Scott Cleland

Business - Capitalism - Computers - Democrats/Leftists - Free Trade - Google - Inernet - Net Neutrality - Regulation - Scott Cleland - Technology

EU’s Regulated Mobile Prices Higher than US Competitive Mobile Prices

June 1, 2012 by

-By Scott Cleland

The EU’s latest round of mobile price regulation provides a golden opportunity to show how market competition produces much better results for consumers than government price regulation. Ironically, the European Parliament voted this week to lower mobile roaming charges by mid-2014 to levels that will still be much higher than America’s competitive wireless market prices are today.

Per New York Times reports, the EU mandated price for making a roaming mobile voice call will be reset from 35 cents a minute today to 19 cents a minute by mid-2014, and the price for receiving a roaming mobile voice call will be reset from 11 cents a minute today to 5 cents by mid-2014. Putting this in perspective, Recon Analytics’ research shows that Americans pay 4.9 cents a minute vs. 16.7 cents a minute for Europeans — ~70% less; and because of these dramatically lower American wireless prices, Americans consumers use more than twice as much wireless as Europeans, 875 minutes of use per month vs. 418 minutes for Europeans. Simply, the EU’s ~50% mandated price reductions will still have European consumers paying much more for mobile usage even if one incorrectly were to assume that competition won’t further lower the market price for American consumers like it has every year.
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EU’s Regulated Mobile Prices Higher than US Competitive Mobile Prices”

Budget - Business - Computers - Democrats/Leftists - Ethics - Free Trade - Google - Inernet - Jobs - Liberals - Net Neutrality - Regulation - Scott Cleland - Taxes - Technology

Netflix’ Net Neutrality Corporate Welfare Plan

May 26, 2012 by

-By Scott Cleland

Apparently Netflix is angling to become Silicon Valley’s king of corporate welfare. We learn from a New York Times economics column advocating for an Internet industrial policy that “Netflix is trying to build a coalition of businesses to make the case for… net neutrality.” And that the “online video powerhouse Netflix started a political action committee to complement a budding lobbying effort in support of the idea that all content must be allowed to travel through the Internet on equal terms” — translation: always at no cost to Netflix.

But Netflix isn’t in need of public assistance; it is America’s video subscription leader with 23 million subscribers. Netflix has $3.3b in annual revenues, $1.2b in gross profits, $800m in cash, a 34% return on equity, and a market valuation multiple over twice the market’s. And Netflix flexed its exceptional pricing power last year in raising its prices 60% without losing many subscribers.

Netflix’ net neutrality plan is a shameless Washington plea for corporate welfare via Government price regulation of privately-owned broadband networks so… Netflix’ uniquely voracious 33% usage of the Internet’s traffic peak does not cost Netflix anything! Greedily, Netflix is asserting that it somehow has an inalienable “right” to forever gorge on nearly a third of the Internet’s peak capacity without any obligation, responsibility or expectation to either responsibly use, or contribute to the cost of operating or investing in, the Internet infrastructure that they use more than any entity.
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Netflix’ Net Neutrality Corporate Welfare Plan”

Business - Capitalism - Computers - Congress - Democrats/Leftists - Google - Government - Inernet - Jobs - Liberals - Net Neutrality - Regulation - Scott Cleland - Taxes - Technology

Verizon-Cable Opponents Goading FCC to Overreach its Authority Again — Part 9 of Series

May 17, 2012 by

-By Scott Cleland

Opponents urging the FCC to block the Verizon-Cable secondary market spectrum transaction are pushing the FCC into dangerous institutional territory, effectively goading it to: overreach its statutory authority; ignore FCC precedent, evidence, and facts; and game its own spectrum-screen process. The same FreePress radical fringe — that goaded the FCC to flout the D.C. Appeals Court decision and pass the Open Internet Order and Data-Roaming Order — are at it again.

The FreePress radical fringe who care not for the rule of law, are again goading the FCC to trump up some new public interest rationale and statutory theory to allow the FCC to transmogrify its limited public interest authority into unbounded authority that disregards the law, FCC precedent, or the facts. This radical manipulation of the process may be good for forwarding FreePress’ anti-business, Internet commons goals, but it is not good for the institution of the FCC, which is a creature of Congress and subject to the rule of law. And nor is it good for the American public.

The FreePress coalition appreciates that the FCC is in search of relevance in the broadband Internet era, and is preying on that uncertainty to goad the FCC to re-imagine its own legal authority by declaring broadband a Title II common carrier service and/or by interpreting their limited public interest authority boundlessly. If the FCC determines it needs new authority, it must seek it from Congress.
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Verizon-Cable Opponents Goading FCC to Overreach its Authority Again — Part 9 of Series”

Dr. Don Boys - Google - Inernet - New Media - Scott Cleland - Technology - Twitter

Google’s Poor & Defiant Settlement Record

May 15, 2012 by

-By Scott Cleland

Google’s poor and defiant track record in respecting government agreements and settlements is likely one of the reasons the FTC hired an undefeated former Federal prosecutor and litigator to lead their Google antitrust probe and potential litigation against Google. The EU and the FTC are naturally exceptionally skeptical about negotiating an antitrust settlement with Google, given the substantial evidence that shows Google is consistently less-than-trustworthy in abiding by its agreements with Governments.

Specifically, the evidence shows that Google has not abided by either of its privacy agreements with the FTC concerning Street-View WiSpy or Google-Buzz, nor has Google fully-abided by its criminal Non-Prosecution-Agreement with the DOJ concerning its advertising of illegal prescription drug imports. In addition, Google attempted to broadly game the justice system in negotiating a Google Book Settlement that would have rewarded it with a partial monopoly for its mass copyright infringement.
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Google’s Poor & Defiant Settlement Record”

Blogging - Budget - Business - Capitalism - Computers - Crony Capitalism - Democrats/Leftists - Economy/Finances - Ethics - Government - Inernet - Jobs - Net Neutrality - New Media - Scott Cleland - Technology

‘Leaf’ Vision & Broadband Usage Caps

May 10, 2012 by

-By Scott Cleland

Near hysterical opponents of broadband data usage caps need to breathe slowly, drop their magnifying glass, look up and take in the big world all around them. They are not just missing the forest for the trees, they are missing the leaves, stems, branches, trees, forest and sky, because they can’t take their magnifying glass off of the leaf with which they are myopically obsessed.

Broadband data usage caps are a very small, normal, and essential part of a healthy and economically-sustainable Internet ecosystem. Pricing is the central mechanism for any marketplace to balance supply and demand and to create economic incentives and disincentives for behavior that can drive costs. There is nothing wrong with pricing caps, tiers, and other pricing mechanisms that are used to manage networks, avoid network congestion, achieve a return on investment, manage a business model, differentiate a business, and/or earn a profit.

Does an average consumer get indignant when an all-you-can-eat buffet limits them from: piling food on a tray and not a plate; sharing their food with someone who hasn’t paid; or putting it in a bag to take home? No. Does an average consumer expect to be able to run their AC at max 24-7 during a heat wave when the system is at peak usage? No. Does an average consumer imagine that they can pay a flat rate for water, electricity, or gasoline, and then consume it without any usage limit or extra payment for high-usage? No. Most all American consumers understand the most basic economic principle, that if one uses more of a good or a service, one can expect to pay more for it. Only the small but very vocal group of Internet commons radicals that are currently indignant over broadband data usage caps imagine that broadband communications should somehow be a public unlimited free good.
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‘Leaf’ Vision & Broadband Usage Caps”

Blogging - Computers - Google - Inernet - Net Neutrality - Scott Cleland - Technology

Consumer Groups’ Advocacy Hypocrisy

May 8, 2012 by

-By Scott Cleland

Consumer groups by definition, are supposed to be protecting consumers’ interests — not be pushing a special interest political agenda under the guise of the “public interest.” Let’s spotlight a recent and blatant hypocrisy whereby consumer groups near-completely ignored an instance of obvious widespread consumer harm (the FCC’s proposed fine of Google for obstructing its Street View wiretapping investigation), while in another contemporaneous issue, consumer groups gang-pummeled a non-issue to push a political Internet commons agenda (strongly objecting to Comcast’s new market offering where XBox usage does not apply to a user’s 250 Gig monthly data cap.)

Google Street View Wiretapping: Why is Google obstructing a Federal wiretapping investigation affecting the privacy of literally tens of millions of American households’ — not a consumer protection issue? How come consumer groups routinely and loudly call for FCC investigations of broadband companies’ legal marketplace actions, but are silent on the obvious obstruction of a Federal investigation into Google allegedly being involved in potentially the largest wiretapping and mass invasion of citizens’ privacy by a corporation in U.S. history? How is it in consumers’ interest for the government to not be able to determine if Google actually violated Federal law or not?
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Consumer Groups’ Advocacy Hypocrisy”

Business - Capitalism - Computers - Crony Capitalism - Google - Inernet - New Media - Scott Cleland - Technology

Google’s PR Strategy in Advance of the EU’s Monopoly Charges — A Satire

May 3, 2012 by

-By Scott Cleland

Confidential Memorandum:

To: All 11,342 Google PR/Spokespeople

From: Brandi Sparkles, Google PR Chief & Googlerati Whisperer

Subject: PR Statement/Strategy in Advance of EU’s Monopoly Charges

We expect the European Union’s antitrust authority to issue a Statement of Objections against Google shortly, which will charge Google with being a monopoly that anti-competitively ranks its own content #1 while ranking its competitors’ content where few will find them.

So you can help rally the Googlerati in the media to Google’s side and organize a chorus of Google adoration among the masses to make this problem blow over, we are sharing an advance copy of our public statement for public dissemination and also a copy of our confidential PR strategy for this event, so you can be in the know. But remember, this PR strategy is not for public distribution.
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Google’s PR Strategy in Advance of the EU’s Monopoly Charges — A Satire”

Business - Computers - Economy/Finances - Google - Inernet - Net Neutrality - Scott Cleland - Technology

AAI’s Analysis of Verizon-Cable Is Industrial Policy Not Antitrust

April 30, 2012 by

-By Scott Cleland

Reading through The American Antitrust Institute’s white paper on Verizon-Cable, it is striking how little analysis is relevant to antitrust/market-competition and how it is basically a thinly-veiled tacit pitch for the DOJ and the FCC to pursue an aggressive industrial policy for the wireless industry.

The white paper presumes that because the DOJ blocked the AT&T/T-Mobile merger to preserve T-Mobile as a disruptive fourth wireless competitor, and because T-Mobile now claims it needs more spectrum, that the government should intervene somehow to effectively redirect the spectrum to T-Mobile and away from Verizon.

The huge flaw in the AAI’s analysis is its central presumption, which is contrary to longstanding spectrum auction law, that the government, not market forces, should allocate spectrum. The analysis ignores that the law of the land allocates spectrum via property rights and auctions enabling the spectrum to find the party that most economically values it and has the most economic incentive to put it to productive use. The AAI’s analysis appears biased against existing law in assuming that the only or primary reason that the largest wireless providers would want more spectrum would be to anti-competitively keep it from its smaller competitors, and not the obvious and real reason that they want to provide better, faster, more reliable mobile broadband service to more people in more of the country to make more money.
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AAI’s Analysis of Verizon-Cable Is Industrial Policy Not Antitrust”

Capitalism - Computers - Economy/Finances - Inernet - Jobs - Net Neutrality - Scott Cleland - Taxes - Technology

Why Viacom Likely Wins Viacom-Google Copyright Appeal

July 8, 2010 by

-By Scott Cleland

Viacom is ultimately likely to prevail in its appeal of the lower court decision in the seminal Viacom vs. Google-YouTube copyright infringement case.

If one only reads either the lower court’s decision or the press reports of it, without considering likely appellate arguments and the broader constitutional context of copyright protection, it is easy to mis-read the likely ultimate outcome here.

Both sides agreed to an expedited summary judgment process in the lower court because both sides fully expected this case to ultimately be decided at the appellate level, and most likely by the U.S. Supreme Court.
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Why Viacom Likely Wins Viacom-Google Copyright Appeal”

Business - Capitalism - Computers - Economy/Finances - Free Trade - Google - Inernet - Net Neutrality - Scott Cleland - Technology

The FCC’s ‘Blight Touch’ & ‘Muddle Ground’

June 29, 2010 by

-By Scott Cleland

Clearly proponents of net neutrality and public-utility regulation of broadband, have learned how to manipulate language and metaphors to mask and move their agenda; what they haven’t learned is that the language and metaphors used to promote policy changes must be true in order to make legitimate, successful, and lasting public policy.

The communications plan for the FCC’s proposed broadband regulation of the Internet is full of fiction, fantasy and misdirection. What’s increasingly obvious is that proponents of preemptive proscriptive broadband regulation think people are stupid, that they don’t know what words mean and that they will gullibly swallow whatever is said without thought or question.
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The FCC’s ‘Blight Touch’ & ‘Muddle Ground’”

Budget - Business - Capitalism - Computers - Economy/Finances - Google - Inernet - Net Neutrality - Scott Cleland - Taxes - Technology

FCC Broadband “Believe it or Not!”

June 26, 2010 by

-By Scott Cleland

With due credit to “Ripley’s Believe it or Not!®,” so much odd and bizarre is happening at the FCC in the “name” of “broadband” that the topic calls for its own collection of: “Believe it or Not!®” oddities.

The FCC insists that its Title II reclassification effort to regulate broadband networks is not “regulating the Internet,” when the law the Supreme Court and the FCC all define the Internet to include broadband networks!

The FCC, certain that the D.C. Circuit Court decision on Comcast vs. the FCC was incorrect, decided not to appeal to the Supreme Court!

The FCC, an administrative agency created, funded, and overseen by Congress, completely ignored a majority of Members of Congress who wrote the FCC opposing FCC reclassification of broadband as a common carrier!

The FCC plans to justify new broadband Title II regulation with some regulatory forbearance by arguing that the market facts simultaneously warrant both more, and less, broadband regulation — at the very same time!

The FCC claims the “soundest legal foundation” for broadband is the opposite of what the DC Circuit Court, Congress, legal experts and industry think is sound!

The FCC justified pursuing its Title II reclassification effort by characterizing it as the “broad consensus” view, but the non-partisan Association of State Legislatures and a bi-partisan majority of Members of Congress opposed the FCC in writing!

The FCC claims it has an open mind in approaching the Notice of Inquiry, but a majority of FCC votes, are on record already supporting new broadband regulation!

The FCC claims ‘immaculate mis-conception’ to explain how “series of tubes,” the FCC appears intent on officially declaring the Internet a series of telephone lines!

Strange but true.

“Believe it or Not!®”
_________________
Scott Cleland is one of nation’s foremost techcom analysts and experts at the nexus of: capital markets, public policy and techcom industry change. He is widely-respected in industry, government, media and capital markets as a forward thinker, free market proponent, and leading authority on the future of communications. Precursor LLC is an industry research and consulting firm, specializing in the techcom sector, whose mission is to help companies anticipate change for competitive advantage. Cleland is also Chairman of NetCompetition.org, a wholly-owned subsidiary of Precursor LLC and an e-forum on Net Neutrality funded by a wide range of broadband telecom, cable and wireless companies. He previously founded The Precursor Group Inc., which Institutional Investor magazine ranked as the #1 “Best Independent” research firm in communications for two years in a row. His latest op eds can be seen at www.precursorblog.com.

Budget - Business - Capitalism - Computers - Economy/Finances - Google - Inernet - Net Neutrality - Scott Cleland - Technology

FCC & Google’s Extreme Internet Makeover — A Preview

June 24, 2010 by

-By Scott Cleland

At its Thursday meeting, expect the FCC to adopt Google’s PR script to try and better sell the FCC’s upcoming “Extreme Makeover” of Internet regulation.

The centerpiece of the FCC and Google’s “extreme Internet makeover” plan is the creation of an entirely new, Google-inspired, regulatory classification called “Broadband Internet Connectivity Service” or BICS.

The BICS extreme makeover is designed to enable the promotion of integrated “edge” products and services like Google Voice, Google TV and Google’s Chrome/Android operating systems and empower the FCC to implement its National Broadband Plan on its own without additional Congressional authorization or action.

Predictably, the FCC’s Google-oriented-BICS-scheme has three fatal flaws, making it a disaster waiting to happen.
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FCC & Google’s Extreme Internet Makeover — A Preview”

Business - Capitalism - Computers - Democrats/Leftists - Economy/Finances - Google - Government - Inernet - Liberals - Net Neutrality - Regulation - Scott Cleland - Taxes - Technology

Americans want online privacy — per new Zogby poll

June 19, 2010 by

-By Scott Cleland

American consumers clearly want online privacy, per a national poll conducted over the weekend by Zogby International, that was commissioned by Precursor LLC.

In a nutshell, over 80% of Americans are concerned about the security and privacy of their personal information on the Internet; about 90% of Americans consider some common industry behaviors to be unfair business practices; and about 80% of Americans support a variety of stronger consumer protections of their privacy online.
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Americans want online privacy — per new Zogby poll”

Business - Capitalism - Computers - Economy/Finances - Free Trade - Google - Inernet - Net Neutrality - Scott Cleland - Technology

Google’s ‘Total Information Awareness’ Power

June 12, 2010 by

-By Scott Cleland

A one-page graphic of all the information Google has…

To help you picture both the enormity and unprecedented power of what Google knows about you and the world’s information—public, private and proprietary—I have organized all the world’s information types that Google collects onto a one-page chart/PDF: “Google’s ‘Total Information Awareness’ Power.”

For those who really want to understand Google and its impact on most everyone and most everything, please read and study this one-page chart/PDF, because much valuable work and insight has gone into it.

While the chart is visually packed with information that many may find difficult to unpack or digest, the chart itself is an apt metaphor for both how much information Google has, and also how difficult it is for all of us to get our head around all the information Google routinely collects and uses.

A short refresher on where the term “Total Information Awareness” came from and why it is aptly employed here.
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Google’s ‘Total Information Awareness’ Power”

Business - Capitalism - Computers - Economy/Finances - Free Trade - Google - Inernet - Net Neutrality - Scott Cleland - Technology

FCC Exceptionalism and Supremacy?

June 5, 2010 by

-By Scott Cleland

Often stepping back to gain perspective, and to try and see the forest for the trees can be highly instructive. However, if one steps back to see the big picture of how this FCC is attempting, unilaterally, to change U.S. Internet policy, the view is surreal.

Increasingly, this FCC is becoming an island. It is insisting on self-asserting its exceptionalism and its supremacy over the Internet and It is ignoring an overwhelming amount of important and contrary input, advice and evidence from Congress, the Courts, DOJ, FTC, past FCCs, industry and the public.

Simply, this FCC increasingly appears to view itself as exceptional and as the supreme authority on and over the Internet, unconstrained by Congress, the courts, law, economics, markets or the public.
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FCC Exceptionalism and Supremacy?”

Business - Capitalism - Computers - Democrats/Leftists - Economy/Finances - Free Trade - Google - Government - Inernet - Net Neutrality - Scott Cleland - Technology

FTC’s Google-AdMob Antitrust Checklist

May 17, 2010 by

-By Scott Cleland

Many are missing the forest for the trees in jumping to the conclusion that the two-week extension in the FTC’s review of Google-AdMob means the FTC is reconsidering the FTC’s staff recommendation to block Google-AdMob as anti-competitive.

Google is cleverly trying to misdirect the focus off Google being the actual #2 in-app mobile advertiser, which is buying the actual #1 AdMob market leader, by talking up the potential competitive advertising threat of a distant #3 player Quattro being bought by non-advertising company Apple.

To see the big picture and understand the likely outcome here that the FTC will block Google-AdMob, its helpful to run through the FTC’s likely Google-AdMob checklist decision process.
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FTC’s Google-AdMob Antitrust Checklist”

Business - Capitalism - Computers - Congress - Economy/Finances - Free Trade - Google - Inernet - Net Neutrality - Scott Cleland - Technology

FCC Understating Systemic Risks of “Third Way” — Why It’s a Disaster Waiting to Happen

May 11, 2010 by

-By Scott Cleland

The FCC is vastly understating the systemic risk involved in the FCC’s radical “third way” regulatory surgery to the Internet, the communications sector and the economy.

The FCC’s proposed “third way” is an elaborate public relations facade that disguises huge problems and fatal conceptual/practical flaws that will become painfully obvious over time.

The FCC’s proposal is long on politics and soothing rhetoric, but short on real world practicality or legitimacy; it predictably will ultimately collapse under its own weight, complexity and hubris — unfortunately leaving exceptional carnage in its wake.

Simply, this proposal is too inherently contradictory and mind-numbingly complex, and too big not to fail.
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FCC Understating Systemic Risks of “Third Way” — Why It’s a Disaster Waiting to Happen”

Computers - Congress - Google - Government - Inernet - Liberals - Net Neutrality - Scott Cleland - Technology

The Multi-Billion Dollar Impact of FCC Title II Broadband — for Google & Entire Internet Ecosystem

May 7, 2010 by

-By Scott Cleland

Investors understandably have focused first on whether or not the FCC will upend the broadband Internet sector by deeming broadband a Title II common carrier service for the first time, and second whether or not the FCC actually has the legal/constitutional authority to do so.

However, as a result of that political and legal focus, what has been almost completely ignored is the potential multi-billion dollar impact of such an FCC decision, which by definition, would make all currently unregulated and un-metered Internet traffic bits, regulated and metered “telecommunications” tele-bits for the first time.

Simply, deeming broadband Title II legally could compel bit metering and bit payments in the U.S. for the first time.
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The Multi-Billion Dollar Impact of FCC Title II Broadband — for Google & Entire Internet Ecosystem”

Business - Capitalism - Computers - Democrats/Leftists - Economy/Finances - Free Trade - Google - Government - Inernet - Net Neutrality - Scott Cleland - Technology

Chart: How Google-AdMob Creates a Bottleneck; How New DOJ/FTC Merger Guidelines Affect the Deal

May 4, 2010 by

-By Scott Cleland

Given the FTC is very likely to disapprove Google’s acquisition of AdMob soon, I have prepared a one-page chart that illustrates the core reason the deal is anti-competitive: it would create a substantial bottleneck for advertisers and publishers entering the in-application mobile advertising market.

To help people get up to speed on the deal and the likely FTC disapproval coming up, I have also pulled together a 30-page Google-AdMob backgrounder, which includes a one-page summary, charts, the top 10 reasons the deal is anti-competitive, why Google is a monopoly, how Google has abused its monopoly and why Google’s main antitrust defenses, like “competition is one click away,” are specious.

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Chart: How Google-AdMob Creates a Bottleneck; How New DOJ/FTC Merger Guidelines Affect the Deal”

Business - Capitalism - Computers - Economy/Finances - Free Trade - Google - Inernet - Net Neutrality - Scott Cleland - Technology

Google’s Liability Decade: Why Google’s Leadership Ducks Investors

April 30, 2010 by

-By Scott Cleland

The abrupt change, that Google’s CEO Eric Schmidt will no longer be accountable to shareholders on Google’s earnings calls, should prompt investors to ask why?

Google claimed that they wanted to put more focus on Google’s strong financials, but they did not disclose any more than Google’s usual barest minimum of information to investors. The most obvious reason for this abrupt change is the literal explosion of real franchise liabilities and risk overhangs to Google that reared their ugly heads this past quarter. Had CEO Schmidt been available to answer investor questions, Google’s exploding liabilities could have dominated the Q&A and the investment narrative coming out of the earnings call.

What has changed, and what Google has been not been open about, is the very serious ripening of three different types of going-forward franchise risks (antitrust, privacy/security and intellectual property) that cumulatively herald a de facto change in Google eras: from the roaring “Growth Decade” of 2000-2009, to the more unpredictable “Liability Decade” of 2010- 2019.
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Google’s Liability Decade: Why Google’s Leadership Ducks Investors”

Business - Capitalism - Computers - Economy/Finances - Free Trade - Inernet - Net Neutrality - Scott Cleland - Technology

Why FCC’s broadband public option is a lose-lose gamble

April 27, 2010 by

-By Scott Cleland

The FCC would be making a longshot, bet-the-farm gamble, if it decided to mandate the broadband public option, i.e., deeming broadband to be a common-carrier-regulated service and regulating the Internet essentially for the first time.

It would be a classic lose-lose gamble because the FCC is very likely to lose in court — accomplishing nothing, but damaging the hard-built trust, cooperation and commitment necessary for public-private partnerships to be able to get broadband to all Americans fastest. Also everyone else would lose from the irreparable damage to private broadband investment, innovation, growth, jobs and America’s broadband ranking in the world.

I. Lose in Court:

It is a given that the FCC would be sued; and it is very likely that the Appeals Court and/or the Supreme Court would overturn any FCC unilateral assertion of authority to deem broadband a common carrier service. It is also likely that the court would stay such an FCC action from going into effect because of the likelihood of the petitioners winning on appeal and because of the easy case that it would cause irreparable harm.
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Why FCC’s broadband public option is a lose-lose gamble”

Business - Capitalism - Computers - Economy/Finances - Google - Inernet - Net Neutrality - Scott Cleland - Taxes - Technology

FCC deeming broadband to be regulated opens Pandora’s Box

April 16, 2010 by

-By Scott Cleland

Proponents of the FCC asserting new “deeming authority,” to “deem” broadband to be a regulated phone service and thus subject to the FCC’s existing Title II telephone authority, have not even begun to answer the most fundamental questions of what such a foundational change would mean.

Premature characterizations that this nouvelle, regulatory “deeming” would somehow be easy, clean or containable, simply have not thought through the potential chaos, havoc and uncertainty that such a radical, foundational and over-reaching regulatory “deeming” would wreak on:

  • Legal/policy precedent, clarity and stability;
  • Business investment and innovation — assumptions, incentives, models and practices;
  • Economic growth, private investment and job creation;
  • Industry financial stability, contracts and debt covenants; and
  • Trust, cooperation and respect the FCC needs to fulfill its mission and its National Broadband Plan.

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FCC deeming broadband to be regulated opens Pandora’s Box”

Business - Free Trade - Google - Inernet - Net Neutrality - Scott Cleland - Technology

Harms of a Potential New FCC De-Competition Policy — Reply Comments to FCC Open Internet NPRM

April 11, 2010 by

-By Scott Cleland

The FCC’s proposed Open Internet Regulations and/or the oft-rumored potential re-classification of broadband as a Title II telephone service effectively would create a new FCC “de-competition policy.” (For the one-page PDF submitted to the FCC click here.)

A new FCC “de-competition policy” would:

  • Supplant market-based competition policy with outdated common carrier regulation policy;
  • Shift the FCC’s primary purpose from promoting competition to promoting openness;
  • Replace the core mechanism for advancing consumer welfare from a voluntary, bottom-up, market-based competition system to a coerced, top-down, centralized, FCC regulation system; and
  • Remove users from being in charge of the Internet to the FCC asserting control over the Internet.

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Harms of a Potential New FCC De-Competition Policy — Reply Comments to FCC Open Internet NPRM”

Budget - Business - Capitalism - Computers - Economy/Finances - Google - Inernet - Net Neutrality - Scott Cleland - Taxes - Technology - YouTube

GBC: Google Broadcasting Co. — World Unicaster

March 24, 2010 by

-By Scott Cleland

First there was one-to-many broadcasting, then many-to-many Internet narrowcasting… now it appears we are moving next to a one-to-many GoogleNet unicasting future where every company and individual may simply become a subordinate channel on the Googleopoly advertising network, and where content largely would be found only via Google’s mono-search guide.

To better understand this troubling ongoing transformation, connect the dots below:

Google TV:

  • NYT: “Google and partners take aim at the TV;” “The move is an effort by Google and Intel to extend their dominance of computing into television, an arena where they have little sway.”
  • WSJ

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GBC: Google Broadcasting Co. — World Unicaster”

Budget - Business - Computers - Democrats/Leftists - Google - Government - Inernet - Liberals - Net Neutrality - Scott Cleland - Technology

FTC now very likely to oppose Google-AdMob

March 16, 2010 by 1 Comment

-By Scott Cleland

The FTC is now very likely to file an injunction in Federal Court to block Google’s proposed acquisition of AdMob, if Google does not walk away from the deal, given that Bloomberg reports that the FTC is “seeking sworn declarations from Google Inc. competitors and advertisers.”

Why such signed declarations are particularly indicative of the likely outcome is that the FTC has moved largely from an investigative phase to largely a prosecution phase.

Given reports of signed declarations, a preliminary decision has been made by the FTC investigative staff (with the assent of, or direction from, the FTC Chairman), that the deal would “substantially lessen competition.” In other words, the FTC staff believe the deal would be a violation of antitrust law.

Remember, neither the FTC nor competitors/advertisers take lightly the signing of legal declarations about what would be said under oath in a court of law under the penalty of perjury.
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FTC now very likely to oppose Google-AdMob”

Budget - Business - Capitalism - Computers - Democrats/Leftists - Free Trade - Google - Inernet - Liberals - Net Neutrality - Scott Cleland - Technology

Google-AdMob: An FTC Antitrust Enforcement Watershed — Lessons from Google-DoubleClick & EU

March 9, 2010 by

-By Scott Cleland

Will the FTC strictly enforce antitrust laws in its review of Google’s AdMob acquisition? Google-Admob is a watershed decision for the FTC given that Google recently blew off the DOJ’s serious antitrust objections to the pending Google Book Settlement; The EU opened a preliminary investigation of antitrust complaints against Google from companies in the UK, France and Germany; and The DOJ had to play backstop to the FTC and block the Google-Yahoo Ad Agreement, less than a year after the FTC incorrectly assumed in their 4-1 approval of the Google-DoubleClick deal that Yahoo and others would provide sufficient competition to Google and Google acquiring DoubleClick would not “substantially lessen competition” or tip Google to a monopoly.

A recent New York Post article: “FTC inclined to approve Google’s acquisition of AdMob” states the deal “may just squeak by federal regulators.”

It’s pretty obvious the article’s source came from the Google camp and not the FTC, given the political nature of the source’s views: the FTC “will likely not rule until Obama nominees” are confirmed by the Senate, strongly implying that the:

Administration’s close political ties with Google would trump any career staff law enforcement findings of fact or the law and the lone FTC vote against the 4-1 Google-DoubleClick deal approval, Commissioner Jones-Harbor, will no longer be at the FTC.

Why is this Google spin on the FTC’s inclination likely false?
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Google-AdMob: An FTC Antitrust Enforcement Watershed — Lessons from Google-DoubleClick & EU”

Budget - Capitalism - Computers - Free Trade - Google - Inernet - Liberals - Net Neutrality - Scott Cleland - Technology

Foundem FCC Filing Documents Google Search Network Discrimination; Window into EU-Google Antitrust Case

March 2, 2010 by

-By Scott Cleland

Foundem, a UK vertical search competitor to Google, documents serial anticompetitive discrimination on Google’s search network, in a data-driven filing to the FCC in the FCC’s Open Internet regulation proceeding.

It is logical that the data-driven analysis in Foundem’s public FCC filing is an integral part of Foundem’s antitrust case against Google, which Foundem recently submitted to the EU, but which has not been released yet.

Therefore, Foundem’s FCC filing may be the best publicly available window into what the EU investigation of Google’s anticompetitive practices entails.

In essence, the Foundem filing accuses Google of monopolistic self-dealing and bundling.
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Foundem FCC Filing Documents Google Search Network Discrimination; Window into EU-Google Antitrust Case”

Budget - Business - Computers - Economy/Finances - Free Trade - Google - Inernet - Net Neutrality - Scott Cleland - Taxes - Technology

How much should Google be subsidized?

February 22, 2010 by

-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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How much should Google be subsidized?”

Budget - Business - Computers - Free Trade - Google - Inernet - Net Neutrality - Scott Cleland - Technology

FCC: Forced Access Uneconomics & Selective Math?

February 19, 2010 by

-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: Forced Access Uneconomics & Selective Math?”

Budget - Computers - Democrats/Leftists - Free Trade - Google - Inernet - Net Neutrality - Scott Cleland - Technology

FCC Reclassification is Eminent Domain, but with No Just Compensation or Authority

February 7, 2010 by

-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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FCC Reclassification is Eminent Domain, but with No Just Compensation or Authority”