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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”

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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”