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Regulatory Comments "AT&T's petition presents the FCC with a stark choice: Bootstrap the regulations of a dying 20th century technology platform onto the networks of the future, to ever-diminishing consumer benefits, or take the lead in coordinating the transition to “Internet Everywhere”...
“AT&T’s petition presents the FCC with a stark choice: Bootstrap the regulations of a dying 20th century technology platform onto the networks of the future, to ever-diminishing consumer benefits, or take the lead in coordinating the transition to “Internet Everywhere”—Internet analyst Larry Downes’ term for a single IP-based networking standard built into all next-generation infrastructure and equipment. “
TOTM As Democrats insist that income taxes on the 1% must go up in the name of fairness, one Democratic Senator wants to make sure that the 1% of heaviest Internet users pay the same price as the rest of us.
As Democrats insist that income taxes on the 1% must go up in the name of fairness, one Democratic Senator wants to make sure that the 1% of heaviest Internet users pay the same price as the rest of us. It’s ironic how confused social justice gets when the Internet’s involved.
Read the full piece here.
Popular Media Now that the election is over, the Federal Communications Commission is returning to the important but painfully slow business of updating its spectrum management policies for the 21st century.
Excerpt Now that the election is over, the Federal Communications Commission is returning to the important but painfully slow business of updating its spectrum management policies for the 21st century. That includes a process the agency started in September to formalize its dangerously unstructured role in reviewing mergers and other large transactions in the communications industry. This followed growing concern about “mission creep” at the FCC, which, in deals such as those between Comcast and NBCUniversal, AT&T and T-Mobile USA, and Verizon Wireless and SpectrumCo, has repeatedly been caught with its thumb on the scales of what is supposed to be a balance between private markets and what the Communications Act refers to as the “public interest.” Commission reviews of private transactions are only growing more common—and more problematic. The mobile revolution is severely testing the FCC’s increasingly anachronistic approach to assigning licenses for radio frequencies in the first place, putting pressure on carriers to use mergers and other secondary market deals to obtain the bandwidth needed to satisfy exploding customer demand. While the Department of Justice reviews these transactions under antitrust law, the FCC has the final say on the transfer of any and all spectrum licenses. Increasingly, the agency is using that limited authority to restructure communications markets, beltway-style, elevating the appearance of increased competition over the substance of an increasingly dynamic, consumer-driven mobile market. Given the very different speeds at which Silicon Valley and Washington operate, the expanding scope of FCC intervention is increasingly doing more harm than good.
Now that the election is over, the Federal Communications Commission is returning to the important but painfully slow business of updating its spectrum management policies for the 21st century. That includes a process the agency started in September to formalize its dangerously unstructured role in reviewing mergers and other large transactions in the communications industry.
This followed growing concern about “mission creep” at the FCC, which, in deals such as those between Comcast and NBCUniversal, AT&T and T-Mobile USA, and Verizon Wireless and SpectrumCo, has repeatedly been caught with its thumb on the scales of what is supposed to be a balance between private markets and what the Communications Act refers to as the “public interest.”
Commission reviews of private transactions are only growing more common—and more problematic. The mobile revolution is severely testing the FCC’s increasingly anachronistic approach to assigning licenses for radio frequencies in the first place, putting pressure on carriers to use mergers and other secondary market deals to obtain the bandwidth needed to satisfy exploding customer demand.
While the Department of Justice reviews these transactions under antitrust law, the FCC has the final say on the transfer of any and all spectrum licenses. Increasingly, the agency is using that limited authority to restructure communications markets, beltway-style, elevating the appearance of increased competition over the substance of an increasingly dynamic, consumer-driven mobile market.
Given the very different speeds at which Silicon Valley and Washington operate, the expanding scope of FCC intervention is increasingly doing more harm than good.
Continue reading on Bloomberg BNA
Regulatory Comments The FCC’s current policies and rules regarding mobile spectrum holdings are in desperate need of an upgrade.
The FCC’s current policies and rules regarding mobile spectrum holdings are in desperate need of an upgrade. The landscape of the wireless market has changed dramatically over the last several years, and consumers’ demand for mobile broadband services is skyrocketing with little new supply [of spectrum?] coming online [available?] in the near future. If consumers’ demands are to be met, spectrum must be allowed to “rise to its highest valued use.” This means there must be a functional market by which spectrum can be transferred from those who currently hold it to those who value it more. In other words, to paraphrase Frank Herbert’s classic novel Dune, “the spectrum must flow!”
But for that to happen the FCC can’t sit as an impediment to consumer-welfare enhancing transactions that re-allocate spectrum to these highest valued uses. The Commission’s current spectrum transfer review process is not up to the task, and some of the proposed reforms would only exacerbate the problem. Heeding Commissioner’s McDowell’s urging that “interested parties [] comment on the potential for negative market effects should the Commission inch down the road toward spectrum caps or other new mandates,” we submit this comment to suggest that the FCC must adopt a more economically-rigorous approach to license transfer reviews — one that does not trade away effectiveness for the sake of mere administrability nor dynamic, forward-looking efficiency for the sake of the Commission’s flawed vision of an optimal, static market structure.
Rather, the FCC should follow the lead of its antitrust agency counterparts and employ a “rule of reason” analysis in its review of spectrum transfers. Moreover, the FCC should defer to the comparative advantage of its antitrust agency counterparts in the review of transactions that come before both the FCC and the DOJ or FTC, and forebear from such analysis entirely except to inform and advise the DOJ’s or FTC’s comprehensive antitrust review. Under no circumstances should the FCC re-impose spectrum caps or other new mandates that would only serve to thwart, not encourage, the progress of our wireless markets: While the current review process is flawed, a spectrum cap would be even worse.
Popular Media Some of the most significant transactions singled out recently for intensive federal review involve the communications industry. These include the merger of Comcast and NBCUniversal, . . .
Some of the most significant transactions singled out recently for intensive federal review involve the communications industry. These include the merger of Comcast and NBCUniversal, the failed merger of AT&T and T-Mobile USA, a multi-billion purchase of spectrum by Verizon from a consortium of cable companies and, just recently, the announced acquisition by T-Mobile USA of rival MetroPCS and Softbank’s offer for Sprint.
TOTM “Real lawyers read the footnotes!”—thus did Harold Feld chastise Geoff and Berin in a recent blog post about our CNET piece on the Verizon/SpectrumCo transaction. . . .
“Real lawyers read the footnotes!”—thus did Harold Feld chastise Geoff and Berin in a recent blog post about our CNET piece on the Verizon/SpectrumCo transaction. We argued, as did Commissioner Pai in his concurrence, that the FCC provided no legal basis for its claims of authority to review the Commercial Agreements that accompanied Verizon’s purchase of spectrum licenses—and that these agreements for joint marketing, etc. were properly subject only to DOJ review (under antitrust).
Popular Media Yesterday was seemingly a good day for users of smartphones, tablets and other mobile devices. The Federal Communications Commission approved, with conditions, Verizon’s purchase of wireless . . .
Yesterday was seemingly a good day for users of smartphones, tablets and other mobile devices. The Federal Communications Commission approved, with conditions, Verizon’s purchase of wireless spectrum from SpectrumCo, a consortium of cable companies. The more spectrum that’s put to use, the more we’ll ease the coming “spectrum crunch” as exploding data demands outstrip supply. This particular spectrum has sat unused for years, and the FCC’s approval of the deal (following on the Department of Justice’s approval last week) clears the way for some welcome relief.
Popular Media The pending wireless spectrum deal between Verizon Wireless and a group of cable companies (the SpectrumCo deal, for short) continues to attract opprobrium from self-proclaimed consumer advocates . . .
The pending wireless spectrum deal between Verizon Wireless and a group of cable companies (the SpectrumCo deal, for short) continues to attract opprobrium from self-proclaimed consumer advocates and policy scolds. In the latest salvo, Public Knowledge’s Harold Feld (and other critics of the deal) aren’t happy that Verizon seems to be working to appease the regulators by selling off some of its spectrum in an effort to secure approval for its deal. Critics are surely correct that appeasement is what’s going on here—but why this merits their derision is unclear.
Regulatory Comments It has been said that sometimes the best way to know the weather, is to step outside. For the FCC, it is time to take that first step outside into the reality of competition in the mobile marketplace.
It has been said that sometimes the best way to know the weather, is to step outside. For the FCC, it is time to take that first step outside into the reality of competition in the mobile marketplace. The mobile market stands as one of the few bright spots in the economy, limited primarily by severe constraints on its chief asset: spectrum. Verizon has decided to undertake what any prudent business would do—obtain those inputs necessary for its continued growth.
Critics of the proposed transaction lament the concentration of more spectrum in the hands of one of the industry’s biggest players. But this implicit equation of concentration with harm to consumers is unsupported and misplaced. Concentration of resources in the hands of the largest wireless providers has not slowed the growth of the market; the problem is that growth in demand has dramatically outpaced capacity. Meanwhile, whatever the claimed merits may be of other, smaller companies holding this spectrum (as the deal’s opponents seem to want), that theoretical deal is not before the Agency, and the Commission is precluded from evaluating this deal in light of that hypothetical alternative.
While the FCC undeniably has authority to review the license transfers under the Federal Communications Act, its purview to review transactions is intentionally limited in substantive scope, and the Commercial Agreements that the deal’s opponents want to bootstrap into the FCC’s review are outside of it. Whether those agreements have anticompetitive effect is properly the province of the Department of Justice and their effect on competition is best measured under the antitrust laws, not by the FCC under its vague “public interest” standard. Indeed, if the FCC can assert jurisdiction over the Commercial Agreements as part of its public interest review, its authority over license transfers will become a license to regulate all aspects of business—duplicating merger review by the DOJ, but under a standard of review that lacks any clear limiting principles and analytical rigor. This is a recipe for certain mischief.
In the final analysis, the mobile wireless telecommunications services market is not concentrated to the extent that anticompetitive effects would result from this transaction. At the same time, the need for all competitors, including Verizon, to obtain sufficient spectrum to meet increasing demand is so large that the transfer this deal contemplates of unused spectrum from companies with no means to deploy it to a company that has demonstrated itself to be one of the most significant in the industry is plainly in the public interest and should be approved.
