The downside of eCommerce

By most accounts, Black Friday this year was a big success.  Sales figures exceeded expectations as throngs turned out to snap up $20 toasters and $200 flat-screen TVs.   But for all the millions who got up from turkey and pie to head for the nearest local mall, many shoppers ventured no farther than the computer in the next room.  

E-commerce has come to play a critical role in the U.S. economy.  On-line sales for “Cyber Monday,” last week jumped roughly a third compared to last year—reaching well over $1 billion in a single day.  On a yearly basis, e-commerce generated more than $160 billion in sales in 2010 alone.  

There’s much to cheer about in these numbers, and not just for retailers.  The Internet offers consumers access to a remarkable array of options and far better information for discriminating among them.  A market of buyers and sellers unbound by geography can achieve levels of competitiveness and efficiency Adam Smith never dreamed of, driving prices down and spurring manufacturers to innovate relentlessly.  


Another opportunity to question Google practices

As the year draws to a close, one of the biggest stories of 2011 in technology and regulatory policy has been the increasing scrutiny of Google – its market power and its behavior.  This week brings yet another opportunity to hear policymakers address this important issue when a House Judiciary subcommittee looks at “Oversight of the Antitrust Agencies.”  

The hearing will present an opportunity to raise one of the most important issues facing our antitrust officials today - the question of how to address the growing market power of Google. 

Consumers and businesses who rely on the Internet for their information are worried about the power that Google has in the marketplace.  Depending on the source, Google has anywhere from 65 to 85 percent share of the online search marketplace, and dominates online video, mobile search and mapping.  


The preseason does not count: Why the FCC staff paper won’t impact the ATT/TMobile merger trial

In early August, the Philadelphia Eagles beat the Baltimore Ravens 13-6.  The Eagles, who had bulked up their team in the offseason, were being declared “America’s Team” and inevitable champions.  Perhaps the defeat of the Ravens was a sign of the potential Super Bowl victory that awaited long beleaguered Eagles fans.  Indeed, the Eagles won three of their first four games.

There was only one problem.  It was the preseason. And the preseason does not count, as evidenced by the Eagles’ current 4-8 record.

This is a vital lesson to the scores of commentators pouring over the FCC staff’s paper on the ATT/TMobile merger.  Even though regulatory staffs traditionally guard their staff work from public disclosure, the FCC bucked tradition by sharing it in the public domain.  

Now the merger opponents will argue that the FCC decision dooms the ATT/TMobile merger.  They will claim it provides a perfect roadmap for Judge Huvelle to find the merger anticompetitive and block it.  They will demand that it demonstrates without dispute that the merger is anticompetitive.  

They could not be more wrong.


Dead mergers

Watching AT&T try to save its proposed merger with T-Mobile is like watching a remake of The Sixth Sense: The lead character is dead but doesn’t know it yet. 

As much as AT&T pretends to the contrary, the takeover flat-lined last week when the FCC indicated it would oppose the deal. While some observers framed the FCC’s move to designate the merger for an “administrative hearing” as just another setback for AT&T, it was actually a fatal blow. The Department of Justice blocks mergers with lawsuits; the FCC does the same with hearings.

More damning than what the FCC was about to do were the reasons behind that decision. The agency rejected the claims in AT&T’s advertising and lobbying blitz, concluding that the merger would be a massive jobs killer that wouldn’t lead to faster rollout of 4G services to rural America. The FCC also confirmed the Department of Justice’s analysis that the merger would do immeasurable harm to competition and innovation.


Jumpstarting Opportunity with Broadband Spectrum

There are no priorities before Congress more pressing than spurring private sector job growth and reducing the deficit.

That’s why, under my direction, the Communications and Technology Subcommittee has dedicated the past year to exploring how spectrum policy can help accomplish these goals.

Following multiple hearings, negotiations, and input from job creators, public safety officials, and other stakeholders, I am disappointed that we could not develop a bipartisan bill. But for the sake of the economy and public safety, we decided to take the best ideas and move forward today with unveiling the Jumpstarting Opportunity with Broadband Spectrum (JOBS) Act of 2011.


The Supercommittee can increase revenues and add jobs through spectrum auctions

Few proposals lawmakers have been considering in recent weeks aimed at restoring our fiscal discipline have the immediate ability to generate revenue for the Treasury, stimulate direct domestic investment, spur innovation, and create jobs than spectrum auctions.

At the moment, spectrum is in short supply.  Currently in use for “over the air” television delivery, which is consumed by fewer than 10 percent of American households, this underutilized spectrum could be reallocated for mobile broadband usage. Cisco estimates the volume of mobile data in the United States will double every year through 2014, increasing 39 times between 2009 and 2014, for a compound annual growth rate (CAGR) of 108 percent.

Industry studies have determined there are currently more than 276 million wireless subscribers in the United States, which represents a penetration rate of 89 percent. The number of subscribers increased by 40 percent between June 2005 and June 2009 while the number of wireless-only households nearly tripled.


Selling spectrum for a song

Everyone’s wallet gets light from time to time. In the late 1950s and early ‘60s, Willie Nelson was so broke, he sold the rights to several of his most well-known songs for less than what a full tank of gas would cost today. “I needed fifty dollars!” he later recalled. In hindsight, the idea of letting the rights to “Crazy” go for a paltry ten bucks seems, well, crazy. Unfortunately Congress may be on the verge of making the same sort of short-sighted mistake with its proposed plan to sell off TV broadcast spectrum as a method of raising a small amount of revenue in the short-term.
The shift to digital has opened up opportunities in the old over-the-air TV band. This part of the radio spectrum could foster innovative technologies and help bring more affordable broadband to hard-to-cover areas. That is, if the spectrum isn’t locked down by America’s dominant mobile carriers.
In the face of economic hardship, iffy decisions can be too easily justified. Currently, policymakers — including the ballyhooed Super Committee — are exploring ways to put some much-needed cash in the US Treasury. Selling America’s spectrum to established industry players might seem like a fine idea at the moment. But it could leave us singing the blues down the line.


A goal we should all share: A 21st century FCC

The technology and communications sector is the most innovative in our country—it deserves the most innovative and open government agency. 

Federal Communications Commission Chairman Julius Genachowski has taken some steps to open his agency’s processes to the public. However, only Congress can make permanent these reforms and others to ensure that the FCC is the kind of accountable federal agency that taxpayers deserve.

To that end, the Subcommittee on Communications and Technology today (Wednesday 16th Nov) will examine a bill we recently introduced, the FCC Process Reform Act, that would put good government reforms into law for the current Commission—and for all those to come in the future.

As of this summer, 1,351,898 consumer complaints, 5,328 petitions from industry stakeholders, and 4,034 license applications and renewals had been pending at the FCC for more than two years.


House bill threatens new technology innovation and America jobs

There’s a hearing in the U.S. House of Representatives this week that could determine the future of how we use the Internet. On November 16, the House Judiciary Committee will meet to discuss the Stop Online Piracy Act, referred to as SOPA. SOPA and its Senate counterpart, the Protect IP ACT (PIPA), sound innocuous enough and their goal is a good one—stopping offshore, online piracy and copyright infringement.
Unfortunately, this legislation severely threatens lawful, U.S. technology industries by overturning the existing laws that have helped fuel the tech boom of the last decade and instituting new regulations which would stifle innovation and job creation.  Both bills gut the Digital Millennium Copyright Act (DMCA), which for over a decade has helped Internet companies grow and flourish.  The DMCA is one of the big reasons companies like Facebook, YouTube, and Twitter weren’t crushed in their early days by harassing lawsuits.


Keep the Internet free and open

From the perspective of the small, competitive telecom carrier, Net neutrality carries great weight. My company is among a relatively small but entrenched cadre of competitive “common carriers” as licensed by a decades-old regulatory structure oddly enough borne out of AT&T’s original “legalized” monopoly. This regulatory structure creates a relatively even playing field for carriers like ours to compete against the likes of AT&T, Verizon and Comcast – a brilliant mix of competition and regulatory structure. Otherwise, there would just be a handful of choices in the market – even though in practice this is mostly the net result, as a vast majority of consumers and business utilize four or five primary carriers for their landline or cellular service.