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Corporate Welfare

Perspective on the FCC’s Special Access Delay of its IP Transition – Part 7 Special Access Series

FCC staff just muffed an easy opportunity to advance the IP transition on the FCC’s timetable in the National Broadband Plan.

Apparently FCC staff missed the big picture here.

1. On November 25th, AT&T proposed a baby step forward in the IP Transition.

AT&T did not propose any change in special access rates. AT&T simply proposed that its special access contract term-lengths, synch up with the FCC’s own goals for when the IP transition should be complete.

Instead of promoting investment certainty -- by respecting its own IP transition timetable that the private sector has come to rely on for infrastructure investment planning -- FCC staff announced an unnecessary five-month investigative delay.  

FCC Shouldn’t Pick Wireless Technologies

Some wireless competitors and the DOJ/OSTP are urging the FCC to effectively change their spectrum aggregation rules to treat low-band spectrum-technology <1 GHz competitively different than high-band spectrum-technology >1 GHz.

If the FCC complies, it effectively would subdivide the current spectrum marketplace into two technology markets: <1GHz and >1GHz, for the first time in twenty years of spectrum auction history. It also would set the precedent for the FCC to arbitrarily subdivide the spectrum market further in future auctions based on the FCC’s latest technology-mix prognostications at that time.

Big picture, it would represent a regression back towards the 1980s pre-auction period when the FCC, not competitive market auctions, decided which company got what spectrum, and how certain spectrum was allocated.

YouTube is Ultimate a la Carte – My Daily Caller Op-ed

 

Please see my latest Daily Caller op-ed, “YouTube is Ultimate a la Carte” – here -- on Senate Commerce Committee Chairman Rockefeller’s new legislation: “Consumer Choice in Online Video Act.”

 

  • It is Part 21 of my Broadband Internet Pricing Freedom series.

 

Broadband Internet Pricing Freedom Series

 

Part 1: Netflix' Glass House Temper Tantrum Over Broadband Usage Fees [7-26-11]

 

The New U.S. Spectrum Policy Has Big Problems – Part 9 -- Government Spectrum Waste Fraud & Abuse Series

Please see my latest Daily Caller op-ed: "The New U.S. Spectrum Policy Has Big Problems” -- here.

  • It critiques the new Presidential Memorandum: “Expanding America’s Leadership in Wireless Innovation.”
  • It is also Part 9 of my Government Spectrum Waste, Fraud & Abuse Research Series.

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The FCC/DOJ’s One Gigahertz Spectrum Charade – My Daily Caller Op-ed & Part 8 of Government Spectrum Waste, Fraud & Abuse Series

Please see my latest Daily Caller op-ed: "FCC/DOJ’s One Gigahertz Spectrum Charade" -- here.

  • It is Part 8 of my Government Spectrum Waste, Fraud & Abuse Research Series.

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Government Spectrum Waste Fraud and Abuse Research Series

Obsolete Analysis Will Doom DOJ's Antitrust Probe of Cable -- My Daily Caller Op-ed

Please read my latest Daily Caller Op-ed: "Obsolete Analysis Will Doom DOJ's Antitrust Probe of Cable" here.

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Obsolete Communications Law Op-ed Series:

Part 1: Obsolete communications law stifles innovation, harms consumers

Part 2: "The FCC's Public Interest Test Problem"

Part 3: "FCC Special Access: Communications Obsolete-ism vs. Modernism"

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Broadband Usage Pricing Research Series:

Part 7: "Broadband Pricing is Naturally Evolving to Usage Tiers"

Part 6: "Leaf Vision & Broadband Usage Caps"

Part 5: "Consumer Group's Advocacy Hypocrisy"

FCC Special Access: Communications Obsolete-ism vs Modernism -- My Daily Caller Op-ed (Part 3 in Series)

Please read my latest Daily Caller Op-ed: "FCC Special Access: Communications Obsolete-ism vs. Modernism" here.

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Obsolete Communications Law Op-ed Series:

Part 1: "Obsolete communications law stifles innovation, harms consumers"

Part 2: "The FCC's Public Interest Test Problem"

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Precursor Special Access Research Series:

Part 5: "FCC: Forced Access Economics & Selective Math"

Part 4: "Special Access Facts Show More Not Less Competition"

Part 3: "What's the Broadband Plan Implementation Vision? Affirming Competition Policy? Or the Retro-genda?

Part 2: "Special Access Nostalgia for Telecom's Bronze Age is No Path to 21st Century Broadband Leadership"

Netflix' Net Neutrality Corporate Welfare Plan (Part 10 of a Series)

Apparently Netflix is angling to become Silicon Valley's king of corporate welfare. We learn from a New York Times economics column advocating for an Internet industrial policy that "Netflix is trying to build a coalition of businesses to make the case for… net neutrality." And that the "online video powerhouse Netflix started a political action committee to complement a budding lobbying effort in support of the idea that all content must be allowed to travel through the Internet on equal terms" -- translation: always at no cost to Netflix.

But Netflix isn't in need of public assistance; it is America's video subscription leader with 23 million subscribers. Netflix has $3.3b in annual revenues, $1.2b in gross profits, $800m in cash, a 34% return on equity, and a market valuation multiple over twice the market's. And Netflix flexed its exceptional pricing power last year in raising its prices 60% without losing many subscribers.

T-Mobile to FCC: Give us a Do-Over and Verizon's Cable Spectrum Too

T-Mobile demanded last week that the FCC deny the Verizon-Cable spectrum license transfer, apparently so Deutsche Telecom/T-Mobile could get it at a deep FCC managed-market discount.

The FCC is not Deutsche Telecom/T-Mobile's personal do-over button that they can push and magically reset the marketplace to an earlier time more to their liking. All other players have made market-driven decisions and have to live with them, and so should Deutsche Telecom/T-Mobile. That's the essence of free-market competition, companies move forward or backward based on their own market-driven choices. It's not competition or a market, if those who don't like the outcome of their own market decisions, run to government for a do over and quasi-international bail-out.

Let's review how T-Mobile got to this point.

For years T-Mobile has been a seller of its spectrum; because its parent Deutsche Telecom has long wanted to exit the U.S. market because it requires more capital investment than they are willing or financially able to expend.

Spectrum: To Auction or Not to Auction?

The FCC's recent call for unbounded spectrum auction authority spotlights an important debate over whether some of this scarce and extremely valuable wireless spectrum should be auctioned or not.

  • Ironically the FCC is asking Congress to give it spectrum auction authority to not auction spectrum.
  • In other words, the FCC is asking to be unilaterally empowered to decide not to auction some spectrum so it can deem it "unlicensed spectrum," like that used for WiFi and garage door openers.

There are huge fiscal problems with the FCC's position, given our nation's severe fiscal situation: a trillion dollar Federal budget deficit and a ballooning multi-trillion dollar public debt.

First, the real world effect of the FCC's gambit here is to try and get revenue-raising legislation to not raise many billions of dollars.

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Q&A One Pager Debunking Net Neutrality Myths