The FCC wireless broadband auction starting this week is a showcase of how far pro-competition and de-regulation policy has come, and conversely how far the neutrality-ites have their head in the sand about the real competitive broadband situation.
This FCC spectrum auction is all about enabling new and/or better major competitive alternatives to the 4-9 competitive alternatives that exist now:
i.e. the new players: DBS Wireless/DirecTV-Echostar; Cable Wireless/Comcast-TimeWarner-Cox; and T-Mobile; and
the existing competitive alternatives: 1. Cable modems; 2. DSL; 3. Satellite broadband; 4. Verizon EVDO; 5. Sprint EVDO; 6. Cingular Wireless Broadband; 7. Intel-Clearwire; and 8. WiFi/Muni-WiFi; and 9. broadband over powerlines (BPL).
Emerging and growing broadband competition is very real. New entrants are willing to pony up a lot of real cold hard cash for down payments in the FCC Auction. This strongly suggests that the wireless broadband competitive opportunity is large -- absent NN regulation. The DBS players have put down a ~$1 billion upfront payment, Cable ~$600m, T-Mobile ~$600m, Cingular $500m, and Verizon ~$400m.
Once again, where are the online giants? Google, Yahoo, eBay, Microsoft, and Amazon; apparently they are not bidding. It appears the online giants would rather price regulate their broadband competitors and freeload off those who are willing to invest real money in improving the Internet -- by backing the Snowe-Dorgan NN regulation bill.
As the evidence rolls in, it becomes increasingly apparent that NN is anti-competition. As I have said from the beginning of my blogging on this topic, net neutrality really is a repudiation of the purpose of the 1996 Telecom Act: "to promote competition and and reduce regulation in order to secure lower prices for American telecommunications consumers and encourage the rapid deployment of new telecomunications technologies."
The reason Congress nearly unanimously passed that Act was that there was very broad consensus that monopoly regulation (like the Snowe-Dorgan approach) does not give consumers the benefit of choice, innovation and lower prices. Neutrality-ites apparently yearn for a return to the good old days of one-size-fits-all price regulation of the dial-up world. They seem to have conveniently forgotten that it has been de-regulation that has fueled broadband deployment and competitive choice.
This decade-long experiment of the Telecom Act has succeeded tremendously when it relied on market forces. However, it failed miserably and tragically when the government tried to manage market outcomes. Clinton-Gore FCC Chairman Reed Hundt unabashedly tried to "manage telco-CLEC competition, which directly helped facilitate the disastrous CLEC and Fiber market bubbles which cost American investors and pensioners over $1 trillion. Hundt also over-reached with his hyper-regulatory "one-size-fits-all" UNE-P pricing scheme. That made-up policy was found illegal by the courts but only after nine years of unproductive litigation and postponed inter-modal competition and broadband deployment.
The Hundt-ian hubris is back in full bloom in the one-size-fits-all net neutrality approach in the Snowe-Dorgan bill.
Is there no shame for the track record of this failed policy approach?
