How much should Google be subsidized?

February 22, 2010 | Filed Under Budget, Business, Computers, Economy/Finances, Free Trade, Google, Inernet, Net Neutrality, Scott Cleland, Taxes, Technology | Comments Off

-By Scott Cleland

Pending FCC policy proposals in the National Broadband Plan and the Open Internet regulation proceeding would vastly expand the implicit multi-billion dollar subsidies Google already enjoys, as by far the largest user of Internet bandwidth and the smallest contributor to the Internet’s cost relative to its use.

Interestingly, the FCC’s largely Google-driven policy proposals effectively would:

Promote Google’s gold-plated, 1 Gigabit broadband vision for the National Broadband Plan at a time of trillion dollar Federal budget deficits;
Recommend a substantial expansion of public subisidies for broadband that would commercially benefit Google most without requiring Google to contribute its fair share to universal broadband service; and
Regulate the Internet for the first time in a way that would result in heavily subsidizing Google’s out-of-control bandwidth usage.

I. Does Google need more subsidies?

Google is one of the most-profitable, fastest-growing, cash-rich companies in the world, with over $10b in annual free cash flow, 17% revenue growth and ~$25b in cash on hand.
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FCC: Forced Access Uneconomics & Selective Math?

February 19, 2010 | Filed Under Budget, Business, Computers, Free Trade, Google, Inernet, Net Neutrality, Scott Cleland, Technology | Comments Off

-By Scott Cleland

The FCC just signaled it is considering requiring forced access and more special access as part of its soon to be released National Broadband Plan.

Colin Crowell, a top aide to FCC Chairman Genachowski told Bloomberg that mandating that competitors lease their facilities to other competitors “has a lot of appeal as part of a national strategy” in order to help small businesses grow and aid job creation.
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FCC Reclassification is Eminent Domain, but with No Just Compensation or Authority

February 7, 2010 | Filed Under Budget, Computers, Democrats/Leftists, Free Trade, Google, Inernet, Net Neutrality, Scott Cleland, Technology | Comments Off

-By Scott Cleland

At core the FCC’s contemplation of reclassifying, or effectively treating, unregulated broadband info services as regulated telecom services, would be tantamount to the FCC declaring “eminent domain” over private broadband providers, i.e. justifying a government takings of private property for public uses, but doing so “without just compensation” or any statutory authority.

The U.S. Constitution’s Fifth Amendment requires: “nor shall private property be taken for public use, without just compensation.”

A gaping missing element in all the FCC’s discussions of all the new “public uses” it envisions for broadband in its pending National Broadband Plan and its proposed preemptive Open Internet regulations is any consideration at all of the potential hundreds of billions of dollars of un-budgeted liability to the U.S. Treasury that could result from the takings of private network property without just compensation — at a time of skyrocketing trillion dollar Federal budget deficits and rapidly mounting public debt.

The FCC appears to be operating under the sweeping and heroic presumption that any prospective FCC regulatory action it may take here is essentially cost-free to the U.S. taxpayer and will be completely shouldered by broadband shareholders; in other words, the Fifth Amendment appears to be irrelevant to FCC decisionmaking.
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GoogleMonitor.com Launches Today

January 31, 2010 | Filed Under Budget, Free Trade, Google, Inernet, Liberals, Net Neutrality, Policy, Scott Cleland, Technology | Comments Off

-By Scott Cleland

Will spotlight Google’s lack of transparency and accountability

WASHINGTON – A new web site designed to make Google more transparent and accountable launched today. GoogleMonitor.com is a crowd-sourcing site which will keep watch on the Web’s top watcher of everyone.

“Google is the most powerful company in the world, dominates the Web’s business model for information discovery and monetization, and watches most everything that happens on the Web,” Scott Cleland of Precursor LLC and GoogleMonitor.com’s publisher said. “Given all that un-checked power, Google has a dangerous dearth of transparency and accountability.”
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Unintended Consequences: Balkanizing the Internet

January 15, 2010 | Filed Under Business, Capitalism, Computers, Congress, Democrats/Leftists, Economy/Finances, Google, Inernet, Scott Cleland, Society/Culture, State Government, Taxes, Technology | Comments Off

-By Scott Cleland

The big missing part of the policy debate over how to best ensure continuation of an open Internet, i.e. through existing policy or the FCC’s proposed preemptive regulations, is what makes the Internet universal?

The Internet is near universal because it is entirely voluntary. All of the Internet’s signature elements are voluntary, not mandated by government(s).

Internet Protocol (IP) is a networking protocol that became universal precisely because it offered the ability for everyone to communicate in basically the same “language.” No one was required to use/adopt IP; people voluntarily adopted it because it was better and offered the most universal networking opportunity. Moreover, the Internet Engineering Task Force (IETF), whose “mission is to make the Internet work better,” is an entirely voluntary collaborative process that functions outside of any government(s) control.

The Domain Name System (DNS), essentially the Internet’s address system, rapidly became universal precisely because people voluntarily recognized its essential value and adopted it. No country owns, controls or approves the Internet’s addresses; it’s a voluntary market process.
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DOJ Rejects Broadband Market Failure Thesis

January 10, 2010 | Filed Under Budget, Business, Capitalism, Congress, Economy/Finances, Free Trade, Freedom, Google, Government, Corruption, Inernet, Jobs, Liberals, Net Neutrality, Scott Cleland, Socialism, Society/Culture, Taxes, Technology | Comments Off

-By Scott Cleland

In a filing to the FCC on the National Broadband Plan, the DOJ Antitrust Division, the U.S Government’s leading expert in assessing the state of competition in communications markets, implicitly rejected net neutrality proponents’ core thesis of broadband market failure.

This DOJ filing, which represents the most recent U.S. Government expert assessment of broadband competition, could make it extremely difficult for the FCC to legitimately conclude in the coming months the factual opposite — broadband market failure.

Without a sound factual finding of broadband market failure, it also could be extremely difficult for the FCC to legally justify preemptively mandating common-carrier-like regulations on un-regulated broadband information service providers in the FCC’s pending open Internet proceeding.

Let’s review the DOJ’s core broadband competitive conclusions, which are relevant to the alleged broadband market failure thesis and the FCC’s open Internet proceeding.
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Google’s Open Double Standard: Fact-Checking Google’s Treatise on “The meaning of open”

December 27, 2009 | Filed Under Budget, Business, Capitalism, Computers, Democrats/Leftists, Economy/Finances, Google, Government, Corruption, Inernet, Liberals, Net Neutrality, Scott Cleland, Technology | Comments Off

-By Scott Cleland

Google posted its treatise on “The meaning of open” designed to redefine the word “open” in Google’s image. It is an important read because it is a bay window view into the altruistic way that Google yearns for the world to perceive it.

Like most all of Google’s PR, however, Google’s Treatise on “The meaning of open” may be “the truth” as Google sees it, but it is certainly not “the whole truth and nothing but the truth.”

I. Google’s Open Double Standard

Simply, Google is for “open” wherever it does not have a monopoly or dominant market position, however where it does, as in AdWords, AdSense and search advertising syndication, it is closed, to ensure that its dominance remains impregnable to competitors.
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Googleopoly V — Why the FTC Should Block Google-AdMob

December 22, 2009 | Filed Under Budget, Business, Capitalism, Communism, Computers, Congress, Democrats/Leftists, Economy/Finances, Google, Government, Corruption, Inernet, Liberals, Scott Cleland, Society/Culture, Taxes, Technology | Comments Off

-By Scott Cleland

Below is the abstract of the latest white paper in my five-part “Googleopoly” series of antitrust white papers. The full white paper is at this link and at www.googleopoly.net.

Googleopoly V* — Why the FTC Should Block Google-AdMob

The Top Ten Reasons Why Google-AdMob Would “Substantially Lessen Competition”

Abstract: A Google acquisition of AdMob would eliminate Google’s only substantial rival platform in mobile in-application advertising and catapult Google from an estimated 25% share to over 75% share of this strategic gatekeeper market for monetizing mobile Internet applications. Combined with Google’s search advertising monopoly and dominance of mobile search advertising, Google’s acquisition of AdMob, “the world’s largest mobile advertising marketplace,” would likely tip the broader mobile advertising marketplace from a competitive to a monopoly trajectory. In short, the AdMob acquisition threatens to foreclose competition and facilitate monopoly in a strategic gatekeeper market essential to the Internet economy, which would harm: consumers, developers, advertisers, publishers, smart-phone manufacturers, and broadband providers.
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Critical Gaps in FCC’s Proposed Open Internet Regulations

December 3, 2009 | Filed Under Budget, Business, Capitalism, Computers, Democrats/Leftists, Free Trade, Google, Government, Corruption, Inernet, Liberals, Net Neutrality, Scott Cleland, Society/Culture, Technology | Comments Off

-By Scott Cleland

Like the FCC’s National Broadband Plan task force identified seven critical gaps in the path to the future of universal broadband, the FCC should resolve six identified “critical gaps” in the FCC’s proposed open Internet regulations before moving forward to regulate the Internet for the first time — by dictating Internet access pricing, terms and conditions or dictating what services which businesses can and cannot offer on the Internet.

Here are six critical gaps in the FCC’s proposed open Internet regulations:

Credibility Gap: The FCC isn’t “preserving,” but changing the Internet by regulating it for the first time.
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Is FCC Declaring ‘Open Season’ on Internet Freedom?

November 22, 2009 | Filed Under Barack Obama, Budget, Business, Cable, Computers, Congress, Democrats/Leftists, Economy/Finances, Google, Government, Corruption, House of Representatives, Inernet, Jobs, Liberals, Net Neutrality, Scott Cleland, Socialism, Taxes, Technology, The Law | Comments Off

-By Scott Cleland

The FCC, in proposing to change the definition of an “open Internet” from competition-driven to government-driven is setting a very dangerous precedent, that it is acceptable for countries to preemptively regulate the Internet for what might happen in the future, even if they lack the legitimacy of constitutional or legal authority to do so, or even if there is the thinnest of justification or evidence to support it.

How can we ever hope to influence China, Iran and other undemocratic regimes to provide more Internet access and freedom to their citizens and businesses when our FCC is proposing a radical take back of existing Internet freedoms without legitimate authority or justification?

The grave mistake the FCC is making in the broader international context is claiming that private companies are the primary threat to Internet freedom and free speech, and not governments. History and common sense tell us only Governments have the effective coercive power to dictate real censorship.

The FCC is effectively declaring “open season” on well-established Internet freedoms.
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Google-AdMob’s Antitrust Problems

November 17, 2009 | Filed Under Budget, Business, Capitalism, Computers, Congress, Democrats/Leftists, Economy/Finances, Free Trade, Google, Government, Corruption, Inernet, Liberals, Scott Cleland, Socialism, Society/Culture, Technology | Comments Off

-By Scott Cleland

Google’s acquisition of AdMob, “the world’s largest mobile advertising marketplace,” will receive serious antitrust scrutiny focused on whether the deal lessens competition by extending search advertising monopoly to mobile devices.

Expect the review process to be a magnet for a host of antitrust, competition, and privacy product/services concerns, much like the proposed Google Book settlement has been a magnet for antitrust, competition, and privacy content concerns.

First, Google is misleading with its blanket statement: “We don’t see any regulatory concerns with this deal.”

Not “any” concerns implies Google does not expect: any DOJ/FTC discussion over who reviews the deal; no second request for information; no CIDs (subpoenas); no hearings; or no serious competitor objections that authorities will have to explore. If that is true, why does Google say it could it take “several months” to close?
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Why Google Is Not Neutral

November 13, 2009 | Filed Under Anti-Americanism, Business, Cable, Capitalism, Computers, Congress, Economy/Finances, Entertainment, Free Trade, Google, Government, Corruption, Inernet, Liberals, Net Neutrality, Scott Cleland, Society/Culture, Taxes, Technology | 2 Comments

-By Scott Cleland

After discussing whether Google should buy The New York Times, Google decided against it because it “would damage its ‘neutral’ identity,” per Ken Auletta’s just-published book “Googled: The End of The World as We know It.”

Google has long claimed to be neutral. Their corporate philosophy statement claims: “We never manipulate rankings to put our partners higher in our search results and no one can buy better PageRank. Our users trust our objectivity and no short-term gain could ever justify breaching that trust.”

As the world-leading corporate proponent of an industrial policy to mandate net neutrality for all its potential broadband competitors in cloud computing, and as the beneficiary of “The Google Loophole” in the FCC’s proposed open Internet regulations (para 104), it is fair to stress test whether Google’s claim of a “neutral’ identity is true or just cleverly-executed PR.

Is Google Neutral?
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How FCC Regulation Would Change the Internet

November 6, 2009 | Filed Under 1st Amendment, Business, Capitalism, Computers, Congress, Democrats/Leftists, Economy/Finances, Free Trade, Freedom, Google, Government, Corruption, Inernet, Liberals, Media Bias, Net Neutrality, Scott Cleland, Society/Culture, Taxes, Technology | Comments Off

-By Scott Cleland

The FCC’s claims that their proposed net neutrality regulations would just “preserve” the open Internet are simply not true. The facts clearly state that the FCC’s proposed regulations would: Be a big change in FCC Internet policy; Implement big Internet policy changes without Congressional authorization; and Change the Internet in big ways. (The one-page PDF version of this post is here)

The FCC’s proposed net neutrality regs are a big change in FCC Internet policy; they would:

Replace the FCC’s voluntary net neutrality guidelines with mandated net neutrality regulations;
Selectively apply net neutrality regulations to only broadband and not to applications/content providers like the current principles do;
Add two completely new net neutrality principles that are not found in law or congressional policy:
Mandate the strictest non-discrimination requirement in the last 75 years;
Mandate public disclosure of detailed proprietary network management techniques for the first time;
Expand application of net neutrality to wireless and satellite broadband for the very first time;
Expand consumers access to content entitlement by adding entitlement to send/distribute content as well;
Redefine entitlement to competition in the current fourth principle, to favor resale competition over facilities-based competition;
Subject broadband companies to a new “Mother-may-I” FCC approval process for offering new managed services and for experimenting with new business models; and
Subordinate private standard-setting bodies, like the IETF, to new FCC omni-technical oversight/approval.

Takeaways from FCC’s Proposed Open Internet Regs

October 28, 2009 | Filed Under Budget, Business, Capitalism, Computers, Congress, Democrats/Leftists, Google, Government, Corruption, Inernet, Liberals, Scott Cleland, Technology | Comments Off

-By Scott Cleland

The FCC’s proposed Open Internet regulations (NPRM) are sweeping and audacious.

First, the FCC proposed rules are audaciously attempting to implement the introduced-but-never-passed Markey bill (HR 3458) entitled: the “Internet Freedom Preservation Act of 2009.” The purpose, premises, language and core positions are nearly identical for anyone willing to forensically compare the NPRM and HR 3458.

This presents a substantial legal problem for the FCC in that the premises and justifications undergirding their current NPRM can be found nowhere in existing law as the FCC’s own thin 28 line legal justification confirms (paras 83-87).
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Open Un-Neutrality – Will FCC Re-Distribute Internet Opportunity? For Consumers? Businesses? Investors?

October 24, 2009 | Filed Under Business, Computers, Congress, Democrats/Leftists, Economy/Finances, Free Trade, Google, Government, Corruption, Inernet, Liberals, Scott Cleland, Society/Culture, Technology | Comments Off

-By Scott Cleland

In effectively reversing fifteen years of bipartisan U.S. communications policy from promoting competition and reducing regulation to promoting regulation and reducing competition, the FCC’s coming “Open Internet” regulations are anything but neutral; they pick sides and strongly skew outcomes.

First, the FCC is proposing new preemptive business bans mid-game, the harshest, most disruptive form of economic regulation possible.
Second, the FCC is arbitrarily discriminating among increasingly similar and converging businesses, resulting in the arbitrary punishment of some businesses for what they allegedly might do, while rewarding others with protection from competition for what they allegedly might not do.
Third, the FCC is arbitrarily mandating one-way technology convergence without any supportable justification, i.e., banning distribution convergence into applications/content, while encouraging application/content convergence into distribution.

The chaotic result of this “open un-neutrality” will be regulation that is increasingly at war with inexorable technological convergence and economic efficiency — requiring ever-increasing FCC regulatory artifices to keep the Internet’s original technological layers, market segments and business models from naturally converging, evolving and competing.
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“Systemic Risk Laundering” — Financial Crisis Root Causes — Part II

September 17, 2009 | Filed Under Budget, Business, Capitalism, Computers, Congress, Democrats/Leftists, Economy/Finances, Google, Government, Corruption, Inernet, Liberals, Scott Cleland, Society/Culture, Taxes, Technology | Comments Off

-By Scott Cleland

How could American taxpayers get stuck with a multi-trillion dollar tab that they weren’t even aware that they were running up? How could that huge tab still be allowed to run up unchecked today? For the Financial Crisis Inquiry Commission, the sad answer is one of the biggest root causes of last fall’s devastating financial crisis and one of the biggest continuing systemic risks to the financial system and the economic recovery.

A decade ago, in what may prove to be the most expensive bipartisan legislative mistake in U.S. history, a bipartisan policy became law that effectively ensured that no Federal regulator had oversight or enforcement jurisdiction over derivative financial instruments. The Commodity Futures Modernization Act of 2000 (CFMA) created “legal certainty for excluded derivative transactions.” That law allowed a shadow derivative overlay system to be built literally on top of the public financial system, with none of the inherent accountability of the underlying financial system. In other words, a deliberate bipartisan U.S. government policy change a decade ago unwittingly created an unaccountable “black hole” market that sucked enormous value out of public markets (Bear Stearns, Lehman, AIG, Fannie, Freddie, securitized sub-prime mortgages, etc.), while laundering the risk to the U.S. taxpayer.

Simply, in fostering an unaccountable marketplace that derived all its real value from public markets, the Government fostered systemic risk laundering from the unaccountable to the accountable, which ultimately left the U.S. taxpayer holding the bag. More specifically, with no accountability to fairly represent or disclose risk, too many did not. Too many figured out that they could launder huge financial risk with impunity, because most public investors assumed someone somewhere was ensuring that these derivative instruments were fairly represented, disclosed and accountable. Oops!
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Defining the Problem(s) is the Crux of the National Broadband Plan

July 29, 2009 | Filed Under Anti-Americanism, Congress, Democrats/Leftists, Economy/Finances, Google, Government, Corruption, Inernet, Scott Cleland, Society/Culture, Technology | Comments Off

-By Scott Cleland

FCC Broadband Coordinator Blair Levin described the crux of the National Broadband Plan in testifying before the Commission 7-02 as “identifying where there are currently ‘demonstrable public interest harms.’” That central task is essentially defining the problem(s) and is necessary to complete the last task of the plan: “identifying ways to lessen those public interest harms,” or recommending solutions. Defining the problem largely defines the range of recommended solutions.

The plural use of “harms” here suggests that the Plan could end up “identifying” more problems than the obvious core problem prompting the Plan — that not “all people of the United States have access to broadband capability.”

Levin’s choice of a classic organizational structure, background-problem-solution, is a wise, useful and simplifying approach for such an exceedingly complex endeavor.
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Handset Exclusives Drive Growth & Broadband Adoption

July 8, 2009 | Filed Under Congress, Google, Government, Corruption, Inernet, Liberals, Scott Cleland, Technology | Comments Off

-By Scott Cleland

Why regulate tech/computer sales?

Handset marketing exclusives are a pro-competitive wellspring of wireless growth and broadband adoption. Marketing exclusives are also a legitimate, proven and widespread marketing practice that marshals maximum marketing resources for selected, potentially-hot-new-products in order to drive maximum sales and adoption.

Pro-regulation proposals calling for the FCC to ban smartphone/netbook marketing exclusives are unnecessary, and would also be highly counter-productive as they would undermine the Government’s important goals of stimulating the economy and promoting broadband adoption.
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YouTube’s ‘How To’ on Citizen Journalism Filled With Lefty Media Types, No Conservatives

July 1, 2009 | Filed Under Anti-Americanism, Conservatives, Democrats/Leftists, Free Speech, Google, Inernet, Journalism, Liberals, Media Bias, Society/Culture, Warner Todd Huston, YouTube | Comments Off

-By Warner Todd Huston

Apparently, YouTube doesn’t think that a conservative journalist has anything to say to help all you budding citizen journalists out there. A glance at the denizens of the Old Media offered up as journalism experts on the Internet video giant will show a long list of well known lefties with not a single center or center right professional in the mix.

On April 30, YouTube set up a channel dedicated to a sort of how-to instruction manual or an online media 101 class that folks interested in becoming citizen journalists can watch to help them learn some of the tricks of the Media trade. Ostensibly, this will help the average, every day blogger present his work in a more professional way. This is a great idea, by the way. Many blogs could use some tips on better writing and presentation, interview skills, and video presentation if not an occasional editor — and I should know on that last one!

But it seems that no one that represents the center-right in the world of journalism seems to qualify as an expert as far as Google’s YouTube is concerned. Going to the main page will reveal a whole bunch of lefty jurnos offering you their help. Not only do we get the advice from the heavily left-slanted Chris Cillizza, NPR or Katie Couric, but YouTube even offers “advice” from AlJazeera’s Riz Kahn, for Pete’s sake!

Imagine, AlJeazeera on journalistic professionalism!

My House Internet Privacy Testimony — ‘a consumer-driven, technology/competition neutral privacy framework’

June 21, 2009 | Filed Under Budget, Business, Congress, Democrats/Leftists, Economy/Finances, Free Trade, Google, Inernet, Liberals, Scott Cleland, Technology | 1 Comment

-By Scott Cleland

Today I testified before a Joint House Subcommittee hearing of the Energy & Commerce Committee on “The Potential Privacy Implications of Behavioral Advertising.”

A one-page summary is below and the full testimony is here.

Summary Testimony of Scott Cleland, President, Precursor LLC

“Why A Consumer-Driven, Technology/Competition-Neutral, Privacy Framework Is Superior to a Default ‘Finders Keepers Losers Weepers’ Privacy Framework”

Before the Joint House Energy & Commerce Hearing on Behavioral Advertising, June 18, 2009
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The National Broadband Plan “Fork-in-the-Road”

June 15, 2009 | Filed Under Business, Congress, Democrats/Leftists, Free Trade, Google, Government, Corruption, Inernet, Scott Cleland, Society/Culture, Technology | Comments Off

-By Scott Cleland

A scan of the major comments just delivered to the FCC on the National Broadband Plan (which is due to Congress February 2010), spotlighted the big broadband policy “fork-in-the-road” decision that the FCC now has before it.

One road of the fork-in-the-road continues down the road of: Promoting facilities-based competition;Encouraging private investment in a wide diversity of technologies; and Facilitating a cooperative public-private partnership to address unserved broadband areas and lagging adoption of widely available broadband.
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On D-Day Anniversary, Google Memorializes… Tetris?

June 6, 2009 | Filed Under Anti-Americanism, Democrats/Leftists, Foreign Policy, Google, Government, Corruption, History, Liberals, Media Bias, Society/Culture, Warner Todd Huston | Comments Off

-By Warner Todd Huston

It was June 6, 1944 that the crucial Normandy Landings occurred that formed the spearhead of the Allied invasion of Nazi held Europe. D-Day ultimately led to the victory of the Allies over the despotic Nazi regime. Now here we are on June 6, 2009 and, in its inimitable way, Google has decided to memorialize the important occasion by adding an image on its homepage depicting… the computer game Tetris.

Yes, it’s far more important to Google to celebrate the anniversary of the invention of the video game Tetris than to memorialize D-Day. It just warms the heart, doesn’t it?

I have to say, though, that this is no departure for Google, a firm that finds it nearly impossible to post images celebrating any American holidays or important milestones in American history. So, what we have here is just one more example of Google’s essentially anti-American policies.

Why New WH Cybersecurity Focus is a Game-Changer — for the Internet and Net Neutrality

June 6, 2009 | Filed Under Anti-Americanism, Barack Obama, Business, Censorship, Democrats/Leftists, Economy/Finances, Free Speech, Free Trade, Google, Government, Corruption, Inernet, Journalism, Liberals, Media Bias, President, Scott Cleland, Security/Safety, Socialism, Society/Culture, Technology | Comments Off

-By Scott Cleland

President Obama’s new approach to cybersecurity likely is more of an Internet game-changer than many appreciate. Initial reporting and commentary has been superficial and has not connected dots or analyzed the broader logical implications of this new policy emphasis and trajectory.

Why is it a game-changer for the Internet?

First, it formalizes a new leading priority for the Internet.
Second, it formalizes the lack of cybersecurity as the Internet’s leading problem.
Third, it practically redefines what “open Internet” means.
Fourth, it practically takes any extreme form of net neutrality off the table.

Moreover, the new cybersecurity focus will likely have a practical effect on the trajectory of Internet 3.0, which embodies cloud computing (where security has not been a primary priority by many); the Mobile web (where security has always been a very high priority); and the Internet of Things (where security will be imperative to prevent theft, intrusion, and sabotage).

EC declares “no need for State intervention” in broadband duopoly

June 3, 2009 | Filed Under Congress, Democrats/Leftists, Economy/Finances, Google, Government, Corruption, Inernet, Scott Cleland, Society/Culture, Taxes, Technology | Comments Off

…because there’s no market failure

-By Scott Cleland

In a significant blow to U.S. advocates of Government-mandated open access networks — over facilities-based broadband network competition — the European Commission (EC) just declared “no need for State intervention” in geographic zones where there are at least two facilities-based broadband network competitors, because that means “there is no market failure.”

The EC made the declaration in its just-released report: “Community Guidelines for the application of State aid rules in relation to rapid deployment of broadband networks.” This is the EC guidance for spending economic stimulus funds for promoting broadband.

Latest Data: US No Longer Falling Behind on Broadband

May 26, 2009 | Filed Under Business, Democrats/Leftists, Economy/Finances, Google, Government, Corruption, Inernet, Liberals, Scott Cleland, Society/Culture, Technology | Comments Off

-By Scott Cleland

The latest data from the OECD and other sources indicate that the U.S. is no longer falling behind the rest of the world in broadband.

These latest data are relevant to assumptions underlying the FCC’s National Broadband Strategy due to Congress next February and also to broadband policymakers’ interest in more data-driven policymaking.

In particular, the OECD broadband rankings have been prominently cited by some as important evidence to justify a reversal of current facilities-based broadband competition policy, in favor of a more government-centered broadband policy.
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Why the Australian “Fiber Mae” Broadband Model Doesn’t Work for the U.S.

May 18, 2009 | Filed Under Business, Democrats/Leftists, Economy/Finances, Google, Government, Corruption, Inernet, Jobs, Liberals, Scott Cleland, Society/Culture, Technology | Comments Off

-By Scott Cleland

As the FCC lays the groundwork for its submission of a National Broadband Strategy to Congress next February, some suggest the U.S. follow the lead of Australia’s new broadband policy model. While it may have superficial and nostalgic appeal to some, upon close scrutiny and analysis it is not an applicable, practical nor sound broadband policy option for the United States for a variety of reasons. The Australian “Fiber Mae” broadband policy model is:

Not applicable to the U.S. because the ownership and competitive baselines in Australia and the U.S. are not analogous;
Not practical for the U.S. because it is a hugely expensive proposal in an exceedingly tight budget/financial environment that would generate very little incremental additional benefit over the current competitive trajectory; and
Not sound policy for the U.S. because it pursues the wrong policy emphasis and structure, which could have the perverse result of the U.S. falling behind in broadband leadership — the exact opposite of the intended result.

By way of background, the Australian government announced last month that it would establish “a new company to build and operate a new super-fast National Broadband Network.” The proposal would deploy fiber to the home to 90% of users with 100 Mbs, and deploy 12 Mbs wireless technology to the remaining 10% of the country, at an estimated total cost of ~$31b or ~$4,100 per home passed. This government-sponsored enterprise would be majority-owned by the Australian government. It would create “Australia’s first national wholesale only, open access broadband network.”
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The Broader Implications of DOJ’s Book Settlement Investigation

May 5, 2009 | Filed Under Business, Congress, Democrats/Leftists, Economy/Finances, Google, Government, Corruption, Inernet, Liberals, Scott Cleland, Society/Culture, Technology | Comments Off

-By Scott Cleland

The DOJ investigation of the Google Book Settlement suggests that a broader antitrust spotlight may be returning to Google.

Apparently the DOJ is investigating whether the Book Settlement sets a competitive or anti-competitive trajectory for the search of digitized books, and of “orphan” works in particular.

Google argues the settlement is pro-competitive and increases access to books.

The DOJ’s antitrust investigative scrutiny suggests otherwise.
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Implications of Skype’s IPO for eBay-Skype & Wireless Net Neutrality

April 22, 2009 | Filed Under Business, Congress, Democrats/Leftists, Economy/Finances, Google, Government, Corruption, Inernet, Scott Cleland, Society/Culture, Technology | Comments Off

-By Scott Cleland

Given that eBay’s announced spin-off/IPO of Skype in 2010 is a material market event, this high-profile IPO represents a potentially tectonic development in eBay-Skype’s (and FreePress‘) push for wireless net neutrality/Carterfone regulations and applying the FCC’s broadband principles to wireless providers for the first time. There are much broader implications of this market development than many appreciate.

Some brief background information is helpful to understand the broader implications:

Reports suggest that eBay’s plans for a public IPO in 2010 are a result of eBay not being able to get a high enough private market price ($1.7b) for Skype and the fact that current market conditions are not ripe for initial public offerings. (eBay originally paid $2.6b for Skype and added an additional $500m later, then subsequently wrote down $1.4b of Skype’s value.)
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Skype’s Anti-competitive Uneconomics

April 11, 2009 | Filed Under Business, Congress, Democrats/Leftists, Economy/Finances, Google, Government, Corruption, Inernet, Liberals, Media Bias, Scott Cleland, Socialism, Society/Culture, Technology | Comments Off

-By Scott Cleland

There are two primary problems with eBay-Skype’s attempt to get the Government to force competitive wireless providers to carry Skype’s free communications app under the guise of wireless net neutrality and Internet openness: first, it is wildly uneconomic, and second, it is anti-competitive.

The issue has surfaced in the news (USAToday, WSJ) as Apple enabled a Skype app on the iPhone for use on free public WiFi networks, but not on the iphone’s commercial network provided by AT&T; and again when Google’s Android banned a tethering app because it violated T-Mobile’s terms of service as reported by CNET.
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Building upon a Strong Broadband Foundation — Part I in America’s Broadband Strengths Series

April 4, 2009 | Filed Under Business, Censorship, Congress, Crime, Economy/Finances, Google, Government, Corruption, Inernet, Jobs, Liberals, Media Bias, Scott Cleland, Socialism, Taxes, Technology | Comments Off

-By Scott Cleland

The combination of the severe recession and Congress’ requirement for the FCC to devise a National Broadband Strategy provides an excellent opportunity to inventory not only weaknesses, but also the many strengths, of the broadband sector and economy. Comprehensive analysis shows much that is going well that mustn’t be taken for granted in any new broadband plans. Unlike many other sectors of the economy, the American broadband sector is:

An exceptionally strong foundation to build upon;
On the right track with much positive momentum; and
Partnering to solve many of society’s most pressing problems.

I. Strong Foundation to Build Upon

America’s competitive broadband market has an exceptionally strong foundation of positives on which to build upon, enhance, expand and supplement.
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