Regardless of what you think of the AT&T/T-Mobile merger or the recently announced purchase of SpectrumCo licenses by Verizon, these deals tell us one thing: wireless carriers need access to more spectrum for mobile broadband. If they can’t have access to TV broadcast spectrum, they will get it where they can, and that’s by acquiring competitors.
In a [new Mercatus Center Working Paper](http://mercatus.org/publication/federal-communication-commissions-excellent-mobile-competition-adventure) filed today as a comment in the FCC’s *15th Annual Report and Analysis of Competitive Market Conditions With Respect to Mobile Wireless* proceeding, [Tom Hazlett](http://mason.gmu.edu/~thazlett/) writes that while the market it competitive, the prospects for “new” spectrum look dim.
>[S]pectrum allocation is the essential public policy that enables—or limits—growth in mobile markets. Spectrum, assigned via liberal licenses yielding competitive operators control of frequency spaces, sets “disruptive innovation” in motion. Liberalization allowed the market to do what was unanticipated and could not be specified in a traditional FCC wireless license. That success deserves to grow; the amount of spectrum allocated to liberal licenses needs to expand. Additional bandwidth raises all consumer welfare boats, promoting competitive entry, technological upgrades, and more intense rivalry between incumbent firms.
>In this, the *Report* (correctly) follows the strong emphasis placed on pushing bandwidth into the marketplace via liberal licenses in the FCC’s *National Broadband Plan*, issued in March 2010. That analysis underscored the looming “mobile data tsunami,” noting that the long delays associated with new spectrum allocations seriously handicap emerging wireless services. But, as if to spotlight a failure to adequately address those challenges, the FCC Report speaks approvingly of the Department of Commerce (which presides over the spectrum set-aside for federal agencies) initiative that proposes a “Fast Track Evaluation report . . . examin[ing] four spectrum bands for potential evaluation within five years . . . totaling 115 MHz . . . contingent upon the allocation of resources for necessary reallocation activities.” A five-year regulatory “fast track”—if everything goes as planned.
>To paraphrase John Maynard Keynes: *In the long run, we’re all in a dead spot.*
You can [read the full report at the Mercatus Center website](http://mercatus.org/publication/federal-communication-commissions-excellent-mobile-competition-adventure).
Over at TIME.com, [I write](http://techland.time.com/2011/12/05/the-case-against-more-wireless-spectrum-for-first-responders/?iid=tl-main-feature) about the recent compromise on the D Block, which would give more spectrum to public safety, and I ponder if there may not be a better way..
>Patrol cars are as indispensable to police as radio communications. Yet when we provision cars to police, we don’t give them steel, glass and rubber and expect them to build their own. So why do we do that with radio communications?
Read [the whole thing here](http://techland.time.com/2011/12/05/the-case-against-more-wireless-spectrum-for-first-responders/?iid=tl-main-feature).
AT&T and T-Mobile withdrew their merger application from the Federal Communications Commission Nov. 29 after it became clear that rigid ideologues at the FCC with no idea how to promote economic growth were determined to create as much trouble as possible.
The companies will continue to battle the U.S. Department of Justice on behalf of their deal. They can contend with the FCC later, perhaps after the next election. The conflict with DOJ will take place in a court of law, where usually there is scrupulous regard for facts, law and procedure. By comparison, the FCC is a playground for politicians, bureaucrats and lobbyists that tends to do whatever it wants.
In an unusual move, the agency released a preliminary analysis by the staff that is critical of the merger. Although the analysis has no legal significance whatsoever, publishing it is one way the zealots hope to influence the course of events given that they may no longer be in a position to judge the merger, eventually, as a result of the 2012 election.
This is not about promoting good government; this is about ideological preferences and a determination to obtain results by hook or crook. Continue reading →
[Cross posted at Truth on the Market]
As everyone knows by now, AT&T’s proposed merger with T-Mobile has hit a bureaucratic snag at the FCC. The remarkable decision to refer the merger to the Commission’s Administrative Law Judge (in an effort to derail the deal) and the public release of the FCC staff’s internal, draft report are problematic and poorly considered. But far worse is the content of the report on which the decision to attempt to kill the deal was based.
With this report the FCC staff joins the exalted company of AT&T’s complaining competitors (surely the least reliable judges of the desirability of the proposed merger if ever there were any) and the antitrust policy scolds and consumer “advocates” who, quite literally, have never met a merger of which they approved.
In this post I’m going to hit a few of the most glaring problems in the staff’s report, and I hope to return again soon with further analysis.
As it happens, AT&T’s own response to the report is actually very good and it effectively highlights many of the key problems with the staff’s report. While it might make sense to take AT&T’s own reply with a grain of salt, in this case the reply is, if anything, too tame. No doubt the company wants to keep in the Commission’s good graces (it is the very definition of a repeat player at the agency, after all). But I am not so constrained. Using the company’s reply as a jumping off point, let me discuss a few of the problems with the staff report. Continue reading →
TechFreedom president and TLF contributor Berin Szoka will be speaking today at the
Economics of Privacy conference hosted by the Silicon Flatirons center
at the University of Colorado and co-sponsored by TechFreedom. The
entire conference will be livestreamed (embedded below) begining at 11am EST; Berin’s
panel begins at 4:30pm EST. Highlights include a keynote conversation
with FTC Commissioner Julie Brill and keynote speeches by FTC Bureau of
Economics Director Joseph Farrell and Carnegie Mellon University
Information Technology and Public Policy Associate Professor Alessandro
Acquisti. Check the schedule for full details. The Twitter hashtag for
the event is #flatirons.
Continue reading →
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