Articles by Adam Thierer 
Senior Fellow in Technology & Innovation at the R Street Institute in Washington, DC. Formerly a senior research fellow at the Mercatus Center at George Mason University, President of the Progress & Freedom Foundation, Director of Telecommunications Studies at the Cato Institute, and a Fellow in Economic Policy at the Heritage Foundation.
I love that title from this new article in the latest Economist. The article is refering to the growing influence that mobile phones are having on society. There seemingly isn’t anything a cell phone can’t do for you these days, which has led to others referring to them as the “Swiss Army Knife of consumer electronics.”
You can play games, download videos, surf the Net, type e-mails, take pictures, schedule meetings, and oh yeah… you can call people too! Regardless of what you want to call them, mobile devices are revolutionizing the world of communications and challenging all the traditional assumptions about this sector being a natural monopoly. It always kills me to watch members of Congress or FCC regulators standing at a podium delivering a speech about how nothing has changed in the world of communications and how some of the old wireline players are still poised to quash all the competition. And then you look down and affixed to their waistlines is a veritable Batman-belt full of wireless gadgets. I’m not kidding, nobody on this planet uses more wireless devices than a U.S. Congressman. If you took away their Blackberries for a day, they’d have to shut down the government. (Not a bad idea now that I think about it.)
Today’s Wall Street Journal reports that the Federal Trade Commission is expected to file a lawsuit to block Blockbuster’s move to takeover Hollywood Entertainment, a competing video rental company.
Here again is a classic example of how backward looking antitrust officials can often be. I suppose an argument could have be made that this was anti-competitive five years ago, when everyone still drove down to the local video store to get their movies. But come on, the world has changed a lot since then! Certainly most antitrust officials must have heard of Netflix by now. Netflix alone is decimating the traditional movie rental business and has already forced it to change its business model by eliminating late fees and moving to adopt their own online services.
Meanwhile, on-demand, pay-per-view video offerings are flourishing. Turn on any cable or satellite service and start flipping through the pay-per-view channels. It’ll take you a short eternity to scan all the options at your disposal.
And then’s there’s Internet video. True, it’s still in its infancy, but for a couple of bucks you can already download and watch most your favorite movies on your PC via Movielink.com.
Meanwhile, the costs of DVDs continue to fall to the point where if you plan on watching a movie more than once, you might as well just buy it for your personal collection. Heck, WalMart has giant bins of movies on sale every day for a couple of bucks.
So the net result of the FTC blocking a Blockbuster-Hollywood Video merger will just be to stop two dying dinosaurs from having a chance to survive this coming storm. Once again, antitrust officials got the relevant market wrong and failed to appreciate the rapid pace of technological change.
[[cross-posted from PFF Blog ]]
Should “South Park” be censored? What about “Nip/Tuck?” How about “The Shield?” If some members of Congress have their way, these cable shows (or the stations that air them) might soon be subjected to the FCC’s indecency regime.
Recently, the respective chairmen of the Senate and House Commerce Committees, Sen. Ted Stevens (R-Alaska) and Rep. Joe Barton (R-TX), both reiterated their support for applying indecency regulations to at least cable and satellite channels on the basic tier.
In the last session of Congress, an attempt to impose indecency regs on basic cable was narrowly defeated by a 12-11 vote of the Senate Commerce Committee. Importantly, Sen. Stevens voted against the proposal then, but he’s obviously ready to switch his vote now. And FCC Commissioner Kevin Martin, the next likely chairman of the agency, has repeatedly expressed support for a “comprehensive solution” to this issue as more people migrate to cable and satellite TV. “I am sympathetic to the many people asking why our indecency regulations apply only to broadcast,” he told members of Congress during a hearing last year.
And, just yesterday, Sen. John Rockefeller (D-WV) and Sen. Kay Bailey Hutchison (R-TX) dropped a new bill, “The Indecent and Gratuitous and Excessively Violent Programming Control Act of 2005,” which says that “Broadcast television, cable television
and video programming are uniquely pervasive presences in the lives of all American children; and readily available to all American children.” Their bill goes on to propose the application of traditional broadcast controls to subscription-based media and would also mandate FCC controls on “excessively violent programming” during the hours that children might constitute a substantial portion of the viewing audience. (No word yet on whether “video programming” would also include DVDs, the Internet, or mobile content).
So, it appears that Congress and the FCC are ready to open this regulatory Pandora’s Box and begin censoring subscription-based media. There are three things I find very troubling about all of this:
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Yesterday, I was warning of government threats to regulate your i-Pod and video game platforms. Today I’m going to talk about the looming threat of cell phone censorship.
We live in a multi-media, multi-screen world. That is, video content is no longer the exclusive property of the clunky old living room television set. Today, we can view content on numerous types of devices and screens.
If you want to take a DVD on a long plane ride with you, you grab your portable DVD player and watch it on that screen. Or you just watch the in-flight video on the drop-down screen. You want to watch videos in your car? Generally not a good idea if you’re driving, but numerous video devices are on the market for your dashboard (or even your steering wheel) that will allow you to watch TV. And as millions of parents like me can attest, there’s no bigger lifesaver on long road trips than a portable (or built-in) DVD player to keep the kids quiet.
Care to watch video anywhere else? Well, with cell phones quickly becoming an all-purpose, “Swiss Army Knife of consumer electronics,” you can do it. In today’s Wall Street Journal (p. B4), Donna Fuscaldo provides a wonderful overview of all the video services that cell phone providers are currently rolling out to offer on-the-go content along with the other voice and data services we want. She quotes Peter Sharzynski, a senior VP of Samsung, who correctly notes that, “People are looking at entertainment in really broad ways. It’s just not going home and sitting in front of your TV. It’s TV on the go.”
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Monitoring children is difficult business. I should know; I have two little critters who aren’t even 4 years old yet whose eyes and ears I”m already trying to protect from certain material. Millions of other parents share this difficult task with me.
But, thankfully, Hillary Clinton is coming to our rescue.
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[cross-posted from the PFF blog]
On February 28, the FCC released an important decision holding that the film Saving Private Ryan was not “indecent” and could be shown on primetime broadcast television without fear of fines.
The decision was handed down four months after 66 of ABC’s 225 affiliated stations – – covering roughly one-third of the country – – decided not to air the film fearing that they might be caught in the FCC’s growing indecency enforcement net. Several of these affiliates cited the uncertainty surrounding the agency’s stepped-up indecency “crackdown” in the wake of the Janet Jackson episode at last year’s Super Bowl.
The FCC was also compelled to issue a ruling in this case since it received an official complaint from the American Family Association (AFA) asking the agency to pursue sanctions against ABC stations that aired the film.
First, the good news: The FCC denied the AFA complaint and ruled that Saving Private Ryan was not indecent and that no ABC affiliate would be fined for airing the film. But how the FCC arrived at this conclusion is somewhat troubling, or it at least raises as many questions as it answers about how current indecency “standards” will be interpreted by the agency in the future.
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Hey gang, Adam Thierer here… I wanted to let everyone know that I have left the Cato Institute and moved over to the Progress and Freedom Foundation to create PFF’s new Center for Digital Media Freedom.
Allow me to tell you a little more about this project and what we hope to accomplish at the Center.
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VoIP provider Vonage is up in arms about a certain telecom carrier apparently attempting to block customer access to their services. See this Washington Post article for the details.
Before everyone runs to the FCC asking for broadband regulation, let me offer a few thoughts on this matter…
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Last August I posted big rant about “Is DRM the Devil? The Debate over Digital Rights Management, Trusted Computing and Fair Use in Copyright Law.” In it, I mentioned a forthcoming Cato Institute study by Michael Einhorn and Bill Rosenblatt entitled, “Peer-to-Peer Networking and Digital Rights Management: How Market Tools Can Solve Copyright Problems.” Well, I’m happy to say that it’s finally out!
In this paper, Einhorn and Rosenblatt demonstrate that DRM and P2P can be quite complementary and that innovative market mechanisms that can help alleviate many copyright concerns are currently blossoming.
Einhorn and Rosenblatt argue that “Government should protect the copyrights of content owners but simultaneously allow the free market to determine potential synergies, responses, and outcomes that tap different P2P and DRM business models. In particular, market operations are greatly preferable to government technology controls,” they note.
Their paper outlines the many innovative business models and technological solutions already being deployed in the marketplace proving that, contrary to what many critics on both sides of this debate argue, a well-functioning marketplace is currently at work.
I encourage you to download and read this important new study:
http://www.cato.org/pub_display.php?pub_id=3670
There’s been a lot of hand-wringing going on in the media and in Washington this week over the announced mergers of SBC-AT&T and Verizon-MCI. The Chicken Little crowd is out in force with their claims that the sky is going to fall on consumers should these mergers go forward.
The problem here is that too many people are still thinking about telecommunications in 1980s terms. We still talk about “local” versus “long-distance” providers as if they are distinct sectors. This is just silly. We have been witnessing the rapid death of what we used to call the long-distance sector. The rise of the wireless industry long ago decimated the long-term viability of long-distance sector. Consumers have always desired simple, flat-rate pricing for all their communications services and that’s what wireless gives them. With everyone now thinking in terms of buckets of minutes, it was only a matter of time before long distance was shown the door by most customers.
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