09-06 11:58Netflix' continues to exhibit serious difficulties grasping basic economics, competition and value. First, Netflix is lowering its value to customers.
Second, Netflix is shifting its costs to its customers.
Third, Netflix is chasing away the premium content its subscribers demand. Netflix' Glass House Temper Tantrum over Broadband Usage FeesSubmitted by Scott Cleland on Tue, 2011-07-26 17:44Netflix continues to throw stones at the common economic practice of usage-based pricing, to which broadband carriers are naturally migrating, all while Netflix stands inside a glass house filled with mis-managed usage pricing practices. Netflix as Stone Thrower: In a concerted campaign for net neutrality regulation that would ban broadband usage caps or pricing, Netflix has generated a:
Netflix as Glass House: FCC Out-Europes Europe on Net Neutrality -- Why?Submitted by Scott Cleland on Tue, 2011-03-01 14:52"The Net Neutrality Debate in Europe is Over" per an excellent commentary by Ben Rooney in WSJ TechEurope.
For those who follow history, it is truly ironic, surprising, and just plain bizarre that Europe is more pro-competition on Internet policy than the U.S. FCC. How can this be? To understand this wierdness, look at this remarkable development through the lens of industrial policy. I posit the reason for this European policy outcome is the fact that Europe does not have a Silicon Valley lobby -- with an aggressive corporate welfare agenda seeking government special treatment, regulation of their competitors, and implicit bandwidth subsidies -- like the U.S. does. The stark and ironic contrast between the FCC's European-style, interventionist, regulatory approach, and Europe's more American, non-interventionist, competitive approach can only be explained by the presence of the potent lobbying force of U.S. industrial policy national champions (Silicon Valley -- Google, eBay, Amazon, IAC) in the U.S. -- and the absence of European national champions seeking net neutrality in Europe. NetFlix' Open Internet Entitlement HubrisSubmitted by Scott Cleland on Tue, 2011-02-01 17:07It appears as if Netflix' rocket stock and nosebleed market valuation has infected Netflix' CEO, Reed Hastings, with a bad bout of dot.com hubris fever complete with hallucinations that Netflix is somehow a needy online video provider entitled to new massive subsidies under the FCC's Open Internet order.
Alarm bells should be going off among Netflix' sophisticated shareholders. Level 3 Seeks Title II Internet Reg Conditions on Comcast-NBCUSubmitted by Scott Cleland on Sun, 2010-12-19 23:47In requesting the FCC and DOJ condition the Comcast-NBCU merger with Title II telephone regulation of Comcast's Internet backbone, Level 3 seeks to achieve through the back door of the FCC what they could not achieve through the front door. Paid Prioritization: The Demonization of Market EconomicsSubmitted by Scott Cleland on Mon, 2010-12-13 12:11Now we know what "real net neutrality" and "openness" are, and that they are the antithesis of free market economics or competition. As the FreePress-led letter to the FCC made clear on Friday: "Paid prioritization is the antithesis of openness. Any framework that does not prohibit such economic discrimination arrangements is not real net neutrality." What is "paid prioritization?"
Remember FreePress' last Uneconomics 101 lesson was that "above-cost pricing" was an "unfair business practice." Sinking Level 3 Seeking FCC Internet Regulation BailoutSubmitted by Scott Cleland on Wed, 2010-12-08 14:31The extent to which Level 3's business is underwater is the untold story behind Level 3's regulatory "hail Mary" claim that its Internet peering dispute with Comcast is somehow a net neutrality violation.
Why is Level 3 seeking a de facto Internet regulation bailout from the FCC? First, Level 3 is a financially-sinking business with no legitimate growth prospects. 10 Questions for Google's Tax DodgeSubmitted by Scott Cleland on Thu, 2010-10-21 17:38Top Ten: We learned today that Google has the lowest foreign tax rate of the top five U.S. tech companies, an eyebrow-raising 2.4%, and that Google "cut its taxes by $3.1b in the last three years using a technique that moves most of its foreign profits through Ireland and the Netherlands to Bermuda," per an outstanding investigative expose by Jesse Drucker of Bloomberg. This exceptional tax dodging feat, while reportedly technically legal, nonetheless raises some important questions that no one has yet asked Google.
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