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No due diligence for Frontline Wireless? Special favors for special interests?

Congrats to Jeff Eisenach of Criterion Economics for his outstanding and incisive analysis "Due Diligence: Risk Factors in the Frontline Proposal."

  • Jeff Eisenach wonderfully brings clear thinking and common sense to a topic that sorely needs it.

The analysis exposes the Google-supported Frontline Wireless proposal for what it is... a "trust us" investment of effectively billions of dollars in forgone receipts due to the American taxpayer in a free market auction.

A concise summary of the excellent FTC report on Net Neutrality

I strongly recommend the FTC staff report on "Broadband Connectivity Competition Policy" to anyone wanting an objective, well-reasoned, fair, and comprehensive review of the facts and evidence of the net neutrality regulation debate.

I believe the most important sentence in the whole 170 page staff report, which covered an enormous and comprehensive public record on the subject, was on page 11 and again on page 160:

  •  "To date we are unaware of any siginificant market failure or demonstrated consumer harm from conduct by broadband providers." [Bold emphasis added]
  • I believe that's the best bottomline summary conclusion of the report.

The FTC report can be further well summarized by the following four sentences found on pages 10, 11, 155 and 11 respectively:

  • "We recommend policymakers proceed with caution in evaluating proposals to enact regulations in the area of broadband Internet access."
  • "Policymakers also should carefully consider the potentially adverse and unintended effects of regulation in the area of broadband Internet accesss before enacting any such regulation."
  • "Over time, competition produces the best results for consumers, providing them the lowest prices, the highest quality products and services, and the most choice."
  • "The FTC will continue to devote substantial resources to maintaining competition and protecting consumers in the area of broadband Internet access, using a variety of tools."

In closing, I was very impressed with the FTC staff's knowledge, sophistication, and fair representation of both sides' views.

"Earmarked Airwaves" -- a 700 MHz auction "UNE-P" deja vu?

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.

  • While no process is perfect, a clean competitive auction process has proven highly effective in rewarding US taxpayers and fostering a growing and highly competitive wireless marketplace that greatly benefits consumers.

This 700 MHz auction may be shaping up to be FCC Chairman Kevin Martin's legacy moment: will it be marked by promoting competition and market-based outcomes or will it be marked by standing on the auction scales to ensure the spectrum is "earmarked" to the predetermined, chosen "winner" -- in this case former Clinton-Gore FCC Chairman Reed Hundt's Frontline Wireless company.  

Fabricating a broadband problem to justify more regulation/taxation/spending

Net neutrality proponents continue to fabricate problems to manipulate public policy to promote government intervention and regulation over free markets.

Fortunately net neutrality proponents have failed miserably in their efforts to date. 

More eBay Doublespeak on net neutrality

While I was very glad to hear that eBay continues to support extending the Internet Tax Moratorium, which expires in November, I found eBay's Brian Bieron's rationale for it very hypocritical given their stance on net neutrality.

National Journal's Tech Daily yesterday  reported that:

  • eBay's "Bieron said he thinks the Internet has been working well and it would be a mistake to change any of the underpinnings to how it currently operates."

Hello eBay?

  • If "the Internet has been working well" why propose to hyper-regulate it with new net neutrality legislation for the first time?
  • If "it would be a mistake to change any of the underpinnings to how it currently operates", why don't you think new net neutrality regulation would not change the underpinnings of how the Internet operates -- from free market to government "managed competition"?
    • I can anticipate your standard response, which is still bogus -- that the Internet has always been neutral and new legislation would just maintain the status quo.

Bottomline:  Net neutrality proponents cannot win on the merits and the facts of the issue, so they must systematically fabricate a problem, and misrepresent the context of the legislation as status quo.

Maine's Net neutrality whimper; bogus issue gets the "study" treatment

Maine's Governor signed Maine's non-binding resolution on net neutrality today calling for a "study" of the issue due next year and also stated that net neutrality is a Federal issue, not a state issue, due to the interstate nature of the Internet.

Nevertheless, I am sure the net neutrality movement will try and make a proverbial silk purse out of this sow's ear.

If they continue spinning the media like they have this past couple of weeks, they will continue to badly misrepresent what Maine actually did.

  • Misrepresentation and bogus claims is the standard MO of the net neutrality movement.
  • They manufactured an issue in net neutrality, basically by fabricating a problem that does not exist, and then hammering bogus allegations.
    • Like "chicken little" they scream that the Internet is in grave danger and will fall out of the sky, but they can provide no evidence of a real problem. And the sky clearly has not fallen.
    • When confronted with this evidence, they trump up another bogus claim, saying that if they were not making it an issue there would be a net neutrality problem.

Net neutrality is a bogus issue. I fully expect the net neutrality movement to make the bogus claim that they won in Maine when truth be told the Snowe-Dorgan-like bill they asked for went nowhere.

  • Folks that will manufacture a bogus issue have no problem claiming a bogus victory.

How net filtering is ok for misdemeanors, but not for felonies?

I have been watching with some amusement all of the SaveTheInternet-launched blogilantes ranting about the prospect of Internet backbone networks like AT&T or others, becoming a filtering technology solution to Hollywood's problem of rampant content piracy on the Internet.

Why am I amused?

  • Because net neutrality proponents are so predictably knee jerk in their reaction to anything that they see as a threat to their datatopian ideal of a net free of any broadband competition, differentiation or diversity of choice.
  • Net neutrality proponents have such a bad case of "myneutralopia" that they can't see the proverbial forest for the trees.
    • Over the last year, net neutrality proponents have had to make an increasing number of big concessions about what "bit discrimination" is acceptable in order to remain credible on Capitol Hill.
    • They have had to concede and support network management "discrimination" of bits:
      • To filter out viruses, filtering which is essential to protect the Internet and users from Net blackouts or shutdowns;
      • To filter out illegal spam, so the Internet and email remains unclogged and useful; and
      • To allow for law enforcement under CALEA, the ability to surveil criminal and terrorist activity on the Internet.
    • If all that network managment "discrimination of bits" is OK,
      • Then why isn't it OK for these same network managers to filter traffic for pirated content, i.e. trafficking in stolen goods?
    • In other words, if it is OK to filter the Internet for the misdemeanors and felonies of spreading viruses and spam, and it is longstanding law for the Goverment to be able to surveil the Internet to detect criminal behavior, how is new network filtering for illegal pirated content any different or any less necessary?

Once again, the net neutrality crowd's kneejerk reaction is to side with lawbreakers rather than with every day citizens and users of the Internet who are all ultimately harmed by allowing Internet-enabled crimes to go undetected and unnpunished.

Why protect the Webopolies with net neutrality corporate welfare?

The New York Times reported a very telling statistic today on one of the prominent Webopolies in the Open Internet Coalition -- eBay.

95% market share! If that's not a Webopoly, what is?

Despite puffery over 700 MHz "3rd pipe" -- the market is solving it

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.

WSJ lead article highlights tradeoff of competition vs regulation

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.

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Q&A One Pager Debunking Net Neutrality Myths