Jerry Ellig, senior research fellow at the Mercatus Center at George Mason University, discusses the the FCC’s lifeline assistance benefit funded through the Universal Service Fund (USF). The program, created in 1997, subsidizes phone services for low-income households. The USF is not funded through the federal budget, rather via a fee from monthly phone bills — reaching an all-time high of 17% of telecomm companies’ revenues last year. Ellig discusses the similarities between the USF fee and a tax, how the fee fluctuates, how subsidies to the telecomm industry have boomed in recent years, and how to curb the waste, fraud and abuse that comes as a result of the lifeline assistance benefit.
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At this week’s excellent State of the Net 2011 event, I participated in a panel discussion about the future of the online video marketplace. Unsurprisingly, a great deal of time was spent discussing the Federal Communications Commission’s (FCC) recent approval of the proposed merger of Comcast and NBC Universal (NBCU). On Tuesday, the agency voted 4-1 to approve the deal with myriad conditions and “voluntary” concessions being attached. The FCC voted on the matter and issued a short press release and late today issued its final 279-page order.
The Commission’s Comcast-NBCU order represents an unprecedented regulatory shakedown of a company that obviously would have done just about anything to gain approval of the deal. I believe the conditions the FCC has imposed on the deal, which are to run for seven years, are tantamount to a death by a thousand cuts for the deal and, ultimately, could lead to its failure. That’s because the requirements placed on the new entity make it practically impossible for Comcast to leverage the content it is acquiring from NBCU and profit from it such that they can recoup the significant costs associated with the deal.
In essence, Comcast-NBCU was forced to preemptively surrender much of its intellectual property rights by agreeing to share most of their content properties with others on terms someone else will determine. That’s a recipe for disaster. If Comcast-NBCU doesn’t have the right and ability to cut deals on terms that they find advantageous to the company and its shareholders, then why go through with this deal at all? Isn’t the whole point of such a deal with get some additional in-house content properties — something Comcast almost completely lacked previously — such that it would have some content gems to highlight and leverage in an attempt to attract new customers (or just keep old ones)? If someone else is constantly setting the terms of their deals, it will limit the inherent value of the IP owned by Comcast-NBCU and sap most of the value from the deal. Continue reading →
I’ve just released a new PFF white paper looking at the hysteria that has often accompanied major media mergers and then taking a look at the marketplace reality years after the fact. Here‘s the PDF, but I have also pasted the entire thing down below.
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A Brief History of Media Merger Hysteria:
From AOL-Time Warner to Comcast-NBC
by Adam Thierer
Although the pending union of Comcast and NBC Universal has not yet made it to the altar, Chicken Little-esque wails about the marriage have already begun in earnest. For example, the pro-regulatory media organization Free Press has already set up a website to complain about the deal.[1] And Jeff Chester, executive director of the Center for Digital Democracy, has called it “an unholy marriage.”[2] The fever only promises to spread once the deal is formally announced, and a lengthy fight over the deal is expected at the Federal Communications Commission (FCC) and whichever antitrust agency reviews the deal.[3]
But reality tends to play out somewhat less dramatically than the script penned by the media worrywarts. It’s worth looking back at some of the more prominent examples of media merger hysteria in recent years to understand why such panic is unwarranted, and why a deal between Comcast and NBC Universal is unlikely to lead to the sort of problems that the pessimists suggest.[4] Continue reading →
As anyone who has spent time searching for comments on the FCC’s website can tell you, the agency doesn’t exactly have the most user-friendly website. In the interest of making it easier for others to read the comments that came in last week in the agency’s “Child Safe Viewing Act” Notice of Inquiry, I have compiled all the major comments (those over 3 or 4 pages) and provided links to them below the fold.
Again, this proceeding was required under the “Child Safe Viewing Act of 2007,” which Congress passed last year and President Bush signed last December. The goal of the bill and the FCC’s proceeding (MB 09-26) is to study “advanced blocking technologies” that “may be appropriate across a wide variety of distribution platforms, including wired, wireless, and Internet platforms.” I filed 150+ pages worth of comments in this matter last week, and here’s my analysis of why this bill and the FCC’s proceeding are worth monitoring closely.
Continue reading →
Today I filed comments with the Federal Communications Commission (FCC) in its proceeding examining the marketplace for “advanced blocking technologies.” This proceeding was required under the “Child Safe Viewing Act of 2007,” which Congress passed last year and President Bush signed last December. The goal of the bill and the FCC’s proceeding (MB 09-26) is to study “advanced blocking technologies” that “may be appropriate across a wide variety of distribution platforms, including wired, wireless, and Internet platforms.” My colleagues will no doubt laugh about the fact that I have dropped an absurd 150 pages worth of comments on the FCC in this matter, but I had a lot to say on this topic! Parental controls, child safety, and free speech issues have been the focus of much of my research agenda over the past 10 years.
In my filing, I argue that the FCC should tread carefully in this matter since the agency has no authority over most of the media platforms and technologies described in the Commission’s recent Notice of Inquiry. Moreover, any related mandates or regulatory actions in in this area could diminish future innovation in this field and would violate the First Amendment rights of media creators and consumers alike. The other major conclusions of my filing are as follows:
- There exists an unprecedented abundance of parental control tools to help parents decide what constitutes acceptable media content in their homes and in the lives of their children.
- There is a trade-off between complexity and convenience for both tools and ratings, and no parental control tool is completely foolproof.
- Most homes have no need for parental control technologies because parents rely on other methods or there are no children in the home.
- The role of household media rules and methods is underappreciated and those rules have an important bearing on this debate.
- Parental control technologies work best in combination with educational efforts and parental involvement.
- The search for technological silver-bullets and “universal” solutions represent a quixotic, Holy Grail-like quest and it will destroy innovation in this marketplace.
- Enforcement of “household standards” made possible through use of parental controls and other methods negates the need for “community standards”-based content regulation.
My entire filing can be found here and down below in a Scribd reader. All comments in the matter are due tomorrow and then reply comments are due on May 18th.
Continue reading →
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.