You are here eBay's radical industrial policy petition to FCC for Wireless net neutrality
Submitted by Scott Cleland on Thu, 2007-02-22 10:42
eBay-Skype's recent petition to the FCC to impose a form of wireless net neutrality on the competitive wireless carriers is radical, outrageous and incredibly self serving.
- Skype is petitioning the FCC to mandate 1968 Carterfone rules for wireless proposed in Professor Tim Wu's vacuous FTC white paper on the topic. Simply, eBay-Skype doesn't want cell-phones and cell service to be sold together as a bundle.
Why is this a radical, out-of-the-mainstream idea?
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First, the government regulates NO competitive industry like eBay-Skype is proposing. What eBay-Skype is proposing the FCC mandate is unprecedented in the digital communications era throughout the U.S. economy.
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eBay-Skype and its NN supporters try to maintain the charade that their requests are "normal" or "status quo" requests.
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There is nothing status quo in this proposal. While most everyone else is looking to see how competition policy is working and how it might be improved, eBay-Skype said in FTC testimony last week, by eBay-Skype official Tod Cohen, that even a competitive market of 4-5 providers won't solve the problems of limitations on wireless devices by wireless carriers.
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Second, eBay-Skype is directly repudiating bipartisan, consensus, U.S. policy to promote competition and proposing a old-school industrial policy where the government picks which technologies consumers can choose from and which companies/industries will win and which will lose.
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To be very specific, eBay-Skype's petition in essence asks the FCC to effectively choose:
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eBay-Skype as the government-chosen wireless technology and business model;
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to proactively kneecap eBay-Skype's current wireless carriers so they can't effectively compete; and
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completely disrupt and radically restructure a extremely competitive industry that serves the safety, convenience and necessity of 230 million Americans -- simply to make it easier and more convenient for eBay-Skype to offer its competitive service.
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This may be the economic legacy and market mindset of Skype's founders who come from the former Soviet Socialist Republic of Estonia, but it is not modern American capitalism where we believe free markets of supply and demand are vastly better at meeting the needs of the nation and consumers that a bureaucrat-managed economy.
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Third, this forced-unbundling approach of Carterfone is completely outrageous in a competitive context.
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The 1968 Carterfone decision was based on the legal premise that their was a monopoly (i.e. no choice) stalled innovation, anti-competitive behavior.
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The exact opposite conditions exist today: vibrant competition, choice and innovation.
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Professor Wu's and eBay-Skypes callous disregard for the facts underlying their proposal are irresponsible and outrageous.
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Fourth, Professor Wu and eBay-Skype are trying to use the term "locking" as a perjorative phrase in this context.
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Locks are not a bad thing but a good thing.
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Everyone of us "locks" our home, our cars, our PC with password protection.
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Why is it OK to "lock" everything else we value but not a cell-phone?
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Finally, to better appreciate how outrageous and out of the mainstream this proposal is think of analogies.
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Its like telling WalMart, KMart, Giant, or Safeway that they must become "free" malls where they have to give floor space and shelf space to competitors who want to reach their customers!
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