Blog - Page 66

There’s a suspicion that no one really cares about high-definition TV. That’s why broadcasters are planning more local news, more local weather, more local sports, educational and children’s programming – more of everything – in standard-definition. But not without assurances that cable systems will carry the additional channels. Cable systems were built with private capital. And the cable industry is facing a competitive onslaught from the likes of DIRECTV, DISH Network and now SBC, Verizon and others. Yet they would have to allocate up to 6 channels to each local broadcaster if Congress mandates multicast must-carry. The justification for even the current level of must-carry is eroding. Expanding the requirement would simply restrain investment and innovation that much further. If Read More ›

Among the many failures of infrastructure and management in the wake of Hurricane Katrina, the loss of communications contributed mightily to the confusion inside New Orelans and the poor decision making outside. No terrestrial telecom infrastructure can be entirely immune to 140 mile per hour winds and week-long floods. While most mobile phones and land-lines failed, we have reports of sporadic cell phone coverage in the days following the storm/flood. Eight days after the storm, numerous cell sites came back online in New Orleans. Within a week, Bell South reported that its main regional telecom hub in New Orleans was up. Nevertheless, the company estimates $400-600 million in damage to the telecom infrastructure. The big telecom winner coming out of Read More ›

Spectrum auctions were justified as a way for the “public” to receive a “fair portion” of the value of the public spectrum resource. But spectrum auctions are really just another tax which has transferred billions of dollars from the pockets of consumers to the coffers of government. The cost of spectrum licenses is fully reflected in the cost structure, and thus the pricing, of mobile phone service – as it should be. The affordability and availability of mobile phone service suffers as a result. The tendency of some politicians to view spectrum primarily as a tool for balancing the budget is a huge obstacle to affordable and universal broadband. What’s the point? When Congress reconvenes next week, it faces the Read More ›

Economist Jude Wanniski passed away suddenly yesterday at the age of 69. More than any other thinker, Wanniski educated the public about supply-side economics, after learning its key principles from Robert Mundell and Arthur Laffer in the early and mid-1970s. On my bookshelf behind me I have several binders worth of his Supply-Side University essays (written every Friday for the last decade or so) and several copies of his 1978 book The Way the World Works. Wanniski was a key force in the economic debates that led to the election of Ronald Reagan and to the implementation of his successful agenda of tax rate cuts, deregulation, and sound money. In his book he predicted that China was at the dawn Read More ›

Richard Chang, founder and CEO of SMIC, the top new silicon “fab” on the Chinese mainland, plans to give up his Taiwanese citizenship after Taiwan fined him for an “illegal investment” in SMIC in 2000. At a time when most Taiwanese and Chinese recognize and welcome closer ties and more economic integration, there are still many politicians on both sides who stubbornly insist on looking backward. It seems unwise for Taiwan to drive away key people like Richard Chang, who, even though he now operates on the mainland, still can be a friend and benefactor of Taiwan through all sorts of cooperative economic and technological arrangements. I think this is just a blip on a large radar screen showing mostly Read More ›

Congressman Rick Boucher (D-VA) wants Congress to codify a set of Network Neutrality principles and “bestow clear authority” on the FCC to enforce them. Net Neutrality is code for re-regulation. It is a recipe for overturning the Supreme Court’s decision in NCTA v. Brand X Internet Services and for allowing the FCC to apply heavy-handed regulation to every broadband Internet access competitor. Though it may be hard to envision such an outcome under current FCC Chairman Kevin Martin, commissioners and chairmen come and go.
Read More ›

See a former colleague of mine Scott Gottlieb getting slimed by the Seattle Times for — gasp — knowing something about financial markets. Scott used to write the Gilder Biotech Report and the Forbes Medical Technology Report, and he recently went back to the FDA as one of three deputy commissioners. The reporter seems to think that only people who don’t like the pharmaceutical/medical technology industry should work at the FDA. Most people in government have little experience with business and financial markets, and so a Scott Gottlieb here or there is not only not going to hurt anyone but in fact provides a much needed new perspective in an institution that has trailed its foreign counterparts in approving new Read More ›

So now that Google has entered the instant message and voice-over-IP games, adding to the existing 76 million U.S. users of AIM, Yahoo, and MSN Messenger, not to mention Skype‘s 47 million VoIP users and a few million Vonage customers, with robust broadband video conferencing from these web-based applications providers on the way, can we finally agree that the rigid price ceilings and floors and geographic pricing layers and cross-subsidies for traditional voice telephony administered by the 51 state utility commissions are no longer operative? -Bret Swanson

News that Intel has agreements to deploy Wi-Fi with governments in 13 countries, coupled with (a)burgeoning interest among US municipalities for such deals and (b)rejection of attempts by telephone companies to erect legal barriers to same, all augur a fundamental shift in the structure of teleccom in America, should municipal deployments suceed. (If they fail, everything returns to SQA.) Telephone companies committed the political error of trying to stop deployment outright, arguing that the umpire (regulator) must not also play in the game (of providing local phone service). The argument has merit, but companies whose reputation for customer service is now at rough parity with that for the airlines are in no position to stop politically popular ideas. Better to Read More ›

The companies delivering voice, video and data services rank low in customer satisfaction, reports the Washington Post. Customer service appears to be the primary culprit. The newspaper quotes the following expert opinion: when there is competition and consumer choice, it does get better. Would the cable industry alone have spent almost $100 billion in network upgrades since it was deregulated in 1996 if not to compete against the satellite and phone companies? Competition is here. Customer service may not be as important as it once was, but that’s because customers today can also shop for innovative products and competitive pricing. Gold-plated customer service existed under regulation, when government controlled price and market entry. AT&T emphasized customer service because it was Read More ›