Award Winning Blog

Sunday, September 9, 2007

Recommended Reading

I stongly recommend The radio and the Internet written by law Professor Susan Crawford:http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1007221.

Professor Crawford skillfully examines how prevailing political motivations, including accommodating incumbent dominant wireless and Internet access carriers, largely dominate how the FCC will auction choice 700 MHz spectrum.

Professor Crawford concludes by stating if the FCC "get[s] this wrong, the consequences will be severe." Regretably I think your last sentence should read "The FCC got this wrong and we will suffer in the competitive global information marketplace."

I can't get over feeling that as usual the fix is in. Sponsored researchers seem to have greater credibility and reach than Professor Crawford and me. They appear to have gained traction in explaining why forcing wireless carriers to accomomdate any handset ("wireless Carterfone policy) is unnecessary, bad policy and illegal. For example, Robert Hahn, Rober Litan and Hal Singer claim that Carterfone made economic sense only in a vertically integrated uncompetitive wireline marketplace, and that it would be ill-advised if not illegal for government to receive auction revenues and impose confiscatory regulatory conditions. See http://papers.ssrn.com/sol3/papers.cfm?abstract_id=983111.

After I recover from painful knee ligament reconstruction Monday 9/10 I hope to follow up with an explanation why vertical integration was not the primary reason for Carterfone and certainly does not constitute a condition precedent for applying the policy wirelessly. Besides even without strict vertical integration, the wireless oligopoly surely can leverage market power to foreclose a resale/secondary market for handsets by collectively blocking the benefits in refusing to offer lower rates for subscribers who "bring their own phones" and do not receive a handset subsidy.

1 comment:

john said...

Nice blog. Thats all.