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Opposing "The Verge" of Socialism -- My latest Forbes Tech Capitalist post

Please see my Forbes Tech Capitalist blog "Opposing "The Verge" of Socialism" here, which rebuts Joshua Topolsky's Washington Post column: "Want better wireless service in America? Socialize it."

Debunking FreePress' Claim Verizon Violated Net Neutrality

FreePress' latest trumped up net neutrality charge alleges in a complaint to the FCC that Verizon violated net neutrality in limiting access to third-party tethering applications on Google's Android platform, (like other carriers have) -- applications that effectively would enable Android users to bypass standard Verizon data usage plans and improperly consolidate usage of multiple devices onto one device data usage plan.

 

  • Specifically, FreePress is singling out Verizon by alleging that Verizon has violated its unique net neutrality obligation, because Verizon is using the spectrum of a special 700 Mhz "C" Block license that came with some special obligations (see para 223) concerning offering reasonable open standards to devices and applications.
  • Simply why FreePress' charge is bogus here is FreePress is essentially claiming that when one person pays for an all-you-can eat buffet, that one person should be entitled to feed others off of the their refillable plate; anyone with an ounce of propriety knows that is cheating.

 

This analysis will:

 

FCC Wireless Competition Deniers Need an Open Mind to the Facts

If reports are true that the FCC is planning on claiming in its upcoming wireless competition report that the FCC cannot conclude that the U.S. wireless market is effectively competitive, then the FCC is neither "data-driven" as it claims, nor in touch with market reality.

  • Don't miss the latest CTIA assessment of U.S. wireless competition and innovation HERE.
  • The facts and evidence are overwhelmingly indicative of vibrant competition.

If the FCC is a wireless competition denier in the upcoming wireless competition report, despite the overwhelming factual evidence to the contrary, the FCC seriously risks its going-forward credibility with Congress, the Courts, industry and the public.

The FCC's public wireless network blocks lawful Internet traffic

According to the FCC's own hard-to-find disclosure, the FCC does not operate its own broadband "public use wireless 'Hotspot' network" according to the FCC's Open Internet regulations that it mandated for most everyone else.

 

  • Without this link to the policy, one would have to stumble upon the oblique reference to the 4-27-11 "VPAAC Hotspot Network" reference in the FCC newsroom, then click on "VPAAC Hotspot Network" and then click on the button "Expand," then go to the very end of the document, to find the FCC's terms-of-use policy for its public broadband network.

 

Ironically, the FCC's public wireless network terms-of-use policy #3 says: the FCC's broadband network "will block all inbound Internet traffic to minimize any negative impact" on the network user.

 

  • This blocking of Internet traffic is in stark contrast to the FCC's Open Internet Order, which essentially defined Internet "openness" throughout the order as not blocking lawful Internet traffic requested by a user.

 

The FCC's own public network policy is also not transparent like it expects most every other broadband provider of Internet access service to be.

 

Rural Cellular’s Dilemma: Can’t Win the Future, Anchored to the Past

 

The Rural Cellular Association’s opposition to the AT&T/T-Mobile acquisition puts a spotlight on the un-sustainability of the analog rural cellular model that is on the wrong side of broadband change.

 

  • The clear but unspoken subtext of the RCA’s opposition is their recognition that their current subsidized model of rural cellular providers is fundamentally ill-equipped for the competitive broadband era.
  • Simply, the RCA is quixotically trying to drag the anchor of an inefficiently and unsustainably subsidized analog business model into the efficient and competitive broadband Internet future – a recipe for losing the future.

 

Importantly, most of the RCA’s problems exist completely separate from this transaction.

 

The Dangers of Over-Regulating Competition

As a regular reader of Steve Pearlstein's Washington Post's business column, I was dismayed at the consistent pro-regulation frame of Sunday's piece on the AT&T-T-Mobile acquisition: "The Revenge of the Baby Bells."

The hallmark of longstanding bipartisan competition policy has been that if market players have the freedom to succeed or fail at differentiating, innovating and investing to meet consumers' rapidly evolving needs, market forces can maximize consumer welfare much better than FCC regulators can.

 

  • Current fierce communications sector competition on multiple levels, vibrant innovation and massive private sector investment have proven Congress' wisdom in instituting competition policy to replace economic regulation as the best framework to maximize consumer welfare in communications.
  • Without the 1996 Telecom Act replacing economic regulation with competition policy, the Internet would be a fraction of the phenomenon it it today.

 

Thus it is dismaying that Mr. Pearlstein crafted a false choice in his column: "...stick with the competitive, lightly-regulated model and... block a merger... or it could acknowledge... the "telephone" market is a natural oligopoly... and... requires much stronger government regulation."

 

How FCC Data Roaming Order Undermines FCC's Net Neutrality Regulations

The FCC's Open Internet Order is even more likely to be overturned in court than before because the FCC's extraordinary delay in publishing its December net neutrality regulations has oddly moved the FCC's April Data Roaming Order to the front of the line of cases challenging the FCC's overall legal authority to regulate broadband.

 

  • (The April 7 Data Roaming Order was published in the Federal Register 29 days after the decision; the December 21 Open Internet Order may not be published until late summer or fall, 7-9 months after the decision, per Politico's Morning Tech.)

 

 

Consequently both cases are now more likely to be heard in the FCC-unfriendly D.C. Circuit Court of Appeals.

Read Randy May's Great NRO Piece "Rolling Back Regulation at the FCC"

Kudos to Randy May of the Free State Foundation for his outstanding must-read piece in the National Review Online: "Rolling Back Regulation at the FCC --How Congress Can Help Competition Flourish."

It is a very important reminder that Congress nearly unanimously set U.S. communications policy in 1996 "to promote competition and reduce regulation," in stark contrast to the FCC's Open Internet de-competition policy.

  • Randy is also spot on in encouraging Congress to re-fortify its extremely successful 1996 pro-competition policy by changing the burden-of-proof to assuming competition is superior to regulation, in order to counter the FCC's deep-seated bureaucratic instinct to regulate in order to perpetuate itself.

Randy is also dead right that the FCC looks backward to preserve its regulatory raison d'etre, rather than looking forward, obeying the law and trusting competition to drive consumer benefits.

We so need an FCC that genuinely encourages competition and lets consumers and the market choose market winners and losers, not the FCC.

 

 

 

 

 

The Net Neutrality Accountability Gauntlet

The House's rejection of the FCC's December Open Internet order 240-179 is just the latest in an ongoing high-profile accountability gauntlet for the FCC's unauthorized, unwarranted and unjustified net neutrality rules.

 

  • While the wheels of democracy, public accountability, and the rule of law can turn slowly, they do turn steadily.
  • And from what we have seen so far, the FCC's out-of-the-mainstream, over-reach effort to regulate the Internet for the first time, has been pummeled in our Government's accountability process gauntlet to date, and it can be expected to continue to be pummeled going forward.

 

The Net Neutrality Accountability Gauntlet:

     

     

    First, the President's January Executive Order, "Improving Regulation and Regulatory Review" to seek the "least burdensome" regulations, was a big post-mid-term election political pivot by the Administration to be more sensitive to business, economic growth and job creation concerns.

     

    • Through the new lens of the President's Executive Order, the FCC's pre-mid-term-election-mindset net neutrality rule making has been viewed as badly out-of-focus with the renewed bipartisan interest in economic growth and job creation.

     

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    Q&A One Pager Debunking Net Neutrality Myths