Frontline relied on the DOJ foreclosure theory to predict that the lack of eligibility restrictions in the 700 MHz auction would “inevitably” increase prices, stifle innovation, and reduce the diversity of service offerings as Verizon and AT&T warehoused the spectrum. In reality, the exact opposite occurred.
The DOJ recently recommended that the FCC rig the upcoming incentive auction to ensure Sprint Nextel and T-Mobile are winners and Verizon and AT&T are losers. I previously noted that the DOJ spectrum plan (1) inconsistent with its own findings in recent merger proceedings and the intent of Congress, (2) inherently discriminatory, and (3) irrational as applied. Additional analysis indicates that it isn’t supported by economic theory or FCC factual findings either. Continue reading →
DISH Network gets another opportunity on Tuesday to plead with Congress for another Satellite Home Viewer Act reauthorization—ostensibly to protect consumers from unwarranted rate increases and program blackouts, but actually to preserve and expand DISH Network’s and DirecTV’s access to broadcast programming at regulated, below-market rates.
A couple minor provisions in the Act that have nearly outlived their original purpose are due to expire, but DISH Network is taking advantage of this opportunity to argue that “there is much more that Congress can do to expand consumers’ access to local programming…” DISH’s plea is an example of the narcotic effect of supposedly benign regulation intended to promote competition by giving nascent competitors a leg up. DISH Network, in particular, has become addicted to artificially low prices for broadcast programming, and will seize any opportunity to reduce its programming costs some more through regulation.One of the problems with betting your shareowners’ company on regulation is that in politics, nothing lasts forever. Another is that there are certain laws of economics, and they still apply. Shareowners really ought to be on high alert for the appearance of a Beltway, State Capitol or City Hall strategy—firms that can compete and win in the marketplace have no need for regulatory advantages.
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Over at Freedom to Tinker, Steve Schultze has a response to my Reason article about Craigslist suing its competitors. Steve expresses some surprise that I would suggest that we might want to recognize a new property right since I have been so critical of the excesses of our current IP regime. Let me take a stab at reconciling that seeming paradox.
First, I should say I’m sympathetic to Steve’s position, which he shares with many others, and which may well be right. I wrote the Reason article more than anything to provide some balance to what I saw as a knee-jerk reaction in the blogosphere to the Craigslist ruling. I really didn’t see anyone giving Craigslist’s claims a fair shake (probably because the company is acting hypocritically given the public profile they have cultivated). That’s why in the article I’m ambivalent about whether Craigslist should have any remedy, and why I don’t make the case that trespass to chattels is the right approach. The point is that neither am I convinced that it’s clearly the wrong approach, or that Craigslist should clearly not be waging this suit.
That said, let me suggest that my thinking on this is not at odds with my thinking on copyright. Steve chides me for saying that maybe there’s something to Craigslist’s claims because what its competitors are doing doesn’t “sit well.” He says that “the notion that something doesn’t ‘sit well’ is not necessarily a good indicator that one can or should prevail in legal action,” and he’s right, which is why I don’t make that claim in the article. He goes on to admit that “to be sure, tort law (and common law more generally) develops in part out of our collective notion of what does or doesn’t seem right.” And that was my point. The fact that what Craigslist’s competitors are doing doesn’t sit well, I suggest, should give us a hint that this isn’t as open-and-shut a case as some have made it out to be, and that perhaps we should take a closer look.
I’m glad Steve brings up the common law. One of the central critiques I have made about copyright as a property right is that it did not develop at common law, and is instead a creature of statute. The fact that copyright is created by politicians guessing about the future (and influenced by special interests), rather than courts deciding actual cases and controversies, is what in large part leads to its excesses. I am much less skeptical of property rights that emerge at common law over time after an evolutionary process of trial and error, and as Steve points out, this process usually begins when a court is presented with a novel question that doesn’t “sit well.”
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I plan to write more about broadband competition and the impact of Google Fiber but in the meantime, there is a New York Times article on the subject that I’ll briefly address.
The author, Eduardo Porter, misdiagnoses why tiered pricing in broadband exists, giving readers the impression that only monopolies price discriminate:
That means that in most American neighborhoods, consumers are stuck with a broadband monopoly. And monopolies don’t strive to offer the best, cheapest service. Rather, they use speed as a tool to discriminate by price — coaxing consumers who are willing to pay for high-speed broadband into more costly and profitable tiers.
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Over at Reason I take a look at the recent controversy around Craigslist suing some smaller competitors who have been using its listings data without permission. While I agree with most commentators that neither copyright nor CFAA claims make sense in this case, I depart from what seems to be the conventional thinking in arguing that it’s not so clear that Craigslist should have no remedy:
>[I]t’s pretty easy to see why Craigslist should care that others are building on top of and extending its service. What makes the company so valuable is its strong network effect. People go to Craigslist because that’s where the people are. If it loses that, it loses its business.
>PadMapper aggregates and presents listings not just from Craigslist, but from other apartment listing sites as well, including Apartments.com and Rent.com. This is great for users because they only need go to one site to browse all the listings across multiple databases. It’s bad for Craigslist, however, because it makes it less of a focal site. Such aggregators make it less important that an apartment be listed at Craigslist specifically as long as it is in the aggregated list.
>PadMapper also offers listings of its own listings through its PadLister service. This means that PadMapper relies on the network effects that Craigslist has developed in order to draw in an audience, and then promotes and sells its own listing service to that audience. While that business model is certainly innovative, and may not violate copyright, it doesn’t sit well, either.
>Craigslist disrupted the newspaper industry by decimating traditional classifieds. It did this by offering a better alternative to its competitors that attracted consumers away from newspapers. Craigslist didn’t copy newspaper ads to jumpstart its operation, just as Facebook didn’t jumpstart its network by copying over MySpace accounts. That’s true innovation: taking command of the network effect by offering a superior product. So shouldn’t we expect the same from new entrants in the classifieds space?
Check out the whole thing here.
The Information Economy Project at the George Mason University School of Law is hosting a conference tomorrow, Friday, April 19. The conference title is From Monopoly to Competition or Competition to Monopoly? U.S. Broadband Markets in 2013. There will be two morning panels featuring discussion of competition in the broadband marketplace and the social value of “ultra-fast” broadband speeds.
We have a great lineup, including keynote addresses from Commissioner Joshua Wright, Federal Trade Commission and from Dr. Robert Crandall, Brookings Institution.
The panelists include:
Eli Noam, Columbia Business School
Marius Schwartz, Georgetown University, former FCC Chief Economist
Babette Boliek, Pepperdine University School of Law
Robert Kenny, Communications Chambers (U.K.)
Scott Wallsten, Technology Policy Institute
The panels will be moderated by Kenneth Heyer, Federal Trade Commission and Gus Hurwitz, University of Pennsylvania, respectively. A continental breakfast will be served at 8:00 am and a buffet lunch is provided. We expect to adjourn at 1:30 pm. You can find an agenda here and can RSVP here. Space is limited and we expect a full house, so those interested are encouraged to register as soon as possible.
Joshua Gans, professor of Strategic Management at the University of Toronto’s Rotman School of Management and author of the new book Information Wants to be Shared, discusses modern media economics, including how books, movies, music, and news will be supported in the future.
Gans argues that sharing enhances most information’s value. He also explains that the business models of traditional media companies, gatekeepers who have relied on scarcity and control, have collapsed in the face of new technologies. Equally important, he argues that sharing can revive moribund, threatened industries even as he examines platforms that have, almost accidentally, thrived in this new environment.
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Today Reason has published my policy paper addressing privacy concerns created by search, social networking and Web-based e-commerce in general.
These web sites have been in regulatory crosshairs for some time, although Congress and the Federal Trade Commission have been hesitant to push forward with restrictive legislation such as “Do Not Track” and mandatory opt-in or top-down mandates such as the White House drafted “Privacy Bill of Rights.” An the U.S. seems unwilling to go to the lengths Europe is, contemplating such unworkable rules like demanding an “Internet eraser button”—a sort of online memory hole that would scrub any information about you that is accessible on the Web, even if it is part of the public record.
In my paper, It’s Not Personal: The Dangers of Misapplied Policies to Search, Social Media and Other Web Content, I discuss the difficulty of regulating personal disclosure because different people have different thresholds for privacy. We all know people who refuse to go on Facebook because they are wary of allowing too much information about themselves to circulate. Where it gets dicey is when authority figures take a paternalistic attitude and start deciding what information I will not be allowed to share, for what they claim is my own good.
Top down mandates really don’t work, mainly because popular attitudes are always in flux. Offer me 50 percent off on a hotel room, and I may be willing to tell you where I’m vacationing. Find me interesting books and movies, and I may be happy to let you know my favorite titles.
Instead, ground-up guidelines that arise as users become more comfortable with the medium, and sites work to establish trust, work better. True, Google and Facebook often push the envelope in trying to determine where user boundaries are, but pull back when run into user protest. And when the FTC took up Google’s and Facebook’s practices, while the agency shook a metaphorical finger at both companies’ aggressiveness, it assessed no fines or penalties, essentially finding that no consumer harm was done.
This course has been wise. The willingness of users to exchange information about themselves in return for value is an important element of e-commerce. It is worth considering some likely consequences if the government pushes too hard to prevent sites from gathering information about users.
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Sean Flaim, an attorney focusing on antitrust, intellectual property, cyberlaw, and privacy, discusses his new paper “Copyright Conspiracy: How the New Copyright Alert System May Violate the Sherman Act,” recently published in the New York University Journal of Intellectual Property and Entertainment Law.
Flaim describes content owners early attempts to enforce copyright through lawsuit as a “public relations nightmare” that humanized piracy and created outrage over large fines imposed on casual downloaders. According to Flaim, the Copyright Alert System is a more nuanced approach by the content industry to crack down on copyright infringement online, which arose in response to a government failure to update copyright law to reflect the nature of modern information exchange.
Flaim explains the six stages of the Copyright Alert System in action, noting his own suspicions about the program’s states intent as a education tool for repeat violators of copyright law online. In addition to antitrust concerns, Flaim worries that appropriate cost-benefit analysis has not been applied to this private regulation system, and, ultimately, that private companies are being granted a government-like power to punish individuals for breaking the law.
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Tuesday was a big day for the FCC. The Senate Commerce, Science and Transportation Committee held an oversight hearing with all five Commissioners, the same day that reply comments were due on the design of eventual “incentive auctions” for over-the-air broadcast spectrum. And the proposed merger of T-Mobile USA and MetroPCS was approved.
All this activity reflects the stark reality that the Commission stands at a crossroads. As once-separate wired and wireless communications networks for voice, video, and data converge on the single IP standard, and as mobile users continue to demonstrate insatiable demand for bandwidth for new apps, the FCC can serve as midwife in the transition to next-generation networks. Or, the agency can put on the blinkers and mechanically apply rules and regulations designed for a by-gone era. 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.