This is one of those weeks when all the important stuff happens at once, and there’s much to cover. I’ll start with the big national story. As I previously covered, The Eric Holder/Barack Obama Justice Department is coming after AT&T, using its own odd brand of economics to claim that the merger with T-Mobile would make the wireless market less competitive. When in fact, as history has shown with deals like Sprint/Nextel, prices are only going to come down as the market gets more competitive.
But, nonsensical as it is, the Obama administration is pressing on with the same tired thinking that gave us zero net job creation last month, and downward revisions in prior months. So let’s sweep around and look at what’s going on, what others are saying both about the news and about the prognosis, beyond the Culture of Corruption aspect I already covered.
First, let’s look at the FCC. I find the reactions interesting. The day after the announcement, I saw no reaction on the FCC mailing list from Chairman Julius Genachowski, but only from fellow Democrats Mignon Clyburn and (Free Press’s pet commissioner) Michael Copps. Copps, of course, is cheerleading. Also interesting beyond Genachowski’s silence was the statement by Clyburn. Is it just me or does Clyburn sound defensive, like she’s taking offense at the DoJ’s implication that the FCC wasn’t looking out for the public on this?
Rick Perry’s reaction is good to hear. He’s all for the merger. Again, party lines aren’t always great predictors on tech issues, so I’m glad that a leading Republican Presidential candidate has made such a strong statement.
At Forbes and at TLF, Larry Downes points out all tech firms should be concerned about Obama’s campaign promise to “reinvigorate” antitrust, and ought to take an interest in promoting smaller government.
I mean, sure, it’s great news to see Obama slapping down the EPA due to Republican pressure on the heels of the FCC erasing the Fairness Doctrine. But this is still an administration that loves to expand its reach. The net growth of government has been positive under Obama, and that threatens innovation, growth, and jobs. And the President seems to be encouraging an activist Justice Department.
Don’t be too discouraged, though. Mike Wendy says it’s not over yet, despite Clearwire and Sprint Nextel stocks surging in response to the massive favor Obama just did R. Gerard Salemme and Craig McCaw.
And again, remember: the reason those stocks are rising is that the Obama/Holder DoJ is taking action to reduce competition in the 4G market, currently occupied nationally by just Verizon and Sprint/Clearwire.
As for AT&T itself, the consensus seems to be they’ve been caught flat footed, and didn’t see this coming but perhaps should have. In any case, they’re now floating offers to sell a minority stake in the firm, though I don’t see how that will appease anyone when the motivation behind this lawsuit is ideology, not facts or practical observation of the market.
The number of seminar commenters even a nobody like me gets is amusing to watch, as they all come on and pretend to be Republicans as they push a big government, corporatist ideology.
So you may have heard that California is trying to extend beyond its Constitutional authority and make an out-of-state firm Amazon pay taxes to California. California isn’t the only state to propose this, but it’s one of few pig headed enough to push so hard at it. Why? In state businesses are grumbling that Amazon, with its innovative inventory and Internet techniques, can sell for less. They claim that if only Amazon charged sales tax, they wouldn’t succeed so well. It’s nonsense, but it doesn’t take much to get tax-and-spend politicians to tax and spend, does it?
Amazon responded to California’s plan by cutting all ties with California affiliates in the Amazon Associates program (I was one of them). As a result, California lost jobs and lost revenue, making a mockery of the delusional claims that this power grab would raise revenue. Amazon though also proposed a compromise: the firm would bring jobs to California above and beyond the affiliate program if the state would hold off on the tax long enough that Amazon could lobby for a national plan to pass the Congress.
But, the state is siding with Wal-mart against Amazon. Now, I like Wal-mart, but I don’t like government taking sides to pick winners and losers. So even a member of the Board of Equalization (that’s the socialist name for California’s tax organization) likes the Amazon compromise.
Now, I oppose the current talk in Washington pushed by Dick Durbin, as I believe it’s a first step toward a Canada-style Harmonized Sales Tax, including our equivalent of Canada’s Goods and Services Tax, a national sales tax. But if you wanted to tax revenue long term, Amazon’s plan is great. Once Amazon builds a distribution center here, then it becomes much easier on the long run to tax them.
The Democrats’ refusal to work with Amazon seems tor prove this plan is more about punishing Amazon than about “fairness.” It’s corrupt and it’s shameful.
Some quick hits to finish: Wikileaks strikes again, but cowardly tries to pass the buck.
The terrorist gang Anonymous continues to get rolled up in the UK. Ah, justice.
Media neo-Marxists like Free Press are well-funded astroturf, and here I am fighting them without a penny of funding. This is just me, all volunteer, folks.