Happy weekend, all. To get personal, had some real excitement on my end. Preemptively replaced my chair before it fell apart, since the last one I let fall apart collapsed while I was sitting in it. I was lucky the only injury I took was a smack on each arm. But, the new chair had the LUMBAR PAD OF DOOM which started killing my back. I’ve gotten the chair adjusted, pulling the Death Pad™ way back, stopped using my pillow which changed the positioning of the pad on my back, and all should be well now. Yes, I somehow take a profession that involves sitting down and still manage to be injury-prone.
So, we’re back to talking about competition again. The FCC has announced what its rules will be for the AT&T/T-Mobile deal. Says Cnet: “First it has to determine if the deal will meet specific requirements in the Communications Act and FCC rules. And second it will determine if the merger is in the public interest.” I expect that the Communications Act won’t be a big deal, but the “public interest” fudge will be the big fight.
What the left isn’t going to allow the possibility of, though, is the idea that this acquisition might be needed just to keep AT&T competitive with Verizon at the top. Reports like this from the American Consumer Institute should inform the FCC, though. Catch this key takeaway of the market after a series of mergers it’s already seen: “The combination of higher usage and lower prices means that consumer welfare has increased significantly – not what would be expected from a “failed market.””
Of course, we all know that the Obama FCC is going to bend over backward to listen to mushy-headed analysis like this in USA Today. In this fantasyland analysis, ISPs are going to be able to successfully compete by deliberately making their services slower and less effective for popular sites. Given that the reverse has been happening, and we see facts like free Facebook on Delta flights (non-neutral but the radicals never complained, funny that), any sensible FCC would demand proof. But this is the dumbest bit of all, that reflects a complete lack of understanding of the capital expenditures ISPs must make:
Over time, Internet companies will spend their resources developing the infrastructure for the higher tiers, neglecting enhancements in lower tiers. You’ll be in the “economy” cabin while others are in business or first class. At best, you’ll get peanuts.
So, according to Rhonda Abrams, ISPs are going to develop two parallel networks: spending billions for a rarefied higher tier of service… and then spending billions more on a crippled secondary network for everyone else? In what science fiction world is this a profitable proposition? The forces of Internet regulation and Net Neutrality are really having to reach now, as they’ve become an embattled fringe minority in America.
And yes, Net Neutrality has become such a minority that even the great wall of union solidarity has been broken. The Songwriters Guild of America has come out against Net Neutrality. This move is bi-winning for me, because not only is it true out that the recording industry can benefit greatly from innovative service partnerships that Net Neutrality might prohibit, but that it’s the freeloaders who want regulation to prevent them from downloading what they want without paying for it. I’ve long argued that the industry’s problems are as much of their own making as Napster’s, thanks to their years-long refusal to adapt to new technologies and sell music online. Fortunately, Steve Jobs forced them into the 21st century, and now they don’t want the FCC to force them back.
Speaking of innovation though, The same music industry needs to back off of Amazon. Online storage is not a radio station, and that’s all there is to it. To force Amazon to pay fees for this is as crazy as the idea the music industry also has put forward in the past, to demand fees off of blank media sales. This is regressive by the industry. Innovate, don’t run to government.
MagicJack is in trouble. magicJack’s subsidiary YMax has been milking the system for extra money from big, bad AT&T, only to get smacked by the FCC. Now every other phone provider is going to have the green light to get the same ruling. If magicJack’s continued operation has depended on call termination fees, it may be time to start looking for another phone provider for magicJack users.
Final fascinating note: Apparently the FCC is dragging on the Paperwork Reduction Act, which was passed over 30 years ago. The FCC has serious problems and needs major reform, now.