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Google’s Lobby Shop Creates Need for Itself

by on July 14, 2010 · 1 comment

“Live by the sword, die by the sword.”

“Play with fire and you might get burned.”

Those are lines that sprung to my mind as I read this FT article noting how Google’s support for ‘net neutrality regulation has transmogrified into a push for “search neutrality.” Such regulation would be aimed directly at Google’s heart throat nuts business model.

(I was the first to discuss “search neutrality” here on TLF. Ignore Adam’s comment.)

But sloganeering is cheap. Let’s take a minute to try and understand why things like this happen to companies like Google.

First, I think, most executives—certainly executives in tech companies—don’t understand Washington at all. They have a gauzy impression that good people work for the betterment of public policy here.

Actually, that’s true. Just about everyone is good. And everyone is working for the betterment of public policy as they see it. The thing is, everybody sees the betterment of public policy as turning it to their own interests. Washington, D.C. is a war of all against all—each trying to grab the most stuff—using politics instead of clubs, knives, and guns.

Next, I think it’s important to recognize the incentives of the people who advise tech executives. They are people with families and mortgages. They want to have and keep a job. So what do they do? They encourage involvement in public policy. The public policy advisor who says “steer clear of Washington” may be giving better advice, but his consulting contract is small and its term is short.

The government relations/lobbying shop in a company like Google is part of a larger business, yes, but it is a small bureaucracy within the business. It doesn’t produce anything subject to competitive pricing, so (accounting practices notwithstanding) there is little way to measure its value. The fallback measure is activity—the more things happening, the more ‘valuable’ the lobbying shop. (Surprise me, Google, so famous for measurement, testing, and rigor in product development. Have you got a way to measure the true value produced by your lobbying shop, law department, accounting group, etc.?)

You see how the dynamics quickly get perverse. A public policy advisor or lobbyist makes him- or herself ‘valuable’ by getting the client into trouble.

Google is not in trouble. The FT story is premature, and it’s overstatement to say that Google has been “hoisted by its own petard.”

But imagine a controlled experiment in which another Google in a parallel universe didn’t draw attention to itself in Washington, D.C., didn’t push for conditions in the 700 MHz spectrum auction, didn’t advocate for ‘net neutrality regulation, and so on. That Google might not have created—or might have delayed—the need for a permanent lobbying/government relations cost center.

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What’s Worse Than Rigged Auctions & Internet Censorship? How About Both in One Package!

by on June 6, 2008 · 7 comments

Berin Szoka and I just released a short article on the FCC’s proposed follow-up to the failed 700 mhz D Block auction:  a free, nationwide wireless service that would serve public safety users as well as consumers.  It’s attached down below or the PDF can be found here.

What’s Worse Than Rigged Auctions & Internet Censorship? How About Both in One Package!

a PFF Progress Snapshot Release 4.12 June 2008

by Adam Thierer and Berin Szoka

The big spectrum policy debate in town these days continues to be the fight about how to redo the botched D block auction. As we all know, FCC Chairman Kevin Martin’s previous effort to micro-manage that auction failed miserably. Sadly, the follow-up plan isn’t much better, as the Wall Street Journal notes in an editorial today:

You’d think Chairman Martin would have learned from this experience. It’s not the role of regulators to pick winners and losers to achieve their preferred social outcomes. Private competition and the price mechanism can most fairly and efficiently find the best use for scarce spectrum. The FCC’s clumsy attempt at social engineering resulted in a failed auction that has prevented otherwise desirable spectrum from being put to commercial use. Alas, Mr. Martin has now proposed another wireless auction for a separate piece of spectrum. And this time he wants to require the winner to offer free Internet access that filters out pornography–conditions that obviously would decrease the value of the license and turn off potential bidders. It just so happens that Mr. Martin’s proposed auction seems tailor-made for the business plan put forward by M2Z, another politically connected Silicon Valley start-up looking to enter the wireless broadband telecom market.

Continue reading →

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Just sell off the D block?

by on April 15, 2008 · 0 comments

Chairman Martin and his FCC colleagues testified today before the House Energy and Commerce Telecommunications and the Internet Subcommittee on the just-completed 700 MHz spectrum auction. At the top of the agenda was the failed D Block auction. According to Martin, all options are on the table. According to the WSJ, however, some have definite ideas for the block:

Some Republican members on the committee said they believed the 10 megahertz of spectrum should be sold off to the commercial wireless industry, and part of the proceeds then given to public safety so they could solve their communications shortcomings on their own. Those who advocate this solution have argued that public safety entities already control more than enough spectrum allocated to them by Congress over the years, but that it is being used ineffectively.

Those “some republicans” seem to include ranking member Joe Barton.

This is a bad idea. While I’m sympathetic to the argument that “public safety entities already control more than enough spectrum allocated to them by Congress over the years, but that it is being used ineffectively,” throwing more money at the problem isn’t going to fix it, either. Bringing commercial providers into the public safety sphere can help begin to break down the collective action problem that is the cause of the ineffective use of spectrum. If a commercial solution is successful, maybe then Congress can take a second look at all the spectrum public safety now holds and do something akin to the DTV transition: auction the spectrum while moving public safety to better, more efficient technologies.

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Public safety spectrum, here we go again

by on March 31, 2008 · 12 comments

Better late than never, here are my thoughts on the FCC’s auction for the D Block public safety band. There was only one bid for the block, Frontline Wireless to shut down, and some are even suggesting improprieties. Sadly, we’ve got a long way to go before we have an operating public safety network. Why did the D Block auction fail? I think at root the problem is that the FCC simply placed too many restrictions on the would-be licensee, and that’s something the FCC should keep in mind as it considers what to do next.

Under the D Block’s service rules the commercial licensee must come to an agreement with the Public Safety Spectrum Trust (which is the licensee for the adjacent public safety spectrum) about the details of the network to be built. If it doesn’t come to an agreement, the FCC can impose whatever requirements it sees fit on the licensee, and if the licensee surrenders its license or has it taken away, they must pay a forfeiture penalty that can run into the millions. Because there are no similar penalties for the non-profit PSST to come to agreement, this allows the PSST to basically dictate the terms of the network. Why would anyone bid for the privilege to be a part of that deal?

Sadly, Chairman Martin doesn’t seem to get this. He recently lamented the fate of the D Block:

“Did we get everything perfect in it? Obviously not because no one was willing to end up taking on that burden,” Martin conceded. “So, do I wish that someone was willing to take on that burden? Yes. And do we need to restructure it in such a way that someone is willing to take on that burden? Absolutely. But absent somebody else coming up with some idea to solve this, this is the only way to solve what’s really a public-safety crisis.”

Instead of expecting some selfless corporation to “take on the burden” of such a thankless deal, why not try instead to create a license aligned with the interests of both the private sector (profit) and public safety (cheap and interoperable communications solutions)? Here’s my recipe:

  1. Get rid of the PSST, a bureaucracy more than prone to capture that will do nothing but hold a commercial licensee hostage.
  2. Take the spectrum now held by the PSST and combine it with the D Block. Create two national licenses on the combined spectrum so as to inject competition and avoid a monopoly provider.
  3. Place public safety obligations on each of those licenses but allow the licensees to lease excess capacity. What sort of obligations? Obviously public safety should have priority, and leased access would only be secondary. Beyond that, the FCC could include minimum performance standards in the licenses to ensure that the networks are built to public safety standards without having to prescribe specific technologies or methods.
  4. Auction the licenses without reserve prices.

There are no doubt more than a few hurdles for such a plan to overcome, but I think it makes sense to allow market forces develop public safety networks. I’d love to hear any critiques of this idea. No doubt I’ll be submitting a comment to the inevitable rulemaking on this issue and it would help me to figure out the weaknesses of this scheme.

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Has AT&T been reading ‘The Prince’?

by on October 9, 2007 · 9 comments

In an interesting post today, Glenn Fleishman explores what AT&T’s purchase of 700 MHz spectrum from Aloha Partners today means for Verizon. While my conspiracy theory radar tingles a bit, I had this same thought earlier today. No point in paraphrasing; enter the blockquote.

AT&T spends $2.5b for 12 MHz across 200m people in the 700 MHz band: Let’s talk two-steps-ahead. In the terms for the C Block licenses that Google wanted very open and Verizon and AT&T wanted to have cell-spectrum-like restrictions, AT&T did a volte-face and said it would agree to most of the openness that Google wanted. Huh, I said, I wonder what made them do that? Well, it’s gamesmanship. AT&T was obviously already in a position to acquire Aloha Partners’s licenses. This means that AT&T is reverse-encumbering the other band. While the C Block involves more bandwidth and greater coverage, Verizon is now in a worse position because of the lack of device and application lock-in if they choose to bid in 700 MHz as AT&T will already have holdings. AT&T can have the flexibility to deploy different services in the different 700 MHz blocks. I think.

AT&T can now focus on bidding on the A and B blocks, which can compliment their Aloha acquisition and which don’t come with open-access restrictions. So did AT&T pull off a Machiavellian ploy to saddle Verizon with an open access mandate?

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