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 a result, such proposals would …
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FCC Rules Block Broadband Price Cuts…
May 13th, 2013 | Posted by in Federal Communications Commission | Law and Economics | Net Neutrality | Regulation | Wireless - (0 Comments)It’s Time for FCC/DOJ Inter-Agency Cooperation to Come into the Sunlight…
May 2nd, 2013 | Posted by in Antitrust | Department of Justice | Due Process | FCC Reform | Federal Communications Commission | Merger Review | Spectrum Screen - (Comments Off)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 was discussed—just so long as …
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Will the FCC Exclude Bidders from the Upcoming Voluntary Incentive Auction?
April 4th, 2013 | Posted by in Federal Communications Commission | Incentive Auctions | Incumbent Exclusion Rules | Spectrum | Spectrum Caps | Spectrum Exhaust | Spectrum Screen | Wireless - (Comments Off)
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 te 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, including rules concerning spectrum aggregation …
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Spectrum Exhaust and the Monopolization Narrative…
April 3rd, 2013 | Posted by in Federal Communications Commission | Incumbent Exclusion Rules | Industry Structure and Market Performance | Merger Review | Mobile Broadband | Spectrum Caps | Spectrum Exhaust | Spectrum Screen | Wireless - (Comments Off)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 reassigned from lower to higher …
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The Sixteenth CMRS Competition Report: A Paralysis Born in Humility
March 25th, 2013 | Posted by in Broadband | CMRS Reports | Federal Communications Commission | Law and Economics | Mobile Broadband | Regulation | Spectrum | Wireless - (3 Comments)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 Chairman Julius Genachowski’s watch, the …
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New America Foundation Misinterprets International Data (Again)…
March 7th, 2013 | Posted by in Broadband | Industry Structure and Market Performance | International | International Broadband Ranks | International Telecommunication Union (ITU) | OECD - (Comments Off)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 which force conclusions that directly …
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Copyright and Wireless Carterfone (Part Deux)…
March 7th, 2013 | Posted by in Copyright | Federal Communications Commission | Handset Exclusivity | Industry Structure and Market Performance | Intellectual Property | Interoperability | Law and Economics | Mobile Broadband | Wireless - (Comments Off)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 White House agrees … that …
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Is there a “Silver Lining” of Sequestration?
February 28th, 2013 | Posted by in "Cost Per Regulator" | Sequestration - (1 Comments)
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 indicated recession by the simple …
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The FCC Contradicts Their Facts (Again) To Justify Expanded Broadband Regulation…
February 20th, 2013 | Posted by in Federal Communications Commission | IP Transition | Law and Economics | National Broadband Plan | Net Neutrality | Regulation | Section 706 - (1 Comments)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 the Communications Act, the Commission …
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The Misuse of International Broadband Rankings Continues…
February 19th, 2013 | Posted by in Broadband | Federal Communications Commission | International Broadband Ranks | International Telecommunication Union (ITU) | OECD | Regulation | Susan Crawford - (Comments Off)According to a just-released report by the Information Technology & Innovation Foundation (ITIF) entitled The Whole Picture: Where America’s Broadband Networks Really Stand, “Despite the frequent claims that the United States lags in international broadband comparisons, the studies cited to support this claim are out-of-date, poorly-focused, and/or analytically deficient.” We couldn’t agree more, and extend our kudos to Richard Bennett, Luke Steward, and Rob Atkinson for a thorough and dispassionate analysis of broadband deployment and adoption across developed economies. Indeed, I suspect ITIF’s report will become the ”go to” document of the most current basic statistics on where the U.S. falls in international broadband comparisons. …
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