MySpace

There was a major tectonic shift in the Internet privacy debate today at the Senate Commerce Committee hearing on Internet privacy. 

A new article/study by Harvard Business School Professor Anita Elberse challenges the validity of the Silicon Valley mantra/theory that the Internet created a new "long tail" of demand for niche products that would ultimately undermine and overwhelm the offline trend towards "big hits."  

New evidence exposes that Google has much more serious financial conflicts of interest and is much less of an "honest broker" of online advertising than most appreciate. 

Cesar Conda wrote a great editorial highlighting the "Broadband Triple Threat" National Review Online.

• Its an informative read and dead on.

Kudos to Robert Hahn and Hal Singer for their outstanding op ed in the Washington Post "Earmarked Airwaves."

• The editorial cogently presents the fork in the road that faces any major FCC decision: to follow law, which promotes competition and market-driven outcomes, or to freelance and try and "manage" competition and pick winners and losers in advance through "spectrum earmarking."
• FCC history is littered with freelance "managed competition" failures, but two are particularly ignominious and highly relevant to this 700 MHz auction:
• the illegal UNE-P scheme to rig telecom competitive outcomes following the 1996 Telecom Act; and
• the Nextwave auction scandal that kept 30 MHz of prime spectrum fallow and tied up in court for almost a decade.

At its core a spectrum auction is the quintessential type of competition. The auction law's purpose in 1993 was to use market forces, competition, to allocate the public's asset most appropriately, largely because previous FCC spectrum allocation processes were so ineffective, unfair and prone to serious abuse and graft.

Thank you Tech Daily for flagging a silly blog by MyDD calling for an organizing an "online workers union... to look out for the political interests of online workers. These interests include net neutrality, intellectual property law like DMCA..."

You can see me shaking my head in disbelief now... an online workers union for net neutrality...

Let me highlight just a few of the silly aspects of this idea.

First, organizing bloggers into a union to promote net neutrality?

• Duh! It already exists! 
• The "online workers union" is called Moveon.org and it already has 3 million members, all they have to do is change from political donations and require mandatory union dues.  
• The MoveOn/FreePress folks already operate as de facto union bosses of the net neutrality movement.
• And by the way doesn't MyDD know that the Consumers "Union" already supports net neutrality regulation?

Second, social media technology already allows onliners to organize around what ever idea they want whenever they want. Its a free country and a free and open Internet. Why not create: 

I was surprised in yesterday's news splashes on the potential swap of MySpace to Yahoo for roughly a quarter of Yahoo.

I am blogging on this because the news follow-up does not appear to have connected the dots about how bizarre this combination sounds economically and competitively.

While on the surface it seems logical because Yahoo was reportedly in talks to buy MySpace before NewsCorp did.

What makes this bizarre is what has transpired since.

• NewsCorp took the no revenue MySpace exploding growth audience and did a deal with Google which guaranteed MySpace a minimum of $900m in ad revenue over four years.

You gotta love how the free market works when left alone by the Government!

Just as Frontline and others are demanding that the government has to intervene in the 700 MHz auction to "create" a third broadband pipe, the free market finds another way to solve these market problems without the Government.

One of the most significant developments in the spectrum world today was not the hot air at the Senate Commerce Committee hearing, but what happened in the free market -- DirecTV and Echostar signing agreements with Clearwire to sell their WiMax broadband service.

The cover story in the Wall Street Journal today "A fight over what you  can do with your cellphone; Handset makers push free features for which carriers pay for" was obviously perfectly-timed and placed by open access/net neutrality proponents trying to influence the Senate Commerce Committee hearing today on the FCC's 700 MHz auction.

• The article offers a list of complaints for net neutrality supportive Senators to browbeat competitive wireless carriers with.

What the article ignores is the broader and essential context of this issue and debate.

FCC Commissioner Robert McDowell gave an outstanding speech today at the Broadband Policy Summit in which he did the single best job I have seen totally debunking the OECD rankings that purportedly indicate the US is falling behind on broadband.

Commissioner McDowell explains with example after example -- how skewed the OECD methodology is.

• My personal favorite line in the speech was on how the OECD methodology is skewed against the US:

• "...even if every existing broadband subscriber in America had a fiber-fed 100 mbps broadband connection, we would only rank 12th."