Professor Susan Crawford and the Looming “Cable Monopoly”…

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Next month, a new book entitled Captive Audience:  The Telecom Industry and Monopoly Power in the New Gilded Age (Yale University Press 2012) from Cardozo Law School Professor Susan Crawford will hit the bookshelves.  According to her publisher’s blurb, Professor Crawford’s book will examine how the United States has “created the biggest monopoly since the breakup of Standard Oil a century ago.”  But what is this “monopoly” to which Professor Crawford refers?  While the publisher’s promotional blurb is silent on this question, according to a 2010 paper authored by Professor Crawford in the Yale Law and Policy Review, it appears Continue Reading »

Stepping Out of the Pack: Broadband Investment and Private Sector Job Creation…

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Although the National Bureau of Economic Research tells us that the recession ended in July 2009, the U.S. economy nonetheless remains in a period of sluggish and uncertain growth.  Consumer confidence remains low, and, with a pending “fiscal cliff,” the “Recession Probability Index” jumped from about 2 to nearly 20 in August.  Unemployment remains exceptionally high.  As we discussed in our paper Can Government Spending Get America Working Again? An Empirical Investigation, the government’s effort to jump start the economy with spending has failed (and will continue to do so), and recovery is likely to depend on the expansion of Continue Reading »

It’s Time to Start the Conversation on the IP Transition…

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Every now and then, a genuine and radical change occurs in the telecommunications business that can no longer be ignored and, as such, a policy response can no longer be postponed.  In the past, these cycles have been relatively long, but today significant supply-side and demand-side shocks seem common.  Such is the case of the need to develop a cohesive regulatory paradigm to manage the complicated issue of facilitating the transition from legacy TDM networks to the more efficient IP-based networks. For those of us who study telecom policy closely, the need for the Federal Communications Commission to start to Continue Reading »

George and Larry’s Excellent Peruvian Broadband Adventure…

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Last week, George and I returned from an amazing trip to Peru where we held two days of workshops with OSIPTEL—the Peruvian telecoms regulator—as part of a project for USAID.  As we covered a wide range of topics, we were once again reminded that while language and individual political nuances among various countries may differ, the fundamental economics—and concurrent complex policy issues—facing telecom regulators remain universal.  That is, how do we get more broadband deployed when it isn’t necessarily profitable to do so? In light of this universal question, we spent a significant amount of time talking about the economics Continue Reading »

Why the FCC Should Not “Tax” Efforts to Repurpose Spectrum…

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The mobile revolution is threatened today by the lack of sufficient commercial spectrum to satiate America’s ever-increasing appetite for wireless devices.  While efforts are underway to hold voluntary incentive auctions for broadcast spectrum and to free-up unused or underutilized government spectrum, most agree that these initiatives are years away from putting spectrum in the hands of commercial users and will be insufficient standing alone to resolve spectrum exhaust even if fully successful.  As a result, the spectrum community is now exploring ways to repurpose spectrum from lower- to higher-valued uses to satisfy the growing demand.  For example, we have recently Continue Reading »

The Curious Case of the FCC’s Spectrum Screen NPRM…

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With the ever-present specter of spectrum exhaust hanging over the wireless industry, policymakers are constantly faced with the corresponding question of how to allocate spectrum among competing providers to ensure that market does not devolve into one with “excessive” concentration under Section 309(j)(3)(B) of the Communications Act.  Since the 1990’s, the FCC has tried a variety of approaches—from outright spectrum caps to the current and more flexible case-by-case “spectrum screen”—to try to manage its statutory charge.  As to be expected given the huge stakes at hand, stakeholders vehemently disagree as to the best approach moving forward (particularly with the new Continue Reading »

The FCC’s Special Access Fiasco: No Data and Wrong Policy Question…

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Late Wednesday night, the Federal Communications Commission released a Report and Order that would suspend, on an “interim” basis, its rules for automatic grants of pricing flexibility for special access services “in light of significant evidence” that the current deregulatory trigger—i.e., two competitors have collocated in a single Metropolitan Statistical Area (“MSA”)—is “not working as predicted.”  In particular, the Commission found that the geographic territories contained in most MSAs are “overly broad” and, in contrast, most competitive entry is occurring only in areas with “extremely concentrated demand.”  Although the Commission concedes that it “currently lack[s] the necessary data to identify Continue Reading »

How the FCC “Rigs the Game” for Broadband Regulation Under Section 706…

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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.  The argument goes basically like this:  Under Section 706(a) of the Communications Act, the Commission “shall encourage the deployment on a reasonable and timely basis of advanced telecommunications capability to all Americans … by utilizing … price cap regulation, regulatory forbearance, measures that promote competition in the local telecommunications market, or other regulating methods that remove barriers to infrastructure investment.”  As part of its mandate, Section 706(b) requires the Commission to conduct a regular Continue Reading »

Susan Crawford and the Economics of the Wireless Industry…

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Last week, Professor Susan Crawford authored an op-ed entitled What’s Good for Verizon and AT&T Is Terrible for American Consumers.  While Professor Crawford’s emotional argument is a bit scattered, her depiction of an industry in transition provides a useful foundation for discussing the future of broadband in the United States. First, Professor Crawford argues that wireless broadband is a “commodity,” and one that consumers are increasingly using as a substitute for traditional “voice” and “texting” services.  This substitution is arguably true and, as such, we should therefore expect to see broadband providers increasingly employing and experimenting with a variety of Continue Reading »

Art Laffer and the Effect of Government Stimulus on Jobs and Investment…

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This week, noted economist Arthur Laffer wrote an interesting piece in the Wall Street Journal entitled The Real “Stimulus” Record.  In this piece, Dr. Laffer argues that before policymakers in Washington again try yet another round of stimulus spending in an ostensible attempt to mitigate high unemployment and poor growth rates, they should remember that President Obama’s first stimulus package did not exactly meet with great success.  As support for his argument, Dr. Laffer cites the facts that while stimulus spending over the past five years totaled more than $4 trillion, increasing  U.S. Federal government spending from 21.4% to 27.3% Continue Reading »