Wireless & Spectrum Policy

Hang Up on the Talking Tax

by on June 22, 2011 · 2 comments

My latest Forbes column notes how “Taxes On Talking Are On the Rise Across the U.S.” with levies on mobile phones and devices skyrocketing.  I build my argument around data and arguments found in Dan Rothschild’s excellent recent Mercatus Center paper, which makes “The Case Against Taxing Cell Phone Subscribers,” as well as an important recent study by Scott Mackey, an economist and partner at KSE Partners LLP, which documents the growing burden of these wireless taxes and fees.

“Wireless users now face a combined federal, state, and local tax and fee burden of 16.3%, a rate two times higher than the average retail sales tax rate and the highest wireless rate since 2005,” Mackey finds. Mobile tax rates range from a high of 23.7% in Nebraska to a low of 6.9% in Oregon.  48 states have an average combined wireless tax rate above 11%.  These burdensome taxes on talking just don’t make any sense, argues Rothschild. “There is no economic justification for these high tax rates: reducing cell phone ownership is not a public policy goal, cell phone use by one customer does not affect other customers or other people, and these taxes fall disproportionately on lower-income households.”

You can read my entire essay here, but also make sure to re-read Dan Rothschild’s guest post here at the TLF on the issue. It’s much better than my own treatment.  For me, the key point is this: If the primary policy goal in this arena is to build out a first-class communications and data infrastructure and make sure all Americans have access to it, discriminatory taxes on wireless services and networks are highly counter-productive. Policymakers should hang up on the Talking Tax.

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Spectrum Reform Now!

by on June 12, 2011 · 7 comments

Last week the Senate Commerce Committee passed–with deep bi-partisan support–the Public Safety Spectrum and Wireless Innovation Act.

The bill, co-sponsored by Committee Chairman Jay Rockefeller and Ranking Member Kay Bailey Hutchison, is a comprehensive effort to resolve several long-standing stalemates and impending crises having to do with one of the most critical 21st century resources: radio spectrum.

My analysis of the bill appears today on CNET. See “Spectrum reform, public safety network move forward in Senate.”

The proposed legislation is impressive in scope; it offers new and in some cases novel solutions to more than half-a-dozen spectrum-related problems, including: Continue reading →

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Guest Post: The Case against Taxing Cell Phones

by on June 2, 2011 · 1 comment

[The following essay is a guest post from Dan Rothschild, Managing Director of the State and Local Policy Project at the Mercatus Center at George Mason University.]

As cell phone ownership has tripled in the United States over the last decade, policymakers have increasingly seen mobile devices as a cash cow. In some states, consumers now pay as much as a quarter of their cell phone bills in taxes. And while state revenues are beginning to tick back up from their low point during the recession, Medicaid costs are fast on their tails. So it’s likely that over the coming years, states will be looking to find taxes to hike or new taxes to create — all without calling them tax hikes, of course.

Policy makers may be tempted to hike taxes on cell phones, or to create (or “equalize”) taxes on untaxed (or “under taxed”) parts of wireless telephony, such as cell phone data plans or e-readers with cellular connections. As I argue in a recent issue of Mercatus on Policy, this is a bad idea for a number of reasons. Continue reading →

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Sprint throws cellular backhaul in with the merger kitchen sink

by on May 25, 2011 · 7 comments

For CNET this morning, I write about the latest tempest in the AT&T/T-Mobile USA merger teapot: cellular backhaul or “special access” as its known in the industry.

Like a child sitting on Santa’s lap at the mall, Sprint CEO Dan Hesse included backhaul in his wish list of conditions he’d like to see attached to the deal.  Yesterday, Public Knowledge duly confirmed that yes, backhaul is a “multiplier” problem for the deal.

(Sprint says they would like the deal blocked, but that is mere posturing.  What they really want is to use the FCC’s bloated and unprincipled merger review process to sneak in as many private concessions for themselves as they can get.   And who can blame them for trying?  More on that in a moment.)

For those who don’t know, backhaul is the process of moving cellular traffic (voice and data) to other high-speed networks (traditionally landline copper but now including cable, fiber, microwave and local Ethernet) to transport them to their ultimate destination.  As mobile use increases, of course, the necessity of reliable, high-speed backhaul to keep overall performance up becomes more critical than ever.

Continue reading →

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Watch the Mercatus Center Panel on The FCC’S Wireless Competition Report

by on May 18, 2011 · 2 comments

Every year since 1995, the Federal Communications Commission has released a report on the state of competition in the wireless market. Last year’s report was the first not to find the market “effectively competitive.” As a result, expectations are high for the new annual report. How it determines the state of competition in the wireless market could affect regulatory policy and how the Commission looks at proposed mergers.

Tune in here to watch this afternoon’s panel discussion on these issues, brought to you by the Mercatus Center at George Mason University’s Technology Policy Program.

The panel features:

  • Thomas W. Hazlett, Professor of Law & Economics, George Mason University School of Law
  • Joshua D. Wright, Associate Professor of Law, George Mason University School of Law
  • Robert M. Frieden, Professor of Telecommunications & Law, Penn State University
  • Harold Feld, Legal Director, Public Knowledge

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Event reminder: “State of Wireless Competition” (Wed., 4:00 at GMU-Arlington)

by on May 16, 2011 · 1 comment

Just a final reminder that it isn’t too late to still register for this Wednesday’s Mercatus Center event on “The State of Wireless Competition” featuring Thomas W. Hazlett, Professor of Law & Economics, George Mason University School of Law; Joshua D. Wright, Assistant Professor of Law, George Mason University School of Law; Robert M. Frieden, Professor of Telecommunications & Law, Penn State University; and Harold Feld, Legal Director, Public Knowledge. These experts will discuss the FCC’s upcoming Wireless Competition Report and the debate:

  • What does a proper analysis of wireless competition look like?
  • What should we expect from the FCC’s report this year?
  • How should the FCC address competition in the future?

Again, the event will take place this Wednesday (May 18) from 4:00 – 5:30 p.m at George Mason University’s Arlington Campus, just ten minutes from downtown Washington. (Founders Hall, Room 111, 3351 N. Fairfax Drive, Arlington, VA). A reception will follow.

To RSVP for yourself and your guests, please contact Megan Gandee at 703-993-4967 or mmahan@gmu.edu no later than May 16, 2011. Hope to see some regular TLF readers there!

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Yet another non-consensual use of cell geo-data

by on May 11, 2011 · 3 comments

In [a post at Techland yesterday](http://techland.time.com/2011/05/10/new-emergency-alert-system-comes-to-your-phone/) I noted that the FCC and FEMA’s new “PLAN” text-based emergency alert system might do little good since new media seems to always beat government to get out critical information:

>If history is any guide, however, you may not get any messages from 1600 Pennsylvania. Since the Emergency Alert System was created in 1963, it’s never been activated, despite hurricanes, earthquakes, tornadoes, the Cuban Missile Crisis, the Oklahoma City bombing, and 9/11. Why?

>The chairman of the FCC during the 9/11 attacks, Michael Powell, says that “The explosion of 24-hour-a-day, 7-day-a-week media networks in some ways has proven to supplant those original conceptions of a senior leader’s need to talk to the people.”

>Given that it was Twitter, and not the President’s address, that recently broke the killing of Osama Bin Laden, you have to wonder whether the new service will be just as swiftly supplanted.

Another thing occurred to me talking to a colleague today. The PLAN system relies on cell carriers’ ability to track your geographic location so that targeted warning messages can be sent to your phone depending on where it is you are at the moment. Also, as far as I can tell from [the FCC’s fact sheet](http://docs.google.com/viewer?url=http://www.fcc.gov/Daily_Releases/Daily_Business/2011/db0510/DOC-306417A2.pdf), you’re automatically signed up for the system when you buy a phone and you cannot opt-out of presidential messages. I wonder if we’ll see a congressional hearing on the use of geo data without consumer consent?

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The FCC’s data roaming order as musical theater

by on May 5, 2011 · 1 comment

For Forbes.com this morning, I take a close look at last month’s controversial FCC order requiring facilities-based wireless carriers to negotiate data roaming agreements with other carriers.

There are business, technical, and legal reasons why the order stands on unsteady ground, which the article looks at in detail.

The order, by encouraging artificial competition in nationwide mobile broadband, could also undermine arguments against AT&T’s merger with T-Mobile USA.

How so?  If every regional, local, or rural carrier can offer their customers access to the nationwide coverage of Verizon, AT&T, or Sprint, on terms overseen for “commercial reasonableness” by the FCC, what’s the risk of consumer harm from combining AT&T and T-Mobile’s infrastructure?  Indeed, doing so would create stronger nationwide 3G and 4G networks for other carriers to use.  In that sense, it’s actually pro-competitive, and a pragmatic solution to spectrum exhaustion. Continue reading →

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What is the state of wireless competition?

by on May 3, 2011 · 1 comment

With news today that the Department of Justice is [extending its probe](http://thehill.com/blogs/hillicon-valley/technology/158909-justice-department-extends-atat-probe) of the AT&T – T-Mobile merger, and that the FCC [has received](http://www.washingtonpost.com/blogs/post-tech/post/consumers_give_fcc_an_earful_on_atandt_bid_to_buy_t_mobile/2011/05/02/AFX0VScF_blog.html) thousands of comments on the issue, the FCC’s hopefully soon to be release Wireless Competition Report is taking on even greater importance.

Last year’s report was [the first in 15 years not to find the market “effectively competitive.”](http://techliberation.com/2010/05/21/the-underlying-desperation-at-the-fcc/) As a result, expectations are high for the new annual report. How it determines the state of competition in the wireless market could affect regulatory policy and how the Commission looks at mergers.

Join the Mercatus Center at George Mason University’s [Technology Policy Program](http://mercatus.org/technology-policy-program) for a discussion of these issues, including:

– What does a proper analysis of wireless competition look like?
– What should we expect from the FCC’s report this year?
– How should the FCC address competition in the future?

Our panel will feature [**Thomas W. Hazlett**](http://mason.gmu.edu/~thazlett/), Professor of Law & Economics, George Mason University School of Law; [**Joshua D. Wright**](http://mason.gmu.edu/~jwrightg/), Assistant Professor of Law, George Mason University School of Law; [**Robert M. Frieden**](http://comm.psu.edu/people/rmf5), Professor of Telecommunications & Law, Penn State University; and [**Harold Feld**](http://www.publicknowledge.org/user/1540), Legal Director, Public Knowledge

**When:** Wednesday, May 18, 2011, 4 – 5:30 p.m. (with a reception to follow)

**Where:** George Mason University’s Arlington Campus, just ten minutes from downtown Washington. (Founders Hall, Room 111, 3351 N. Fairfax Drive, Arlington, VA)

To RSVP for yourself and your guests, please contact Megan Gandee at 703-993-4967 or [mmahan@gmu.edu](mailto:mmahan@gmu.edu) no later than May 16, 2011. If you can’t make it to the Mercatus Center, you can watch this discussion live online at mercatus.org.

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Event: The FCC’s Wireless Competition Report: A Preview

by on April 25, 2011 · 0 comments

Every year since 1995, the Federal Communications Commission has released a report on the state of competition in the wireless market, and it will soon release the fifteenth. Last year’s report was [the first not to find the market “effectively competitive.”](http://techliberation.com/2010/05/21/the-underlying-desperation-at-the-fcc/) As a result, expectations are high for the new annual report. How it determines the state of competition in the wireless market could affect regulatory policy and how the Commission looks at proposed mergers

Join the Mercatus Center at George Mason University’s [Technology Policy Program](http://mercatus.org/technology-policy-program) for a discussion of these issues, including:

– What does a proper analysis of wireless competition look like?
– What should we expect from the FCC’s report this year?
– How should the FCC address competition in the future?

Our panel will feature [**Thomas W. Hazlett**](http://mason.gmu.edu/~thazlett/), Professor of Law & Economics, George Mason University School of Law; [**Joshua D. Wright**](http://mason.gmu.edu/~jwrightg/), Assistant Professor of Law, George Mason University School of Law; [**Robert M. Frieden**](http://comm.psu.edu/people/rmf5), Professor of Telecommunications & Law, Penn State University; and [**Harold Feld**](http://www.publicknowledge.org/user/1540), Legal Director, Public Knowledge

**When:** Wednesday, May 18, 2011, 4 – 5:30 p.m. (with a reception to follow)

**Where:** George Mason University’s Arlington Campus, just ten minutes from downtown Washington. (Founders Hall, Room 111, 3351 N. Fairfax Drive, Arlington, VA)

To RSVP for yourself and your guests, please contact Megan Gandee at 703-993-4967 or [mmahan@gmu.edu](mailto:mmahan@gmu.edu) no later than May 16, 2011. If you can’t make it to the Mercatus Center, you can watch this discussion live online at mercatus.org.

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