Congress tells FCC reclassification is above their paygrade

Seventy-four House Democrats and thirty-seven Senate Republicans wrote letters (here, here) to the FCC today that essentially told the FCC that their announced plans to deem broadband a common carrier service are over-reaching and out-of-bounds.

  • In Washington-speak, the letters communicated that the FCC is trying to decide an issue that is "above their paygrade" to decide. 

In turn, these letters appear to have prompted the Chairmen of the FCC's House and Senate authorizing committees and subcommittees to announce today that they will hold meetings with key stakeholders to discuss updating the Communications Act legislatively -- another strong message to the FCC that Congress makes communications policy, not unelected commissioners at the FCC.

The clear political message to the FCC here is that they have wrongly put the cart before the horse, and that they must seek a "solid bi-partisan political foundation" for U.S. broadband policy... before they can achieve their desired "solid legal foundation" for the FCC. 

FTC cedes at least half of mobile ad market to Google

In not disapproving the Google-AdMob deal as the FTC staff recommended, the FTC effectively is ceding at least most of the mobile ad market to a Google monopoly.

  • In a clearly tortured, conflicted and political statement, the FTC justified their approval despite the evidence and their merger guidelines by saying: "The Commission has reason to believe that Apple will quickly become a strong mobile advertising network competitor." 

I.  The FTC's political judgment to bet on Apple rapidly becoming a substantial competitor to Google in a years time (and to disregard the evidence and the FTC's new horizontal merger guidelines) -- has the real world effect of ceding at least most of the mobile ad market to Google. Why?  

First, by the FTC's own admission, Apple was not an advertising competitor at all before it bought #3 mobile ad provider Quattro. Thus, implicit in this FTC decision is a very big, going-forward assumption that the new synergies of Apple-Quattro in the next year will more than offset the loss to competition of AdMob, the clear #1 mobile ad competitor and first-mover with about half of the market.

NetCompetition.org Press Release on FCC wireless report which advances FCC de-competition policy

FOR IMMEDIATE RELEASE       

May 20, 2010                                                                                         

Contact:  Scott Cleland

703-217-2407

 

Scott Cleland, Chairman NetCompetition.org, on FCC Wireless Report:

Goobris Alert on Google-Admob

Goobris: (noun) Google's frequent total lack of self awareness when it says something publicly. 

In the Reuters article "Google to fight Government if AdMob deal blocked," Google CEO Eric Schmidt exhibited characteristic goobris in criticizing the FTC's review of the Google-AdMob acquisition.

First, Mr. Schmidt amazingly complains that the FTC's extended review of the acquisition left AdMob at a "significant disadvantage" competitively vs. Apple.

Google's Wanton WarDriving Scandal: Fallout & Cover-up

Google's wanton "wardriving," i.e. detecting, accessing, and recording residential WiFi networks in 30 countries for over three years, was not simply a "mistake," "inadvertent," or an "accident" as the Google's PR machine has spun it. The evidence to the contrary is overwhelming to anyone who bothers to examine it closely. 

  • Google's wanton wardriving was either: gross incompetence/negligence or wrongdoing
    • Government investigators must determine for themselves via subpoena, whether or not anyone at Google, in a supervisory or management position, knew that this private "payload" data was being collected, and whether or not this private data had been accessed, copied, analyzed, or used by Google in any way.

The case for why Google's wanton wardriving is more than just a "mistake."        

I.  Identifying the questionable practice: "Wardriving"

FCC's Dysfunctional Retransmission Rules Harm Consumers

The FCC's retransmission rules now perversely cause consumers to suffer unnecessary collateral damage in retransmission negotiations -- the exact opposite outcome the FCC wants -- in large part because the FCC's retransmission rules have not kept pace with dramatic competitive and technology changes over the last two decades.  

  • The FCC should, and easily can, protect consumers from becoming unnecessary collateral damage in retransmission negotiations by simply updating their nearly twenty-year-old FCC regulations with petitioned common sense modifications that ensure consumers never find themselves unnecessarily in the "bulls-eye" of the FCC's out-dated retransmission rules again.

To better understand how rules that possibly made sense in 1992, could produce predictably perverse and dysfunctional consumer outcomes today, think of the retransmission rules, like a regulatory "gun" that was originally and permanently pointed directly at a 1992 cable monopoly and no one else. 

Exposing Google's Systemic Privacy Vulnerabilities -- Part XXII of Publicacy vs Privacy series

Google's latest privacide admission -- that all of Google's roving StreetView vehicles around the world have been recording some of people's WiFi traffic/web behavior since 2007 -- should prompt privacy officials and the media to ask the simple question: why does Google serially keep having privacy scandals?

Simply Google will continue to have privacy scandals because Google has deep systemic privacy flaws and vulnerabilities -- by design.

Why FCC faces such skepticism on Title II assurances

There are many valid reasons why industry is highly skeptical of the FCC's many rhetorical assurances that nothing bad will happen from the FCC's planned regulation of broadband for the first time as a Title II common carrier service.

First, in response to the Comcast court decision, the FCC is hastily gambling away the benefits of broadband's proven "solid business foundation," in its longshot bet to win back an unproven "solid legal foundation" for the FCC.  

FTC's Google-AdMob Antitrust Checklist

Many are missing the forest for the trees in jumping to the conclusion that the two-week extension in the FTC's review of Google-AdMob means the FTC is reconsidering the FTC's staff recommendation to block Google-AdMob as anti-competitive.

  • Google is cleverly trying to misdirect the focus off Google being the actual #2 in-app mobile advertiser, which is buying the actual #1 AdMob market leader, by talking up the potential competitive advertising threat of a distant #3 player Quattro being bought by non-advertising company Apple. 
To see the big picture and understand the likely outcome here that the FTC will block Google-AdMob, its helpful to run through the FTC's likely Google-AdMob checklist decision process.  

1. Are Google and Admob competitors? Yes.

  • By their own admission they are actual direct horizontal competitors.

2. Is the market highly concentrated? Yes.

  • Google is the #2 in-app mobile advertising provider with ~25% share and is seeking to buy #1 AdMob, which has ~50% share. See here & here

3. Are there barriers to entry? Yes.

  • Online markets are widely known to be characterized by first mover advantage, network effects, and the scale and scope advantages of inventory, distribution, audience, and client base.

4. Does Google have market power? Yes.