Competition

In order to justify broadband price regulation in the Open Internet and Data Roaming orders, the FCC and FreePress must continue to undermine Congress' competition policy by denying the increasingly obvious and incontrovertible facts that users competitively substitute broadband services between various broadband technologies like copper networks/DSL, cable modems, fiber, WiFi/WiMax, wireless broadband, and satellite.

FreePress' radical anti-business, anti-capitalism politics lead it to make up or contort facts and analogies in order to promote its world view of a publicly-owned and regulated Internet commons.

In FreePress' latest opposition to the AT&T-T-Mobile merger, FreePress continues to nonsensically analogize this merger with the Ma Bell monopoly.

The FCC's latest arbitrary and capricious torturing of the facts, law, and common sense, in its most recent 706 report, makes it obvious that the FCC is "in search of relevance" and highly insecure about its authority and role in the broadband competition era.

• Apparently, the FCC now sees competition-driven consumer benefits as a threat to the FCC's relevance, role and authority.
  • If the bipartisan policy/law of promoting competition succeeds, then the FCC by definition has less and less to do.
• It is becoming increasingly apparent that many at the FCC don't want competition policy to succeed, because they vainly believe that the FCC can, and should, mandate social outcomes "better" than market forces and consumer choice can produce via competition.

Thus the pro-regulation forces at the FCC are increasingly and proactively seeking to discredit competition policy wherever possible by ignoring and torturing any facts, evidence, logic and common sense that do not forward their government-centric-view that "expert" FCC regulators invariably know best.

Consider the common thread between:

Like pro-regulation forces did everything they could to undermine competition policy to justify FCC net neutrality regulation last year, those same FreePress-led pro-regulation forces are focused in 2011 on trying to characterize the AT&T/T-Mobile combination as a threat to competition -- so that they can impose new regulations on AT&T that they can then try and force on the rest of the industry.

The problem is that the FreePress-led pro-regulation forces are trying to convince people of the preposterous claim that the AT&T/T-Mobile merger will reconstitute the Ma Bell Monopoly when the obvious facts are that AT&T is no longer dominant 27 years after the Bell-break-up.

The Senate Judiciary Antitrust Subcommittee hearing on the AT&T-T-Mobile merger is entitled: "The AT&T/T-Mobile Merger: Is Humpty Dumpty Being Put Back Together Again?"

Just like it was preposterous last year that the U.S. was falling behind on broadband because of insufficient competition, it is preposterous that the AT&T/T-Mobile merger will reconstitute the the Ma Bell monopoly.

The latest debate over net neutrality regulation in the House Judiciary Committee today spotlighted for me three big fundamental questions that the FCC has still not answered.

1. If the alleged net neutrality problem the FCC claims to be trying to solve in the Open Internet Order was so incredibly urgent to put in place in December, that everyone's holiday plans at the FCC had to be disrupted, why is the publishing of the rules in the Federal Register happening at such a leisurely, anything-but-urgent, pace?
2. When the law of the land has a clear national policy bias "to promote competition and reduce regulation," how does the FCC legally justify an FCC Open Internet policy bias to promote regulation and reduce competition?
3. How can the FCC use an obviously de-regulatory, pro-competition provision of law, Section 706, to legally justify an obviously regulatory de-competition Open Internet Order?

As the DOJ and FCC research and sort through the competitive facts of the AT&T-T-Mobile acquisition for themselves in the months ahead, it will become clear that opponents' current rhetoric and assertions are over-the-top, exaggerated and simply not credible.

• FreePress and others' claims that this transaction will enable AT&T to "monopolize everything" and reconstitute the "Ma Bell Monopoly," are political demonization arguments devoid of evidence; they are designed to discredit U.S. competition policy, demonize free markets, and justify new FCC interventionist regulation like net neutrality, special access etc.

I.   The Relevant Facts:

In responding to the growing uproar of hypocrisy over comments made during Google's investor call by Google's CFO that "...everybody that uses Chrome gives us a guaranteed locked-in user" for Google," Brandi Sparkles, Google's renowned crisis PR expert, held a press conference today for just Google-friendly media.

• Brandi Sparkles was joined on the Mountain View dais by Google's Official Keeper of the Google Narrative, Mr. Stori Spinner, and Director of Google's "That Was Not Us" Office, Ms. Anne Teetrust-Violet.

Brandi Sparkles read the following statement to friendly reporters and did not take any questions, in keeping with Google CEO Larry Page's new approach to the media.

"All discussion of Chrome and how it gives Google a "locked-in user," and that "the lifetime value of a Chrome user is phenomenal," that some claim occurred on last week's Google earnings call, was not authorized by me, so it simply did not happen.

We are in the process of innovatively "tweaking" our search algorithm so you will not find any evidence to the contrary. Only the extensive remarks by new CEO Larry Page on the call should be considered official, and his comments should be more than enough information and transparency to put this issue permanently to rest.

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.

There are many major going-forward implications resulting from the DOJ's latest antitrust enforcement action against Google -- this time to mitigate the anti-competitive effects of the proposed Google-ITA transaction.

• (See: Complaint, Competitive impact Statement, Proposed Final Judgement, Order, Release.)

Summary of Implications:

1. Google is clearly the DOJ's main antitrust concern.
2. DOJ is 4-0 against Google while FTC is 0-2.
3. DOJ concludes Google is a monopoly -- again.
4. Remarkably, Google is actively choosing a regulated future for itself.
5. Google is choosing the trajectory of a regulated antitrust remedy long term over the trajectory of a break-up remedy.
6. The narrow market definition is good news for those privately suing Google for antitrust violations.
7. The Google-ITA "firewall" will prove very difficult for the DOJ to police effectively.
8. The complaint mechanism is important.

Why is there a selective political fixation on AT&T-T-Mobile's ~43% combined market share when so many related markets are dramatically more concentrated, less competitive, or even monopolized?

• This blatant competition double standard originates from the political agenda of the FreePress/Silicon Valley net neutrality regulatory complex that seeks a broadband industrial policy -- to create an information commons and generate tens of billions of dollars in implicit bandwidth subsidies for Silicon Valley special interests.

When the FCC does the "data-driven analysis" that it claims to value, it will discover a blatant competition double standard where broadband critics gerrymander and torture broadband market share statistics to raise the specter of a broadband "opoly" -- to justify broadband regulation.

• It is telling that opponents have to bring Verizon, which has nothing to do with the AT&T-T-Mobile transaction, into the equation in order to manufacture market shares of concern.
• The outrageous and unsubstantiated implication of opponents' "Ma Bell duopoly" narrative here is that broadband competitors will anti-competitively collude, when all the evidence is that Verizon, AT&T, Sprint, Metro PCS, Leap Wireless and others compete fiercely and relentlessly in multiple dimensions: price, value, device choice, quality, technology, plans, and innovation.