FTC

Public interest groups supportive of net neutrality like Common Cause and The Maine Civil Liberties Union are trying to "spin" the press that the non-binding net neutrality resolution passed by the Maine Senate is somehow an important first for a state.

• The reality is that supporters of net neutrality thought that the support of net neutrality by Dorgan-Snowe co-sponsor and Maine Senator Olympia Snowe would somehow increase the chances of passing net neutrality legislation for the first time in the state of Maine.
• They were wrong. 
• This legislative effort in Maine failed just like it did in Michigan and Maryland, and just like it did in every Federal forum it was raised in.   
• This Maine Senate "non-binding resolution" is simply hortatory puffery, akin to naming a state insect or a state weed.  
• The reality is that the Maine legislature did not pass legislation and that it clearly acknowledged in its resolution its understanding that the Internet is exclusively Federal jurisdiction.
• There is nothing that could be more Federal or "interstate" than the "INTERnet!"

This episode in Maine really is emblematic of the whole net neutrality movement.

Google, in making a high-profile complaint to the Justice Department and State Attorney Generals, about Microsoft's latest operating system Vista, appears to be naively unaware of its own antitrust vulnerabilities in its pending Google-DoubleClick antitrust review at the FTC.

• The NY Times made Google's complaint a top right cover story on Sunday and the Wall Street Journal featured Google's complaint as its top business story Monday.  

It has always been unwise for those in "glass houses to throw stones."

Just after Google's CEO Eric Schmidt summarily dismissed privacy concerns as an issue in the FTC's review of the Google-DoubleClick merger, a privacy watchdog group said "Google inc.'s privacy practices are the worst among the Internet's top destinations," according to an AP article "Watchdog group slams Google on privacy." 

• "...London-based Privacy International assigned Google its lowest possible grade. The category is reserved for companies with "comprehensive consumer surveilance and entrenched hostility to privacy."

American privacy groups are petitioning the FTC (EPIC, CDD, and US PIRG) to address the privacy issue in the context of the Google-DoubleClick merger.

• Privacy groups in the US and in Europe are rallying around this issue, because as the NY State Consumer Protection Board has said: "Google's database...will make up the world's single largest repository of both personally and non-personally identifiable information."
• Investors and others that dismiss privacy as a competitive concern in the Google-DoubleClick merger -- do so at their own peril.

Why is privacy a competitive issue in the Google-DoubleClick merger?

FCC Commissioner Robert McDowell gave an outstanding speech today at the Broadband Policy Summit in which he did the single best job I have seen totally debunking the OECD rankings that purportedly indicate the US is falling behind on broadband.

Commissioner McDowell explains with example after example -- how skewed the OECD methodology is.

• My personal favorite line in the speech was on how the OECD methodology is skewed against the US:

• "...even if every existing broadband subscriber in America had a fiber-fed 100 mbps broadband connection, we would only rank 12th."

Like the discredited and shameful congressional practice of fleecing the American taxpayer with "earmarking" public funds for special interests, Frontline-Google and eBay-Skype are asking for the equivalent of special interest commercial "earmarks" from the FCC.

It is outrageous that the FCC is actually entertaining these proposed special interest scams against the American taxpayer. 

• The FCC should keep the auction free of the corrupting influence of spectrum or policy "earmarks" for the obvious benefit of only one company lobbying the process for permission to pick the American taxpayers' pocket.

What am I talking about specifically? Two special interest spectrum/policy "earmarks" are getting a lot of press attention lately.

Yet another state legislature has rejected passing a law mandating net neutrality -- this time in Maine, the home state of Senator Olympia Snowe, one of net neutrality's primary sponsors and highest profile proponents in the US Senate.

• Moveon.org/SaveTheInternet are now 0-3 in their hand-picked states where they thought they had the best chance of passing a version of the Senate Snowe-Dorgan bill or the House Markey bill from last year -- and where they focused their efforts.  
• Previously, Moveon.org?SaveTheInternet failed to pass net neutrality legislation in Michigan, and Maryland.

To let the net neutrality proponents save face, the Maine Senate passed a resolution, not legislation, that asks for a study on net neutrality to be completed next year.

• This is the same outcome as has occurred at the Federal level as both the FTC and FCC are studying net neutrality and seeking comments.
• Both the FTC and the FCC have said that they do not see a current problem in the marketplace concerning the alleged problem of net discrimination.
• Moreover, the Maine resolution also recognizes that net neutrality is a federal issue and that Maine does not have jurisdiction over the net neutrality issue.

I fully expect that Moveon.org and SaveTheInterent will continue to waste valuable state legislative time and resources on a problem they cannot even define or prove exists.  

• They don't seem to "get" or care that the Internet is Federal jurisdiction and Federal policymakers at every official level have rejected calls for net neutrality legislation.

An  Associated Press article, "Google Chairman dismisses privacy issue" could turn out to be like waving a red cape in front of a bull.

• Relevant parts of the AP story:
•   "Google Chairman Eric Schmidt said Wednesday that U.S. regulatory approval of his company's proposed acquisition of DoubleClick will not be hindered by concerns over privacy."

• "Schmidt said that Google, when considering the acquisition, "looked very carefully" at privacy and other issues that would come under legal review "because we knew competitors would raise those issues, as indeed they have."

For anyone watching Google closely, they are cleverly locking up all the leading segments of the Internet which control the monetization access points to Internet content.

• Per MediaWeek, June 1st Google bought Feedburner, the largest feed and blog advertising network, which also happens to have the best quality and quantity of major content providers who subscribe to blog feeds.
• It's a shrewd and brilliant move, if the antitrust authorities allow it.
• This comes on the heels of its April proposed merger with DoubleClick, the largest adserving company on the Internet, which is estimated to serve 80-85% of Internet users with display ads per EPIC.
• That came on the heels of the closing of Google's YouTube acquisition, which makes Google the owner of the largest user-created video content network and one of the most popular destinations on the web.

Anyone else see a pattern here?

The New York Times article today by Miguel Helft, "Google photos stir a debate over privacy"  provides a great public service in highlighting yet another example of Google's cavalier approach to guarding peoples' privacy.

• This section of the NYT article captures the creepiness of Google's new "Street View "photo service" and what it says about Google's storied culture of "innovation without permission" (or supervision):

• “The issue that I have ultimately is about where you draw the line between taking public photos and zooming in on people’s lives,â€? Ms. Kalin-Casey said in an interview Thursday on the front steps of the building. “The next step might be seeing books on my shelf. If the government was doing this, people would be outraged.â€?

Reed Hundt is up to his old "managed-competition" tricks again. 

• The former Clinton-Gore FCC Chairman is now Vice Chairman of Frontline Wireless, which wants the FCC to auction spectrum to them requiring net neutrality/open access -- so effectively no company will be able/or want to pay much for the 700 MHz spectrum -- and so Frontline Wireless could capture this most valuable spectrum available at the market-managed price of -- pennies on the dollar. 
• It is highly relevant that Frontline is financially backed by big Google investor/Board members; their involvement was probably orchestrated by Google Senior advisor Al Gore, Hundt's political benefactor in the Clinton-Gore Administration.  
• A big part of Google's strategy for value creation and 90% gross margins is to take intellectual property without permission or compensation and to secure use of bandwidth and spectum below market cost. 
• True to form in this new venture, Mr. Hundt has never met a marketplace that he didn't think he could personally "manage" better than the free market can.

The FCC should be very very careful in following this policy charmer's latest government intervention advice on the 700 MHz auction, because he has been personally responsible for most all of the largest wild goose chases that the FCC has been involved in over the last few decades.