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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Author Archives: George Ford
FCC Rules Block Broadband Price Cuts…
May 13th, 2013 | Posted by in Federal Communications Commission | Law and Economics | Net Neutrality | Regulation | Wireless - (0 Comments)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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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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Sloppy Research Sinks Susan Crawford’s Book…
January 18th, 2013 | Posted by in Broadband | Cable | Federal Communications Commission | Industry Structure and Market Performance | Investment | Law and Economics | National Broadband Plan | Regulation | Spectrum | Spectrum Exhaust | Susan Crawford - (3 Comments)This month, Cardozo Law School Professor and former Special Assistant for Science, Technology, and Innovation Policy to President Barack Obama Susan Crawford released her new book entitled Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age. Professor Crawford is known as a tireless and vocal advocate for government intervention in and the regulation of telecommunications, and is perhaps the most recognized advocate for the construction of a government-funded and regulated fiber-optic Internet network servicing all American homes and businesses. Many vigorously oppose Professor Crawford’s ideas by claiming they are overly regulatory and too expensive, but many support her proposals with equal …
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Economic Theory in Action: The FCC’s Assault on the Mobile Broadband Consumer…
November 30th, 2012 | Posted by in "Over the Top" Services | Broadband | Federal Communications Commission | Industry Structure and Market Performance | Law and Economics | MVPDs | Net Neutrality | Network Agnostic Devices | Regulation | Wireless - (Comments Off)Recently, I spotted an interesting blog by Scott Wallsten at the Technology Policy Institute. In this blog, Scott discusses the FCC’s recent decision that Verizon violated the open access rules of the 700 MHz C-Block auction by charging its customers an additional $20 per month on its data plans to tether a device. In response, Verizon paid a fine and now allows tethering on all new data plans. However, Scott observes that: Verizon effectively abandoned the post-paid market for light users after the FCC decision. Verizon no longer offers individual plans. Even consumers with only a single smartphone must purchase a shared data plan. That’s …
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Stepping Out of the Pack: Broadband Investment and Private Sector Job Creation…
November 16th, 2012 | Posted by in Employment | Federal Communications Commission | Investment | IP Transition | Jobs | Law and Economics | Stimulus - (1 Comments)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 private sector investment. Yet, private …
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Why the FCC Should Not “Tax” Efforts to Repurpose Spectrum…
October 12th, 2012 | Posted by in Federal Communications Commission | Law and Economics | Spectrum | Spectrum Exhaust | Wireless - (Comments Off)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 seen activity involving the potential …
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Art Laffer and the Effect of Government Stimulus on Jobs and Investment…
August 10th, 2012 | Posted by in Federal Budget | Federal Deficit | Jobs | Law and Economics | Regulatory Reform | Stimulus - (Comments Off)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% of GDP over the 2007 …
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