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 →
I just released the following statement regarding Facebook’s settlement with the Federal Trade Commission of complaintsover changes the company made in December 2009 to what information would appear on users’ profiles:
For years, many privacy advocates have insisted that holding companies to their own privacy policies won’t protect consumers because companies can change those policies at a whim. Today’s settlement makes clear that changes to what a company may do with information already collected require informed user consent—provided the changes are material. This builds on a similar settlement with Google last month over the use of Gmail information in the Buzz social network without consent, among earlier FTC actions, such as preventing the transfer of sensitive information when a company goes into bankruptcy.
Thus, while Congress struggles to craft ‘comprehensive baseline privacy’ legislation in the European model, the FTC is using its existing 1938 authority over unfair or deceptive trade practices to build a common law of privacy. This is a process of discovery: what’s the right balance between protecting privacy and the consumer benefits of encouraging the development of new services? That process won’t be perfect or easy, but it’s much more likely to keep up with technological change than legislation or prophylactic regulation would be, and less likely to fall prey to regulatory capture by incumbents as a barrier to competition.
Case-by-case adjudication is a venerable American tradition—one that’s more, not less, vital in the rapidly changing field of consumer privacy. Rather than rushing to write new laws, Congress should focus on ensuring the FTC has the resources it needs to use its existing authority effectively. That means, most of all, having a larger core of technologists on staff to guide what is supposed to be our expert agency on privacy.
On the podcast this week, danah boyd, Senior Researcher at Microsoft Research, and Assistant Professor in Media, Culture, and Communication at New York University, discusses her recent article in First Monday with Ester Hargitai, Jason Schultz, and John Palfrey. It’s entitled, “Why parents help their children lie to Facebook about age: Unintended consequences of the Children’s Online Privacy Protection Act.” boyd discusses COPPA as it applies to Facebook, namely that children under 13 are not allowed to use the site. She then talks about her research, which looks at whether this restriction is helping parents protect their children’s privacy, and whether it is meeting COPPA’s ultimate goals. boyd discusses her findings, which indicate parents are allowing their children to lie about their age to obtain a Facebook account. According to boyd, parents want guidelines when it comes to data protection, but they do not necessarily want strict requirements. boyd feels that COPPA is not achieving its goal of privacy protection and should be evaluated with more transparency so parents and the public in general know how to protect their privacy.
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Yes, we pretty much have. That’s the inescapable conclusion following the U.S. Supreme Court’s historic First Amendment decision in Brown v. EMA back in June, which struck down a California law governing the sale of “violent video games” to minors. By a 7-2 margin, the court held that video games have First Amendment protections on par with books, film, music and other forms of entertainment.
The folks over at ALEC asked me to explore what happens next and what steps state and local lawmakers can take in a post-Brown world if they wish to address concerns about video game content. My essay appears in the Nov/Dec Inside ALEC newsletter. You can read the entire thing here or via the Scribd embed I have placed down below the fold.
I argue that, going forward, this ruling will force state and local governments to change their approach to regulating all modern media content. Education and awareness-building efforts will be the more fruitful alternative since censorship has now been largely foreclosed. Continue reading →
[Cross-posted at www.reason.org]
While shoppers were hitting the malls Friday–a fair percentage of them no doubt evaluating the many choices of wireless smartphones and service plans available–AT&T said it was withdrawing its FCC application to merge with T-Mobile.
AT&T’s move was in response to FCC Chairman Julius Genachowski’s decision to refer the merger to an administrative law judge, coupled with a statement that he remains opposed to the $39 billion merger.
Many analysts see this as the beginning of the unraveling of the acquisition. Although AT&T said it plans to defend the deal in court against a Department of Justice antitrust suit, the company has taken accounting steps that signal it is prepared to pay Deutsche Telekom, T-Mobile’s current parent, the $4 billion it pledged if it could not close the purchase by September 2012.
“The fat lady hasn’t sung yet,” said Craig Moffett, an investment analyst for Sanford C. Bernstein, as quoted by the Washington Post’s Cecilia Kang. “But she has taken the stage. And the band has begun to play.”
By itself, Genachowski’s move is a tremendous exercise of executive power, as an ALJ hearing would only occur if AT&T wins its suit with the DoJ or settles it satisfactorily. In essence, the FCC is attempting to craft an ad hoc court of appeals in order to abrogate a separate judicial ruling.
Continue reading →
Over at TIME.com, [I write](http://techland.time.com/2011/11/28/hackers-blow-up-illinois-water-utility-or-not/) about the “Russian hackers are in our water plants” min-panic that erupted last week. Turns out it was a false alarm, but that didn’t stop the rhetoric from going on overdrive. Check out [this story from Nov. 21](http://www.newsfactor.com/news/Stuxnet-Hit-on-Utility-Signals-New-Era/story.xhtml?story_id=111003TTUKBI&full_skip=1), one day before DHS and the FBI announced there was no attack, which said that a variant of Stuxnet had been used to attack the Illinois water plant and “caused the destruction of a water pump”. My takeaways from this incident:
>First, we shouldn’t jump to conclusions based on sketchy first reports of cyberattacks. Bad reporting tends to take on a life of its own. Two years ago, an electrical blackout in Brazil was similarly blamed on hackers, but the cause turned out to be [nothing more than sooty insulators](http://www.wired.com/threatlevel/2009/11/brazil_blackout/). That hasn’t stopped pundits, defense contractors and politicians from citing the debunked incident as evidence that we need comprehensive legislation to regulate Internet security.
>Second, although Bellovin was mistaken in believing the initial reports, he’s right that such an attack is possible. The discussion should be about the possible magnitude of attacks and what can be done to prevent them. Although the rhetorical engines of those who want new cyber-legislation were spinning into overdrive before the facts abruptly shut them down, this incident, if it had been a cyberattack, would not have shown a dire need for new rules. Instead, it showed that the damage was not catastrophic and that the water utility worked well with federal authorities under existing law.
Read [the whole thing](http://techland.time.com/2011/11/28/hackers-blow-up-illinois-water-utility-or-not/) at TIME.com.
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