Arguments for Bidder Exclusion Rules Remain Weak and Inconsistent…

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Last week, the Phoenix Center released my Perspective entitled Will Bidder Exclusions Increase Auction Revenue?  A Review of the Arguments, which assessed the arguments being made about the revenue consequences of excluding AT&T and Verizon from the upcoming broadcast spectrum incentive auction.  While a number of parties have claimed that such exclusions can enhance auction revenues, I show in my Perspective that the economic theories they rely upon do not support the claim.  In fairness, Sprint, T-Mobile, and others are quick to note that they are not proposing to exclude the two most successful carriers completely, but rather are proposing Continue Reading »

FCC Rules Block Broadband Price Cuts…

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Six years ago, the Phoenix Center released (and later published) a paper entitled Network Neutrality and Foreclosing Market Exchange: A Transaction Cost Analysis.  In that paper, we analyzed the effects of network neutrality proposals that foreclose or severely limit market transactions between content providers and broadband service providers.  Our model revealed that under plausible conditions, rules that prohibit efficient commercial transactions between content and broadband service providers could, in fact, be bad for all participants: consumers would pay higher prices, the profits of the broadband service provider would decline, and the sales of Internet content providers would also decline.  As Continue Reading »

It’s Time for FCC/DOJ Inter-Agency Cooperation to Come into the Sunlight…

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Over the past several years, there have been numerous efforts to improve the practices and procedures used at the Federal Commissions Commission.  However, of all of the potential improvements bandied about, I submit that there is one improvement that has been entirely overlooked and needs immediately implementation:  that is, the repeal of Section § 1.1204(6) of the FCC’s ex parte rules, which provides that the Commission and the Department of Justice (“DOJ”) can meet in secret as often as they like—without having to file anything into the record about the date of the meeting, who attended the meeting and what Continue Reading »

Will the FCC Exclude Bidders from the Upcoming Voluntary Incentive Auction?

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Last year, when Congress was debating the voluntary incentive auction provisions of the Middle Class Tax Relief and Jobs Creation Act, many argued—including FCC outgoing Chairman Julius Genachowski—that the Commission should have the authority to adopt auction participation rules so that it could prevent an “excessive concentration of licenses” under Section 309(j)(3)(B) of the Communications Act.  While Congress did not include any specific auction participation rules in the Middle Class Tax Relief and Jobs Creation Act, Section 6404 of the new legislation states that “Nothing … affects any authority the Commission has to adopt and enforce rules of general applicability, Continue Reading »

Spectrum Exhaust and the Monopolization Narrative…

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In a recent speech, outgoing FCC Chairman Julius Genachowski once again reiterated the critical importance of spectrum policy “breakthroughs” to address the “tremendous stress” on the capacity of the nation’s wireless networks “from growing digital demand.”  While Congress and regulators are doing what they can, including addressing tower siting (here and here), reallocating and sharing government spectrum (here and here), and moving forward with the voluntary incentive auctions for broadcast spectrum, these actions represent only partial (and possibly untimely) solutions to spectrum exhaust.  Addressing the problem in the near term will require secondary market transactions for spectrum, where spectrum is Continue Reading »

The Sixteenth CMRS Competition Report: A Paralysis Born in Humility

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Each year, Section 331(c)(1)(C) of the Communications Act directs the Federal Communications Commission (FCC) to “review competitive market conditions with respect to commercial mobile services and shall include in its annual report an analysis of those conditions.”  To this end, the agency released its Sixteenth Annual CMRS Report last week.  In this latest report, the FCC makes few formal findings, but instead “focuses on presenting the best data available on competition throughout this sector of the economy and highlighting several key trends in the mobile wireless industry.”  (Sixteenth Report at ¶ 2.)  Consistent with the other CMRS Reports issued under Continue Reading »

New America Foundation Misinterprets International Data (Again)…

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In a recent report entitled The Cost of Connectivity, the New America Foundation (“New America”) attempts to compare the prices of “triple play” offerings of video, phone, and Internet services across 22 cities worldwide to show that “that U.S. consumers in major cities tend to pay higher prices for slower speeds compared to consumers abroad.”  Unfortunately, when it comes to measuring and comparing prices, New America has a demonstrated penchant for careless work.  Upon inspection, New America’s new study appears to be unexceptional in that regard—the empirics are sloppy and the conclusions are unsupported.  In fact, New America presents evidence Continue Reading »

Copyright and Wireless Carterfone (Part Deux)…

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Last month, I authored a blog discussing the Librarian of Congress’s recent decision not to exempt handset unlocking of new phones from the anti-circumvention petitions of the Digital Millennium Copyright Act (“DMCA”).  Since that blog was posted, copyright-reform activists launched an on-line campaign to have the White House “ask the Librarian of Congress to rescind this decision, and failing that, champion a bill that makes unlocking permanently legal.”  Last week, in a post by R. David Edelman, Senior Advisor for Internet, Innovation Policy, entitled It’s Time to Legalize Cell Phone Unlocking, the White House joined in the dispute stating: The Continue Reading »

Is there a “Silver Lining” of Sequestration?

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Friday, absent Congressional and Presidential action, the Budget Control Act’s Sequester kicks in, forcing across-the-board spending cuts of $1.1 trillion spread out over nine years, with $85 billion cuts coming in 2013.  Without question, this reduction in federal spending will impact the economy, particularly as we measure it.  Government spending is a component of aggregate demand, and reduced demand in the economy will have its consequences.  Also, government spending is a component of Gross Domestic Product (about 23% of it), and since recessions are indicated (in part) by declining GDP, a cut in federal spending increases the probability of an Continue Reading »

The FCC Contradicts Their Facts (Again) To Justify Expanded Broadband Regulation…

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Last year, we released a paper entitled Justifying the Ends:  Section 706 and the Regulation of Broadband (and forthcoming, Journal of Internet Law) where we demonstrated how the Federal Communications Commission deliberately ignored its own evidence to support expanded regulatory jurisdiction over IP-based services.  With the release of its new Measuring Broadband America Report last week, the FCC once again undermines its factual predicate for Internet regulation.  Let me explain. Over the last several years, we have seen the Federal Communications Commission put forth a rather clever argument to expand its regulatory authority over broadband services.  Under Section 706(a) of Continue Reading »