GAO Report: Believing in Competition Doesn’t Make It Happen

Sometimes I think that the D.C. Circuit and the Republicans running the various Commerce Committees are the Arch Priests of Kiplings Gods of the Market, and it has brow-beaten the poor FCC through repeated reversals accompanied by tongue lashings into embracing this nonsense. The chief tenant of the Gods of the Market Place is that by deregulating the industry, competition emerges and consumers enjoy all the happiness that comes from a competitive environment. If this fails to happen as expected, adherents of the Gods of the Market practice a discipline called “Denial of Reality.” Practitioners of Denial of Reality believe that if you sufficiently discredit people who tell you about actual reality, and keep repeating that the reality you want actually exists, then Actual Reality will eventually by browbeaten into conforming to the reality promised by the Gods of the Market Place. And the FCC, like a good little penitent, keeps trying to produce reports that give the D.C. Circuit and the Republicans in Congress the world they want to see rather than actual reality.

Sadly, as GAO studies keep demonstrating, wishing for competition doesn’t make it so. This latest GAO Report on the lack of competition for business customers in major urban areas (and nicely explained in this piece here) is but the latest in a series of real world reports demonstrating that you can only ignore reality for so long before it bites you in the tender places. Sadly, however, it chomps down hard on the just and the unjust alike.

My analysis below . . .

Continue reading

Latest AT&T/BS Merger Twist, and Why Bill Kennard Case is Different from Robert McDowell’s

In the latest chapter of the FCC’s most gripping “telecomnovella” Death Star Reborn: The AT&T/BellSouth Merger, FCC Chairman Kevin Martin has set in motion the process to get 3rd Republican Commissioner Robert McDowell “unrecused”. The FCC has been deadlocked 2-2 because Commissioner McDowell used to represent CompTel, one of the groups opposing the merger, creating a conflict of interest. (You can see my previous coverage explaining all this here.)

McDowell, while not champing at the bit to be unrecused, has announced he’s ready to serve if the FCC’s General Counsel tells him he has to vote to break the deadlock. So it becomes possible to get this done before the new Congress takes over. Although why this should be such a big deal is beyond me, since it’s not like Congress can directly interfere with FCC merger review, and the indirect threats for payback are already on the table.

Martin, conscious of the controversial nature of the move, wrote a letter to the Chairs and ranking members of the Senate and House Commerce Committees explaining the need for such extraordinary action. In doing so, Martin observed that the FCC General Counsel had previously authorized former FCC Chairman William E. Kennard to break a 2-2 deadlock despite Kennard’s previous recusal.

Now some months back, when folks first started wondering about the “McDowell Option,” I opined that while the FCC General Counsel could force McDowell to vote, such a move would be “extraordinary” and “To the best of my knowledge, it has never happened.” So what’s all this about Kennard then?

Art Brodsky does an excellent job explaining why the Kennard situation was radically different. But, my honor being involved and all, I decided to dig a bit deeper. As explained below, the facts on the Kennard case were so bizzare and different (starting with the fact that Kennard had not been legally required to recuse himself in the first place but had done so, in his own words “out of an abundance of caution”), that I still think my original statement stands and that, if the FCC unrecuses McDowell, and requires him to vote, it’s really breaking new ground.

More detail than you could possibly want (including a timeline and relevant quotes from Kennard’s public statement in 2000 on unrecusing himself) below….

Continue reading

Appears that Rose and Lloyd (and me) were right . . .

A month or so back, I reported that Greg Rose and Mark Lloyd had written a study for the Center for American Progress concluding that incumbent wireless providers used spectrum auctions to block the mergence of new competitors. Then came the AWS auction, with its legion of bidders. “A ha!” Declared the Wall St. Journal and others in the anti-net neutrality, anti-regulatory, pro-spectrum property camp. “Look at how the market-based policies create competition! No need for regulation here!”

Turns out, not so much . . . . Either for new spectrum entrants or for broadband competition.

Continue reading

Handicaping This Week’s Big Spectrum Auction

And what a long strange trip its been to get here! In 2004, Congress passed the Commercial Spectrum Enhancement Act (CSEA), which required government users to vacate some choice spectrum so the FCC can auction it. You can see the FCC’s official page for this auction here. You can see my recent general musings on this auction on the Public Knowledge policy blog here.

But none of this tells the whole story. After two controversial rulemakings, a pending legal challenge, and the appearance of a host of new bidders, FCC Auction 66: AWS-1 is ready to start this week on August 9. A look at the list of who has come to play signals an auction of unparalleled visciousness, determination, and probable manipulation by sophisticated bidders because the FCC wussed out and did not adopt anonymous bidding.

For those interested in my handicaping what a report from the Center for American Progress describes as a corrupt means by which incumbents keep out competitors and what I have called “a really wonky version of Worlds of Warcraft,” read on!

Continue reading

But Do Spectrum Auctions *Really* Suck? According to Center for American Progress Report, You bet!

In all the hustle and bustle, it rather blew by that my friends Dr. Gregory Rose and Mark Lloyd have written this analysis of ten years of FCC spectrum auction data.

Summary — FCC auctions turn out to be great ways for incumbents to exclude new entrants and to bilk the government. They do not yield the promised efficiencies of distribution or even maximize revenue to the government. There are ways to improve the process, but the FCC open ascending auction systems just about ensures that a collection of incumbents can keep out any genuinely disruptive competitors and collude to minimize revenue to the government and maintain the status quo.

 

Continue reading

Legal Cell Phone Blocking? Cell Phone Blocking Paint and the FCC.

TMCnet reports that a company called NaturalNano has developed a paint that blocks radio waves. The paint contains nanotubes with copper cores that block radio waves of all frequencies. The article says they will market it as a cell phone blocker, but one blogger has already suggested that those anxious about leaking wifi access paint their homes with it.

But is it legal? My first reaction was “yes.” But now I’m not so sure.

Continue reading

Small But Potentially Significant Spectrum Ruling

Unnoticed by most folks, the FCC’s Enforcement Bureau issued a public notice on the legality of cell phone jammers. (They aren’t.) Oddly, this may have very significant impacts for users of unlicensed spectrum.

Continue reading

Quick Take on FCC 3650-3700

The FCC decided the 3650-3700 Order today. You can find a link on the FCC Home page.

As is customary, the Order is not yet released, so we have only the press release to go on.

My first take is below. I know a lot of people are going to be upset that it requires licensing, but it is not a “licensed” regime anymore than a truly “unlicensed” regime. We need to keep an open mind and wait for the actual order to come out.

Continue reading

Tales of the Sausage Factory: Open Spectrum Doubters

A mailing list I’m on pointed to this rant by Chris Davies against open spectrum, and asked for a response after it was cited approvingly (if confusingly) by Corante. While I am tempted to respond simply by reference to the filksong by Brenda Sutton, I will attempt a more substantive answer below (although everyone really should buy Rite the First Time to hear that song and others).

Continue reading