So why is the FCC proposing to restrict joint marketing agreements among Free-TV distributors in local markets when virtually the entire Pay-TV industry is jointly marketing all of their advertising spots nationwide?
Most conservatives and many prominent thinkers on the left agree that the Communications Act should be updated based on the insight provided by the wireless and Internet protocol revolutions. The fundamental problem with the current legislation is its disparate treatment of competitive communications services. A comprehensive legislative update offers an opportunity to adopt a technologically neutral, consumer focused approach to communications regulation that would maximize competition, investment and innovation.
Though the Federal Communications Commission (FCC) must continue implementing the existing Act while Congress deliberates legislative changes, the agency should avoid creating new regulatory disparities on its own. Yet that is where the agency appears to be heading at its meeting next Monday. Read More
Click here to download the white paper in PDF.
Repurposing Educational Spectrum Resources to Connect America’s Schools and Libraries to Next Generation Internet Services
A 2010 survey commissioned by the Federal Communications Commission (FCC) found that nearly 80% of schools and libraries in the United States lack Internet connectivity that fully meets their current needs. In response, President Obama proposed the ConnectED initiative to provide 99% of American schools and libraries with Internet connectivity at speeds no less than 100 Mbps within the next five years. Most of the funding for this initiative is expected to come from universal service funds administered by the FCC through it E-rate program.
The current level of E-rate funding is far too limited to meet the President’s goal, however, and a substantial increase in universal service funding would threaten the affordability of broadband services in rural areas and to low-income communities. These public interest constraints have prompted the FCC to ask the public for help in identifying additional sources of funding for educational broadband.
Strangely, the FCC has ignored an obvious source of at least $11 billion in educational funding for which the FCC already has ultimate authority: The 117.5 MHz of spectrum allocated for the Educational Broadband Service (EBS) in the 2.5 GHz band. This spectrum was allocated for education over 50 years ago, but has never been fully utilized for its intended purpose. During the last two decades, the FCC permitted Sprint to lease nearly all of this educational spectrum from our schools and use it almost exclusively for Sprint’s commercial purposes. Though Sprint has a legal obligation to provide 5% of the spectrum’s broadband capacity for use by schools holding 2.5 GHz spectrum licenses, a recent study indicates that Sprint is not meeting even this minimal obligation in good faith. Read More
The Federal Communications Commission declared the auction of spectrum in the H block “successful” because (1) it licensed spectrum that could be used to provide mobile wireless service to the public, and (2) it “raised $1.564 billion from spectrum that used to be viewed as almost worthless.” In truth, however, the H block auction was a failure.
Though the auction did license spectrum in exchange for payment, that is not the criteria for a successful spectrum auction — virtually all spectrum auctions would meet this criteria, including the obviously failed C block auction in the PCS band.
To be truly successful, an auction must fulfill the fundamental purpose auctions are intended to serve. Congress authorized the use of “competitive bidding” to assign spectrum to the applicant who values it most highly, who is presumed to be the applicant most likely to provide quality service to the public in a timely manner, while minimizing rent seeking and transaction costs. An auction can serve this purpose only if it actually results in competitive bidding, which is why Congress prohibited the FCC from selling spectrum in the absence of competing applicants.
Based on bidding data and the unusual circumstances surrounding the adoption of its reserve price, the H block auction bears more resemblance to an impermissible “retail sale” of spectrum at a pre-determined price negotiated by the FCC than a “system of competitive bidding” designed to determine which applicant values the H block most highly. As I’ve previously explained in detail, the FCC illegally established an artificially high reserve price of $1.564 billion for the H block as part of a pre-auction bargain with DISH Network, who had committed to pay this price only if the FCC increased the value of DISH’s spectrum holdings in other bands. The FCC granted DISH’s wish, and a result, DISH “won” all of the H block licenses. Read More
The Hill published my op-ed explaining that advertising revenue is the motivation behind the retransmission consent debate. The op-ed is available here.
Sprint’s Chairman, Masayoshi Son, is coming to Washington to explain how wireless competition in the US would be improved if only there were less of it.
After buying Sprint last year for $21.6 billion, he has floated plans to buy T-Mobile. When antitrust officials voiced their concerns about the proposed plan’s potential impact on wireless competition, Son decided to respond with an unusual strategy that goes something like this: The US wireless market isn’t competitive enough, so policymakers need to approve the merger of the third and fourth largest wireless companies in order to improve competition, because going from four nationwide wireless companies to three will make things even more competitive. Got it? Me neither. Read More
I explain why the proposed legislation known as the “Video Choice Act” has more in common with the philosophy of the Pirate Parties International than American consumer protection laws in this op-ed published by the Washington Examiner.