Moving in
for the kill, incumbent carriers have stretched their home team advantage. With millions in lobbying, campaign
contributions and sponsored research, along with a like-minded FCC majority, the
unpleasantness of the prior 8 year Obama stretch largely will evaporate very
quickly.
Money well
spent.
Rather than
frame regulatory debates in terms of midlevel issues of economic theory and
political philosophy, think lower tier: cold hard cash money. Follow the money.
Regulation
impedes businesses like AT&T and Verizon from achieving even greater
profitability, unless of course a captive regulator can be persuaded to tilt the
competitive playing field by disadvantaging one or more competitors. Incumbents have convinced decision makers
that when regulation prevents profit maximizing behavior, there better be a
damn good reason. Notions of equity and
level competitive playing fields will not suffice even though the advocates for
deregulation do not have to meet a similar burden when claiming existing rules “stifle
innovation” and “kill jobs.”
The incumbent
camp waxes poetic how regulation has preempted billions in investment, hurt
employment and reduced innovation. But how can they prove this? Answer: they don’t have to.
No decision
maker—certainly not the FCC—has called upon AT&T, Comcast, Verizon and
others to show how network neutrality singularly has prevented incumbents from
making investments, or that there are fewer patent applications and workers
because network neutrality has poisoned the ecosystem.
Where are
the economics, empiricism and analysis that FCC Chairman Ajit Pai claims his
management will deliver? It’s nowhere to
be seen, unless you accept conjecture as sufficient. From the FCC across to incurious, deadline
worrying reporters, the prevailing network neutrality frame is that somehow
eliminating it will “free” stakeholders to do more good than what they now can
do. Exactly how does a non-discrimination
requirement stifle profitability? How is
this requirement resurrection of old school public utility regulation of a non-existent
monopoly?
No one has
to answer such questions.
As to the
other big issue of the news cycle today, no one asks whether AT&T’s
acquisition of Time Warner’s content has impacts outside the vertical food
chain of content creation and distribution. So this $85 billion deal is nothing
more than your garden variety vertical merger which “everyone knows” is both
benign and always permissible.
Ask
creators and distributors of content who compete with AT&T what the merger
will do. If they can overcome their fear
of retaliation, you might see the AT&T mothership able to extract
concessions from upstream content sources seeking access to AT&T
satellite, cellular and wireline customers.
And you might see how raising costs of doing business for competitors
makes it highly likely that churning customers might beat a path to one of the
3 content distribution flavors AT&T has to offer.
