Competition

The Senate Judiciary Subcommittee hearing on the proposed Verizon-Cable spectrum sale flushed out the opposition's best arguments and evidence and they proved surprisingly weak and sparse.

Behind the façade of FreePress' trademark bumper-sticker bluster of "a competition crisis," "a creeping duopoly," and "spectrum warehousing," there was very little substance to back up their pejorative assertions.

FreePress' bogus duopoly deception is the core weakness of the opposition to this commercial agreement. To believe there is a Verizon-AT&T wireless duopoly, one has to:

Hopefully, the March 21^st Senate Judiciary Subcommittee oversight hearing on the Verizon-Cable spectrum transaction will be a fair hearing based on the competitive facts and the law, and is not allowed to be hijacked politically by FreePress' signature gamesmanship.

I. FreePress Fiction

It is disturbing that two of the three hearing witnesses opposing the Verizon-Cable agreement are from FreePress: Joel Kelsey, FreePress' Policy Advisor and Tim Wu, who was FreePress' Chairman just thirteen months ago and has been a longtime FreePress board member.

It is curious and troubling that the Senate Subcommittee specializing in "competition policy" would seek testimony from two anti-profit, anti-property-rights adherents who don't believe competition policy can work.

The March 21^st Senate Judiciary Subcommittee hearing reviewing the Verizon-cable agreements provides Congress with an opportunity to learn:

• How the metamorphosis of communications competition is increasing competition;
• How the Government has created artificial and temporary spectrum scarcity in failing to free up more spectrum for broadband use in a timely fashion; and
• How unfair, arbitrary and capricious the FCC review process has become in reviewing market transactions.

Given that the DOJ has such weak grounds and facts under antitrust law to challenge the Verizon-cable commercial agreements, and given that the spectrum transfer is in the public interest in multiple dimensions, opponents appear to be pushing the FCC to do whatever necessary to try and block Verizon-cable under the FCC's make-it-up-as-they-go-along public interest standard.

Mobile technology advances are dramatically increasing the intensity of competition broadly online and offline. The technological convenience of using a smart phone, tablet etc. rather than a card or cash to pay for goods and services, wherever one may be, is igniting a competitive free-for-all.

• That's because the technological shift to devices rather than cards creates a huge potential competitive opportunity for most everyone in the competitive ecosystem to potentially disintermediate other industries -- i.e. Wrest control of the customer relationship, customers' private information, interests and metadata, and also the bundling of marketing coupons and promotions, in markets with transactions in the trillions of dollars annually.

Activists and regulators who fear a potential new communications "opoly" lurking around every corner -- in need of preemptive government intervention to protect consumers from the convenience, savings and benefits of a highly-competitive marketplace -- need to take a breath, enjoy, and get out of the way of this amazing technological convergence and innovation over mobile payments.

Activist carping about the commercial Internet being commercial is revving up again, this time with the carping focused on framing new broadband usage-pricing innovations by Time Warner Cable and AT&T, as somehow a violation of the "open web."

To cut to the quick and translate what is really going on politically here, this activist carping is the latest attempt to revive and re-fight the manufactured net neutrality debate between:

The evidence below shows the Verizon-Cable agreement is clearly in the public interest, if the FCC fairly reviews the agreement and all of the relevant facts, in the full context of the highly competitive wireless ecosystem.

Top Reasons Why Verizon-Cable Agreement is in the Public Interest

Increases competition: The agreement increases competition because it enables:

Reports that the Senate Antitrust Subcommittee will hold a hearing on the Verizon Wireless-Cable agreement spotlights an old truism: What one looks for, one sees. What the Government ultimately sees here largely will depend on whether the Government looks backward through an analog competitive lens or looks forward through an Internet competitive convergence lens. In a nutshell, if they look backwards with 1996 cable-telco Silo-Vision lenses, they will see an agreement not predicted in 1996; however if they look forward with 2012 Internet-Vision lenses that see 4G LTE wireless, iPhones/Android, VoIP, DBS, video streaming, Netflix, cable modems, DSL, FIOS, Skype voice/video file-sharing, cloud-computing etc. – they will see an agreement that is not at all surprising or problematic given the competitive context of today and the future.

At CES, the FCC signaled that it opposed any effort by Congress to give the FCC policy direction or to establish any checks and balances on the FCC in authorizing incentive auctions of prime TV broadcast spectrum.

See my Forbes Tech Capitalist post "FCC Seeks Unbounded Spectrum Auction Authority" to see why the the FCC's lack of regulatory humility here is so stunning.

Google’s recent ~$1b 3-year deal with Mozilla for Google to be the default search provider for hundreds of millions of Firefox browser users, which comprise over a quarter of the global browser/search market, has much broader and more serious antitrust implications for Google’s already very tenuous antitrust situation than most everyone appreciates.

• Please see my Forbes Tech Capitalist post here to learn why the "Google-Firefox Search deal is Antitrust Red Meat."