Is the market, or the FCC, the problem in “timely and reasonable” broadband deployment?

  • The FCC’s just released 706 broadband report, like the wireless competition report that preceded it in May, again indicts the broadband industry for not meeting the FCC’s new arbitrary, subjective, and after-the-fact expectations of where the nation should be at this particular point in time, despite the FCC’s own facts that 95% of Americans have access to broadband and that Americans have more broadband competitive choices than any country in the world.

To see if the FCC is more interested in actually getting broadband deployment to all Americans fastest or in micromanaging broadband access, economics and providers — look at how the FCC has burdened LightSquared, the start-up that seeks to be the EIGHTH national U.S. broadband competitor!

  • (To count: 1. cable, 2. DSL/Fiber, 3. Verizon Wireless, 4. AT&T Mobility, 5. Sprint, 6. T-Mobile, 7. Clear (WiMax); & 8. LightSquared.)

Some context is needed here.

In the aftermath of the Great Recession, when credit remains tight, jobs are needed, and broadband investors are highly concerned about earning a return on long term investments, especially given a well-known more Title II regulatory-minded FCC/Adminstration, the FCC has effectively torpedoed much of LightSquared’s ability to raise the large amounts of capital over time it will need to build-out, launch and operate an EIGHTH national broadband network.

Despite the FCC knowing the high risk of deploying a satellite broadband network in a “timely” fashion (given Teledesic & Iridium‘s prior experience), the FCC piled on massive regulatory burdens on this start-up before it could even start.

  • First, it made it much harder to raise capital by arbitrarily cutting its potential addressable market by more than half by effectively banning it from earning any revenue from wholesaling bandwidth to the nation’s two largest wireless broadband providers Verizon and AT&T.
  • Second, the FCC effectively mandated a wireless net neutrality model that potentially will prohibit LightSquared from innovating with reasonable network management or ever experimenting with other business models if market conditions ever were to warrant it.
  • Third, the FCC imposed strict build-out benchmarks and timetables on the platform, signaling to potential LightSquared investors that the FCC bureaucracy will be the equivalent of LightSquared’s shadow General Contractor.

In sum, if the FCC was truly interested in broadband competition succeeding, and actually encouraging broadband deployment in a timely and reasonable manner like the 706 provision and the Telecom Act require, the FCC would not be taking repeated actions that capital markets naturally would interpret as obviously hostile to broadband competition policy.

  • The FCC’s inexplicable 706 broadband conclusion that broadband deployment is not timely or reasonable…
  • …on the heels of the FCC’s fact-challenged finding that wireless is not effectively competitive…
  • …on top of the FCC seeking to regulate broadband information services as telephone monopolies with no legal authority or factual predicate of changed circumstances…
  • …on top of the FCC imposing mandatory Open Internet/net neutrality broadband regulations when there is no evidence of a problem to address…
  • …cumulatively show that the FCC does not support the bipartisan consensus competition policy in the Telecom Act, but is pursuing its own unauthorized “de-competition policy.”
The FCC’s actions increasingly indicate that the FCC does not want broadband to succeed, so that the FCC can justify more regulation and Government control of the broadband Internet.

 

37 States are now involved in a “powerful multi-state investigation” of “Google’s Streetview snooping” per a press release from investigation leader, Connecticut Attorney General Richard Blumenthal, who released a new follow-up letter to Google asking for more information and clarification of its representations to date.

The letter shows the investigation is very serious. Its prosecutorial exactness strongly suggests that investigators believe Google has not been forthright in its answers to date and that it could be covering up material information to the investigation.

  • Several questions in the letter also indicate that the investigators are seriously concerned about the integrity and completeness of Google’s systems of internal controls and supervision to ensure the safety and privacy of consumers.

What appears to be the most problematic line of inquiry is whether or not Google tested this software before it was used in public to collect private information on consumers.

  • If Google did test the code in question, then Google has misrepresented the facts and deceived investigators and the public about the scandal.
  • If Google did not test it, Google will have to explain how code that could affect consumers’ security and privacy could get out without supervision or review, which would then open up the inquiry to what other types of Google software is capturing private information on the public without appropriate and responsible Google internal controls and supervision.

In sum, Google is in a real pickle.

  • It appears as if Google will have to admit either to misrepresentation/deception/cover-up or accept full liability for gross negligence concerning consumers’ privacy/security.

 

 

FOR IMMEDIATE RELEASE

July, 20 2010

Contact: Scott Cleland

703-217-2407

 

 

FCC 706 Report: U.S. Broadband Cup is 5% Empty

FCC’s criticism misplaced; broadband industry has over not under achieved

 

 

WASHINGTON – Scott Cleland, Chairman of Netcompetition.org, released the following statement regarding the FCC’s unprecedented 706 Report conclusion that broadband deployment is not timely and reasonable.

 

  • “It is stupefying that the FCC could conclude that broadband service, which has reached 95% of all Americans faster and with more competitive choices than any deployed communications service before it, could somehow be judged as not timely or reasonable.”
  •  “What is unreasonable is for the FCC to ignore the obvious deployment facts before them, and to criticize industry for not deploying to the less than 5% of the nation where the FCC knows it to be uneconomic to serve competitively, and when the FCC knows that industry is, and has been, working very closely and constructively with the Federal Government on promoting universally accessible broadband and the National Broadband Plan.”
  •  “What is shake-one’s-head unreasonable is for the FCC to take a 706 broadband “incentives” provision of the Telecom Act and twist an FCC report to justify erecting unprecedented FCC broadband Title II regulations that would powerfully dis-incentivize broadband deployment more than any other FCC policy change the FCC has ever considered.”

 

NetCompetition.org is a pro-competition e-forum representing broadband interests.

See www.NetCompetition.org.

###

 

The Google Fiber for Communities pledge to offer one or more U.S. communities ultra-fast Internet access at one gigabit speeds, is Google’s latest stealth manipulation of the public.

  • In essence, Google’s fiber effort is a cynical national lottery that will result in just one or a few big winners and leave everyone else losers, with nothing to show for all their court jester efforts to entertain and get the attention of Google, the self-described “biggest kingmaker on this earth.”
  • Apparently operating under Circus promoter P.T. Barnum’s cynical “a sucker is born every minute” world view, Google is preying on the severe economic hardship and unemployment of over 1100 communities, by teasing Google fiber riches for one (or a few).
    • (This isn’t the first time Google has preyed on distressed communities to extract the maximum gain for Google, see the sordid tale of how Google took advantage of the job-loss-ravaged town of Lenoir North Carolina — here.)
  • Google is cynically urging cities to “dream big” when they know they will crush most all of their Google-generated dreams in the end.

How do we know this Google fiber lottery is stealth manipulation?

  • Look at Google’s explanation of “Why we are doing this” Fiber for Communities website.
    • Google claims its purpose/motives are only informational.
    • However, when you look at the site more closely it is a cynical astroturf lobbying campaign that urges the communities to “Take Action” and write Congress to support Google’s fiber legislation and to enact Google-friendly zoning regulations in their communities.
    • At the bottom of the Take Action page, Google says with a BIG wink: “While taking these steps won’t have any impact on whether Google selects a particular community for its fiber deployment, they will allow you to have a direct hand in bringing ultra-high-speed broadband to your community.” Yeah.
      • Google cynically knows that distressed communities will do most anything Google suggests in order to keep “hope” that their “big dreams” somehow will come true.

If Google’s real motive was to promote ultra-high speed broadband fastest (as it announced as part of its “think big with a gigpublicity stunt surrounding the FCC’s National Broadband Plan), and not to collect free data on hundreds of communities and to organize communities around the nation to lobby Washington for Google’s fiber policies/legislation, why didn’t Google just pick a city and do it?

  • Why take a ~year to decide?
  • Google says the technology is available today and Google prides itself in being able to do most anything faster and better than most anyone.
    • The Federal Government is moving faster on its broadband grants than Google plans to do with its lottery decision…

In sum, if Google really cared about getting faster broadband to all Americans fastest, it would not be lobbying hard for:

  • Broadband-investment-killing Title II regulation of broadband by the FCC; and
  • Open Internet regulations by the FCC that would allow consumers to be charged more for using more bandwidth, but would ban Google from having to pay more for YouTube’s bandwidth-hogging, inefficient-one-to-one-Internet video broadcasting service.

Don’t listen to what Google says, watch what they do.

 

Google strongly legitimized the problem of “search neutrality” in arguing in detail in an FT op-ed today why Google’s search should not be neutral.

  • The essence of Google’s search neutrality problem is that they are imploring everyone to do what they say, but not what they do.
    • (And Google does have a very big problem when the New York Times writes an editorial: “The Google Algorithm questioning if Google’s search “leads us fairly to where we want to go.”
  • Google’s search neutrality problem is also entirely of their own making.

As one of the first to regularly document Google’s systematic hypocrisy of saying one thing and doing another, and demanding its competitors operate in ways Google is unwilling operate, it is important to address the sincerity of Google’s arguments against being subject to “search neutrality” by governments, as explained by Ms. Mayer, Google’s VP of Product and User Experience, in her FT op-ed: “Do not neutralise the web’s endless search.”

  • Innovation: Google argues search neutrality mandates could stifle its innovation.
    • However, Google has summarily dismissed that same innovation problem argument made by its competitors as the lead bankroller and lobbying force for the last four years behind the push for preemptive “net neutrality” mandates and Title II Telephone monopoly price and non-discrimination regulation for all broadband providers.
  • Abuse: Google argues that antitrust oversight of search would lead to gaming of the algorithm and harming the consumer experience.
    • Google’s argument is a straw man, as there are a number of internal controls, and third-party/Government oversight processes and procedures that could address anti-competitive or deceptive business practices without the full disclosure of Google’s trade secrets.
    • Everyone knows there are business confidentiality rules the government follows that can easily address this Google concern.
  • Commoditization: How can Google argue that an expectation that Google not use its monopoly power to discriminate against non-Google-owned content would result in commoditization, when Google argues that mandated monopoly non-discrimination regulation of its competitive broadband competitors would not result in commoditization?
  • Consumer Choice: Google argues that antitrust oversight of the neutrality and fairness of its search results would undermine consumer choice and search competition.
    • The problem is that, despite arguing that Google works for users, Google gets paid by advertisers and publishers — not users.
    • Google has a standard “Competition is One Click Away” defense that is bogus because the anti-competitive problem results from the Internet Choice Paradox, where consumer have great choice of digital information providers, but digital information providers face a Google bottleneck in reaching the global Internet audience.

In sum, Google’s self-proclaimed “search neutrality” problem is entirely of its own making.

  • It has been caught in its own “don’t be evil” net, and its own longstanding, well-documented, and principled public stances arguing for world neutrality, openness, transparency, and no censorship on the Internet.

Google’s bigger problem is that it has little credibility in arguing that all the rules that Google has sought to burden its competitors with should not apply fairly to Google, when Google is caught doing what Google has long argued is wrong.

  • No PR contortions from Google’s legendary PR machine, can get people to support principles, laws, and regulations that apply to everyone… but Google.

 

 

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