Competition

Kevin J. Martin, politically-savvy and a highly effective chairman of the Federal Communications Commission, has a strong free-market orientation. So why would the New York Times report that the FCC may be on the verge of enacting new regulation which would: Force the largest cable networks to be offered to the rivals of the big cable companies on an individual, rather than packaged, basis; Make it easier for independent programmers, which are often small operations, to lease access to cable channels; and Set a cap on the size of the nation’s largest cable companies so that no company could control more than 30 percent of the market? Martin believes “[i]t is important that we continue to do all we can Read More ›

I want to comment on Adam Thierer’s recent paper, “Unplugging Plug-and-Play Regulation,” which makes several excellent points. Adam briefly summarized his thesis (i.e., there is no need for government “assist” in private standard-setting) here a couple days ago and generated a couple comments. The cable industry and consumer electronics manufacturers are touting competing standards initiatives. The pros and cons of each approach, from a technology perspective, are somewhat bewildering to a non-engineer like myself. But there appears to be one clear difference that matters a lot. Adam points out that under the initiative sponsored by the consumer electronics industry, the FCC would be empowered to play a more active role in establishing interoperability standards for cable platforms in the future. Read More ›

This week the Federal Communications Commission failed to muster 3 votes to deregulate the broadband access services of Qwest Communications, as it has already done for Verizon in early 2006. The nature of the relief we’re talking about is analogous to the commission’s reclassification of DSL as an “information” service rather than a “telecommunications” service in 2005. In both cases, the effect is to free broadband providers from onerous common carrier regulation, allow them to tailor their offerings to customer needs and not be forced to offer their services to competitors at regulated, cost-based rates for resale. To be fair, the relief Verizon got didn’t garner 3 of 5 votes. Verizon’s petition was filed pursuant to Sec. 10 of the Read More ›

This week in the Tech Policy Weekly podcast, Adam Thierer, James Gattuso, Jerry Brito, Tim Lee and I discuss FCC Chairman Kevin Martin’s reported plan to encumber a portion of the 700 MHz band with open access rules sought by Frontline Wireless LLP, Google and others. We react to a statement issued by a top executive at AT&T claiming that the draft FCC order — which none of us have seen — would “simply take one block of the upper 700 band being auctioned to allow an experiment with an alternative open-devices/open applications business model of the type proposed by Google and others,” and that “the proposal does not mandate a wholesale business model in any particular block, nor does Read More ›

Google wants the Federal Communications Commisison to make net neutrality a licensing requirement in the Upper 700 MHz spectrum band — “(1) open applications, (2) open devices, (3) open services, and (4) open access.” According to media reports, FCC Chairman Kevin Martin is circulating draft rules which would impose such a requirement (see: this, this and this). What’s Martin’s agenda? I suspect he thinks he’s come up with a brilliant strategic maneuver — give Google the chance to acquire a nationwide broadband wireless footprint on the cheap and maybe the company will give up funding the advocates of net neutrality regulation. AOL ended its support for open access the minute it merged with Time Warner, didn’t it? But as we Read More ›

Rep. Ed Markey Rep. Ed Markey (D-MA), chairman of the House subcommittee on telecommunications, wants the Federal Communications Commission to re-regulate “dedicated special access” services (the telephone services provided to businesses and institutions, as opposed to residential customers). He recently sent a letter to the five commissioners, which said: My concern is that significant concentration in the special access market through mergers and bankruptcies, combined with the [FCC’s] deregulatory pricing regime, has resulted in higher prices and little competitive choice for special access connections. These are also the conclusions of a November 2006 Report by the General [sic] Accountability Office (“GAO”) …. I respectfully request each of you to respond to me by close of business on June 11, 2007, Read More ›

The Supreme Court rejected the argument that a conspiracy in restraint of trade can be inferred from the parallel behavior of competitors. As to the ILECs’ supposed agreement to disobey the 1996 Act and thwart the CLECs’ attempts to compete, the District Court correctly found that nothing in the complaint intimates that resisting the upstarts was anything more than the natural, unilateral reaction of each ILEC intent on preserving its regional dominance. A contrary ruling would have subjected every business entity to antitrust liability merely because it has a similar business plan as that of its main competitors, thus imposing an “originality for the sake of originality” mandate on the marketplace. The case is Bell Atlantic Corp. v. Twombly, which Read More ›

Japan has 7.2 million all-fiber broadband subscribers who pay $34 per month and incumbent providers NTT East and NTT West have only a 66% market share. According to Takashi Ebihara, a Senior Director in the Corporate Strategy Department at Japan’s NTT East Corp. and currently a Visiting Fellow at the Center for Strategic and International Studies here in Washington, Japan has the “fastest and least expensive” broadband in the world and non-incumbent CLECs have a “reasonable” market share. Ebihara was speaking at the Information Technology and Innovation Foundation, and his presentation can be found here. Ebihara said government strategy played a significant role. Local loop unbundling and line sharing led to fierce competition in DSL, which forced the incumbents to Read More ›

This week in the Tech Policy Weekly podcast, Jerry Brito, Drew Clark, Tim Lee and I discuss patent reform, FreeConference’s antitrust suit against AT&T and e-voting. On patent reform, I observed that the momentum for fundamental reform reminds me in some ways of the eagerness for telecom reform in the mid 1990s. The Telecommunications Act of 1996 created many problems, demonstrating the inevitability of unintended consequences. Meanwhile, the Supreme Court has stepped up to the plate and has a chance to recalibrate the patent system without major reform. I’d like to see what the Supreme Court does, and hope Congress takes it’s time. A long time. I’m not sure what to make of FreeConference v. AT&T. As Tim Lee points Read More ›

A Federal Communications Commission staffer reports that commissioners are considering a 30% cap on the number of households a single cable operator may serve. Multichannel News notes that a cap would primarily affect one company: Citing Kagan Research, Comcast recently told the FCC that it serves 26.2 million subscribers, or 27% of the country’s 96.8 million pay TV subscribers. Under a 30% cap, Comcast could, in a few years, find itself refusing service to customers seeking to sign up for its fast-growing voice-video-data triple-play bundle. The 30% cap would also effectively block Comcast from buying a cable company with more than 3 million subscribers. If cable operators were the only source of video programming, it might make sense to have Read More ›