Corporate Welfare

The FCC’s approach to special access is all wrong because they should be doing the exact opposite of what they are doing. The FCC should be price de-regulating special access, not signaling increased micro-regulation of special access rate terms and conditions.

Like an ostrich, the FCC has its head hidden in the sand on its approach to special access regulation, hoping that no one notices that the rest of its body is fully exposed.   

If the FCC can convince everyone to join them and put their heads in the sand too, and to look at special access regulation in the dark of self-defined isolation, and ignore the broader context of the competitive U.S. communications sector visible all around them, the FCC has a reasonable chance of sounding reasonable.

However, if anyone has their head out of the FCC’s regulatory sandpit and looks around for a moment at special access regulation in the broader context of the real world, more special access regulation looks ridiculous, just like the exposed back-end of an ostrich does when it hides its head in the sand.  

The juxtaposition of Google tacitly accusing the EU with “digital protectionism” and “discrimination” as the EU’s Digital Chief, Günther Oettinger, visits D.C. and Silicon Valley, while the Google-created Internet Association this week asks for U.S. protection from ISP “discrimination” in an appeals court brief in support of the FCC’s Open Internet order – exposes exceptional hypocrisy.

Antitrust and privacy regulators around the world weren’t born yesterday. They know Google and its online platform allies want it both ways – manipulating policy to advantage them and disadvantage their potential competitors.

The FCC’s 218 page “brief” defending its Open Internet Order begs a big question.

How many times is it “reasonable” for any agency to assert that their core legal arguments are “reasonable” before they sound unreasonable? A few? Several? A dozen?

Of the 19 core statutory arguments in the summary defense of the FCC’s Open Internet order, TWELVE defend the order by declaring the FCC’s legal judgment was “reasonable.”

When arguing in court that the FCC has the statutory authority to common-carrier-regulate the Internet for the first time, shouldn’t the FCC be able to declare at least once in their summary defense: “the law says,” “precedent supports,” or at least “Congress intended?”  

Google Fiber’s motto is “Think big with a gig,” as in gigabit fiber broadband speeds.

However, if one is open to considering non-Google data, there is substantial evidence that Google Fiber’s de facto motto may be more like “Think vig for the pig,” as in the non-transparent, corporate-welfare vigorish that Google Fiber takes to feed Google Inc.’s porcineappetite for 1) Local government subsidies and special government treatment; 2) immunity from state and local law enforcement; and 3) FCC price subsidies and use of consumers’ private-information without consent. 

Everyone should have the freedom to innovate and compete in America, the land of opportunity.

There should be no innovation or competition double standard where government politically picks winners and losers by rigging competition via denying some companies the freedom to innovate and compete spectrally while granting it to their competitors.

With radio spectrum, America has created different but symbiotic spectrum models. One is licensed spectrum where spectrum for exclusive use is auctioned to the highest bidder. The other is unlicensed spectrum where anyone is free to share the same spectrum if they play nice and do not interfere with other spectrum sharers’ use. These models have never been either/or; they have always been free and open to use separately or together to maximize innovative, commercial, and competitive opportunity.    

Imagine if one company out of the Fortune 500, #474 with ~$6b in revenues, and 2,000 employees, representing about .03% of U.S. GDP, and .06% of the population, comprised 36% of all the vehicle traffic going in one direction on our interstate highway system on any given day.

Now imagine that one company’s lobbying was instrumental in convincing the government to grant that company’s business model the right to commercially use the highway system forever for free, by not ever having to pay a standard gas tax or private highway tolls, like other businesses or people do to pay for the relative wear and tear that their usage causes on the highway systems.

Imagine further that the government justified this special one-way highway traffic treatment, by saying it would be better and fairer for everyone if the companies that use and profit most from using the most one direction of the highway system never had to pay for that delivery benefit – that consumers should subsidize their commercial use and profits in “perpetuity.”

The company’s situation you just imagined is Netflix’. The government agency is the FCC. And the perverse government arrangement is the FCC’s mandate of a permanent zero price for all Internet downstream traffic.  

We will learn quickly and unequivocally at the FCC’s August 6th meeting, if the FCC is true to its word -- that there will be no “utility-style rate regulation” of broadband.

While the FCC’s Open Internet Order fact sheet stated: “the Order makes clear that broadband providers shall not be subject to tariffs or other form of rate approval, unbundling, or other forms of utility regulation,” will the FCC majority -- in its first post-Open-Internet-order ruling -- cynically do the exact opposite by imposing de facto “utility-style rate regulation” to the IP transition from copper to fiber networks?

The FTC’s Googlegate cover-up problem is that while the FTC may be telling the truth, they apparently are not telling the whole truth and nothing but the truth.

Don’t miss the brief summary below of the role political influence played in the politically messy closure of the FTC-Google antitrust investigation in 2013.

The evidence of FTC special treatment for Google, coupled with an apparent FTC cover-up of the political influence that may have defanged the FTC’s investigative process, is particularly relevant to: the European Commission’s current antitrust investigation of Google’s abuses of its <90% dominance in Europe; reported U.S. Senate oversight interest in the FTC’s closure of the Google investigation; and Mississippi AG Jim Hood’s State-led antitrust and consumer protection investigation of Google.

Public evidence concerning the amount of special access Google has to the highest reaches of the U.S. Government creates at least the appearance that the U.S. Government’s business may not be “conducted with impartiality and integrity” as required under Federal ethics rules.

On February 26^th, the FCC executed President Obama’s call to “implement the strongest possible rules” to regulate the Internet as a telephone utility under “Title II” of the Telecommunications Act.

Legally, the result of this “reclassification” was for President Obama and the FCC to assert regulatory jurisdiction over the Internet ecosystem, creating a de facto American “Digital [Internet] Single Market” industrial policy, like the European Commission is in the process of creating for the European Union.

Legally, America now has a single digital telecommunications/Internet market/ecosystem because the FCC is effectively reclassifying Internet traffic as Title II telecommunications and Title II is a holistic, end-to-end, 1934 regulatory regime designed for the FCC to decide most everything in the assumed monopoly telecommunications ecosystem from originating and terminating local access, long distance, phone and network equipment manufacturing, directories, etc.