Wireless Spectrum

Kudos to Tom Hazlett and Vernon Smith for a cogent free market stance against Google's attempt to communalize the airwaves for Google's benefit -- in a great Op Ed in the Wall Street Journal today.

The authors are dead right to challenge Google's "free the airwaves" campaign on spectrum.  Google does not use the word "free" the way most people use it. When they say "free the airwaves," Google is saying, like it does in its push for net neutrality and open access, that it seeks to turn the airwaves in to a public commons where spectrum is communalized, not owned or licensed, available to anyone at no cost to use.

Brian Deagon of Investor's Business Daily interviewed me on Google and its leadership role in the lobbying for free use of the White Spaces spectrum.

• The Q&A is entitled: "Google Big Beneficiary of its 'Open' Lobbying"

Importantly, I explain that Google's definition of 'open' is very different from the traditional definition of 'open.'

• Google's definition of 'open' is "communal, meaning not privately owned, communal with no restriction, no permission required."

Tim Wu's "OPEC 2.0" Op ed in the New York Times employs an embarrassingly inane analogy/metaphor. It also happens to be a factually bankrupt piece.  

Why is Professor Wu's political analogy comparing bandwidth to energy, and a "bandwidth cartel" to OPEC -- embarrassingly inane?

• The vast majority of people understand that the price of gas has increased dramatically in part because the U.S. government has severely restricted supply by banning a variety of energy supply alternatives.
• The vast majority of people also understand that the price of bandwidth usage continues to plummet in large part because the U.S. Government has NOT restricted supply; on the contrary, it has encouraged free market competition, broadband investment and innovation that in turn -- has spurred vastly more supply of bandwidth.

In his op ed Professor Wu said:  "In an information economy, the supply and price of bandwidth matters, in the way that oil prices matter: not just for gas stations, but for the whole economy."

I wanted to follow up and build upon my post of last week: "The logic of Internet Pricing Diversity and the Fantasy of free limitless bandwidth."

•  I keep hearing this backward-looking refrain from net neutrality proponents that because some people characterize dial-up and early broadband bandwidth as unlimited or as an all-you-can-eat usage model -- that that model should never evolve or change.
  • Balderdash! This is some people's wishes being presented as analysis.

I believe U.S. Internet access consumers have come to understand at least two truths: 

I had to chuckle when I saw the headline: "Google CEO: Get Ready for Cellphone Ads" on the US News and World Report Blog.

• Google can't help but salivate over how valuable "targeted" ads could be on the most personal of devices -- the cell phone.

While Google's standard line is that Google is all about the "user" -- stories like this shed light on the truth -- it's really all about Google.

Google's self-centered, megalomaniacal mission to organize the world's information to be accessible and useful to Google -- blind Google to the very different privacy reality of the cellphone world:

Net neutrality proponents who argue broadband competition doesn't work and see a "duopoly" in every shadow, were confronted with powerful market evidence recently that their take on the broadband competitive facts is flat wrong. 

The big Wimax consortium announcement this week by Clearwire, Sprint, Google, Intel, Comcast, Time Warner Cable and Bright House, is obvious evidence that:

• National broadband competition and consumer choice continues to increase; and
• Congress' and the FCC's rejection of net neutrality legislation and regulation encourages investment in broadband deployment to all Americans most quickly.

This free-market, innovative business model development, which Google has embraced with a $500m investment, takes even more wind out of the sails of the net neutrality movement.

The more we learn about Google's behavior in the FCC's 700 Mhz auction the more clear it is Google acted improperly and "gamed" the auction and Fleeced the American taxpayer as I explained in my original post on this subject.

The Hill has a good article highlighting the growing "battle" over "White Spaces", or the potential for use of the buffer spectrum bands in-between TV channels to ensure that there is no interference with TV signals.

I want to thank Mike Masnick for his good comment to my blog post. This post is part of a string responding to Mr. Masnick's criticism of my original blog post entitled: "Google unabashed about gaming FCC auction process to fleece the American taxpayer of $7 billion."

I accept his gracious apology for starting his original critique with an ad hominem attack and I in turn want to apologize to Mr. Masnick for incorrectly assuming that he was on Google's side when he says he has no side -- I take him at his word.

Martin Geddes of Circle ID challenged my estimation methodology in reaching that Google fleeced the American taxpayer for $7 billion.  

With all due respect to Mr. Geddes, first his analogy of taking "a tasty apple, a yummy banana and a mouldy pear, is simply not analogous here. One doesn't pay $4.7b for a "mouldy pear." The regulations did not make the spectrum itself bad to eat, but simply restricted the use of the spectrum or in Mr. Geddes example how someone would be allowed to eat a good pear. People will pay less for a fruit if they are restricted on when and how they can eat it. 

Second, Mr. Geddes suggests I am confusing the American taxpayer with the American public. I most certainly am not. I am recognizing that there is a very specific law, the 1993 Budget Act, which effectively defines that the American public is the American taxpayer because the purpose of these spectrum auctions are to reduce budget deficits. One may not agree with how the law defines the American public in this instance, but that opinion doesn't change that it is the operative law here.