What is the Effect of Regulation on Investment?

May 8th, 2012 | Posted by George Ford in "Over the Top" Services | AllVid | Broadband Credibility Gap | Data Roaming | Employment | Federal Communications Commission | Industry Structure and Market Performance | Interoperability | Jobs | Law and Economics | Net Neutrality | Regulation | Regulatory Reform | Set-top Boxes | Spectrum | Spectrum Caps | Wireless - (0 Comments)

What is the effect of regulation on investment?  At a high level of abstraction, it is impossible to say.  Rate-of-return regulation, for example, is criticized by economists for possibly encouraging too much investment—a principle known as the Averch-Johnson Effect.  On the other hand, if a firm fears that the regulator will alter the rules in a way that reduces the ability to earn profits on large, long-term capital investments, then the incentive to make such investments is reduced.  Importantly, the issue is not, as some claim, just about “regulatory uncertainty.”  There could be great uncertainty about future rule changes, but if the expectation is that … Read more →

Does Political “Kabuki Theater” Help or Hurt the Regulatory Review Process?

May 8th, 2012 | Posted by Larry Spiwak in Congressional Oversight | Federal Communications Commission | Law and Economics | Legislative Branch | Merger Review | Mobile Broadband | Regulation | Spectrum | Spectrum Caps | Spectrum Exhaust | Wireless - (0 Comments)

Recently, The Hill reported that Representatives Henry Waxman and Anna Eshoo—the ranking members of the House Energy and Commerce Committee and its Subcommittee on Communications and Technology, respectively—wrote a letter to Committee Chairman Fred Upton calling for a hearing to examine the proposed sale of wireless spectrum to Verizon by a consortium of cable companies.  Without question, Congress has the authority to hold a hearing on anything they deem relevant at any time they want.  That said, and with all due respect to the powers of the legislative branch, it is unclear what a politically-charged hearing would contribute at this late stage of the review … Read more →

A Response to Steven Crowley at GigaOm…

March 29th, 2012 | Posted by George Ford in Federal Communications Commission | Incumbent Exclusion Rules | Industry Structure and Market Performance | Mobile Broadband | Regulation | Spectrum | Spectrum Caps | Spectrum Exhaust | Wireless - (Comments Off)

This past February, we released a paper entitled Wireless Competition After Spectrum Exhaust.  As far as we can tell, this paper was the first serious attempt to model the effect of spectrum exhaust on mobile wireless competition.  We found that the addition of a binding capacity constraint (i.e., spectrum exhaust) to the standard Cournot model of competition reveals that that fewer—not more—firms would lead to lower price, more investment, and more jobs.  Our paper, not unexpectedly, raised a few eyebrows.  (For a CliffsNotes summary of our paper, see my February 8, 2012 blog post.) This weekend, Steven Crowley at GigaOm, a consulting engineer, posted some … Read more →

Some Thoughts on the FCC’s New Interoperability NPRM…

March 28th, 2012 | Posted by Larry Spiwak in Federal Communications Commission | Interoperability | Mobile Broadband | Spectrum | Wireless - (Comments Off)

Last week, the Federal Communications Commission (“FCC”) issued an interesting Notice of Proposed Rulemaking or “NPRM.”  Basically, the FCC announced that assuming that some technical glitches can be worked out (and the agency was optimistic that they could), the FCC would like to see—either by voluntary agreement or by regulatory fiat—interoperability for mobile devices and equipment in the lower 700 MHz band. The agency’s rulemaking appears to be motivated by the desire to promote handset availability for the smaller and rural operators that purchased A block licenses in the 2008 auction.  According to these carriers, given their given their small size they cannot obtain the … Read more →

More Evidence on the Failure of Government “Stimulus”…

March 13th, 2012 | Posted by Larry Spiwak in Employment | Federal Budget | Federal Deficit | Law and Economics | Regulatory Reform | Stimulus - (Comments Off)

Last week, there was sad story in the Washington Times reporting that the District of Columbia has received more than $855 million in federal economic stimulus funds since 2009, but that this spending had not been shown to produce any significant improvement in the city’s jobs outlook.  As a third-generation Washingtonian, it would be easy for me to blame the failure of federal stimulus to actually do any stimulating on the congenital dysfunction of the D.C. Government.  Instead, I think the lesson learned here is that despite its intentions, government stimulus just isn’t that helpful in creating new private sector jobs regardless of geographic location. … Read more →

Curbing the FCC’s Ability to Impose “Voluntary” Merger Commitments…

March 6th, 2012 | Posted by Larry Spiwak in FCC Reform | Federal Communications Commission | Law and Economics | Merger Review | Regulatory Reform - (Comments Off)

Over my eighteen years in the telecommunications business, one of my biggest pet peeves has been the politicization of the Federal Communication Commission’s merger review process.  As I noted in a paper entitled Separating Politics from Policy in FCC Merger Reviews: A Basic Legal Primer of the “Public Interest” Standard I authored with my former colleague Tom Koutsky back in 2007 and subsequently published in an academic journal in 2010, my issue is not that the concept of the “public interest” is vague (it is not), but that both sides of the aisle conveniently ignore the relevant caselaw when it is politically expedient (that is, … Read more →

Should Content Providers be Allowed to Contribute to the Cost of Mobile Bandwidth?

March 2nd, 2012 | Posted by George Ford in "Over the Top" Services | Federal Communications Commission | Mobile Broadband | Net Neutrality | Network Agnostic Devices | Spectrum | Spectrum Caps | Spectrum Exhaust | Wireless - (Comments Off)

A recent article in the Wall Street Journal caught my attention, and I’m sure the attention of many others.  The article—AT&T May Try Billing App Makers (February 28, 2012)—reported that AT&T and content providers were discussing ways in which the providers of mobile content, like video streaming, could pay for (in whole or part) the cost of the data traffic on behalf of the end user.  According to the article, the interest in a content-payer system is being encouraged by content developers that “could use the feature to drum up new business from customers wary of using data-heavy services like mobile video” in a world … Read more →

Are Spectrum Caps Back?

February 28th, 2012 | Posted by Larry Spiwak in D Block | Federal Communications Commission | Incentive Auctions | Incumbent Exclusion Rules | Industry Structure and Market Performance | Mobile Broadband | Spectrum | Spectrum Caps | Spectrum Exhaust | Wireless - (Comments Off)

As the old saying goes, “be careful what you wish for.”  Well, in the case of spectrum policy, we got our wish this month when President Obama signed into law the Payroll Tax Extension bill which contained sweeping provisions to free up much-needed new commercial spectrum. While the implementation of the specific provisions of such ambitious legislation will no doubt be complex and arduous, I would like to touch on two general themes in this particular post. First, we at the Phoenix Center are very proud that our research helped contribute to get the D Block assigned to public safety so that our first responders … Read more →

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