June 2011 Archives

June 29, 2011 2:01 PM

How I Learned to Stop Worrying and [Like?] the Wireless Competition Report

Earlier this week, the FCC released its annual Wireless Competition Report to Congress. Like last year, the Commission noted the overall complexity of the mobile wireless market, and the adjacent markets in the supply chain for wireless services.  Based on this complexity, the Commission again decided not to make any conclusions as to whether the mobile wireless market was effectively competitive.  Commissioner McDowell fairly expressed criticism that the Commission shouldn't shy away from its directive simply because it is difficult.

I couldn't agree more with Commissioner McDowell.  The FCC's failure to sift through all that complex data and reach a well-supported conclusion means that I had to read the report.  This was, to say the least, tedious--yet informative.  Regardless of what one might think about the Commission's indecision, the Report was obviously the result of a lot of hard work, and the Commission staff certainly deserved the compliments included in the Commissioners' separate statements.

Once you accept that the Commission wasn't going to reach any conclusions regarding the state of wireless competition in its Wireless Competition Report, you cannot help but be impressed by both the (perhaps unnecessary?) ambitiousness of the report, and the conclusion that--by just about any relevant measure--the mobile services market became more competitive over the time period measured.  

Network capacity increased (in terms of network deployment and upgrades), output (as measured by consumer demand/subscribership) increased for both voice and data services, as did consumer choice for rural and urban consumers in terms of number of service providers and services/devices from which consumers could choose.  The number of wireless Internet data subscribers more than doubled between 2008 and 2009.  Through this time period, prices remained low (as measured by the Cellular CPI-Table 19), or declined (for most data users--see discussion at para. 90).

Continue reading How I Learned to Stop Worrying and [Like?] the Wireless Competition Report
June 28, 2011 12:30 AM

Public Knowledge vs. the "Public Interest"?

The latest inside-the-beltway "tempest in a teapot" involves the opponents of the AT&T/T-Mobile merger impugning the motives of some of the merger's supporters.  Several articles have been written that attempt to make an issue of the fact that some (though not all) of AT&T's "public interest" supporters are also supported by AT&T.  

Why the big deal, one might ask?  After all, the FCC is required to consider the "public interest" in its consideration of the merger application--and the only obvious way to evaluate the "public interest" is to ask the public for comments (which the FCC has done).  But, with the "official" pleading cycle closed, my guess for the motivations behind the stories, are that--barring any new facts--what's a "gadfly" to do, but attack the sincerity of the other side's gadflies?

What is revealing, though, is that the groups urging the FCC to disregard the speech of other parties are doing so, based not on the content of the speech, but the identity of the speaker.  Even more interesting is that these interest groups go by nifty names like "Public Knowledge" and "Free Press."   

By attacking the identity of their opponents because they "have no background in telecommunications" (as stated by Public Knowledge's spokesman) or their "relationships" with AT&T, the interest groups seem to be conceding that the substance of the AT&T supporters' arguments are as persuasive (or vapid) as their own arguments opposing the merger.  Other supporters of AT&T, like the Sierra Club and various labor unions, are treated more kindly (I guess) and dismissed as simply too na├»ve to have a truly informed opinion.

It insults the process that the essential message of the interest groups is that the FCC should limit its consideration of certain "public comments" based on the identity of the speaker, rather than the content of the speech.  At least as disturbing is that the press stories seem to credulously accept this implicit contention that the FCC is incapable of evaluating the merits of this merger based on the content of its record.  Equally distasteful is the cynical, and elitist, view that even Members of Congress expressing a contrary point of view are like sheep, incapable of independent thinking.

In the purely competition-focused world of the antitrust laws, the Supreme Court has addressed this question time and time again, and has always held that the motivation of the person lobbying the government is simply irrelevant should the government make a decision consistent with the interest of the lobbying party.  The First Amendment guarantees citizens freedom of speech, freedom of assembly, and the "right to petition the government for a redress of grievances."

The Supreme Court's decision to defend an important civil liberty over a law intended to regulate commerce first arose in 1961 in Eastern Railroads President's Conference v. Noerr Motor Freight, Inc. ("Noerr"), where the Court held that "lobbying" was protected speech, even if the result of the lobbying created laws that allegedly injured the business interests of trucking companies to the advantage of railroads.  

The Communications Act of 1934 requires the FCC to perform a "public interest" analysis prior to approving any license transfer, so the issue of a conflict between the right to petition and this provision of the Act would seem to be a legal impossibility.  Yet, there are still the few that know what's best for all.  These parties continue to insist, in the court of public opinion, that comments filed in support of AT&T by organizations with varying degrees of affiliation with AT&T should be disregarded by the Commission simply because they were consistent with the position of AT&T.  This criticism of certain merger supporters, especially of civil liberties groups like the NAACP, GLAAD, and the National Urban League, for exercising their First Amendment rights takes on an air of absurdity.  

Instead of focusing on the identity of the commenters, the public interest would be best served if the self-proclaimed guardians of the public interest would keep in mind the wisdom of the Noerr Court 50 years ago, and remember that, like the Sherman Act, the Communications Act was intended to regulate business activity, and not political activity.  If the government can take an action, then members of the public--regardless of identity or affiliation--must be allowed to lobby for that action.