Making Sense Out of the FAA’s Power Play on 5G

           With growing frustration, the U.S. Federal Aviation Administration has failed to get traction on its concerns about the potential for harmful interference between newly activated 5G spectrum, at 3.7 – 3.98 GigaHertz, and mission critical aviation applications that use spectrum higher up in the C-band.  The squabble persists, despite an FCC decision to create an additional 20 MegaHertz “Guard Band,” in addition to the already established 200 MHz of spectrum, that must remain fallow, unavailable for use by any 5G wireless carrier, no matter how far subscribers would be from an airport, or known flight paths. See https://www.fcc.gov/auction/107/factsheet.

Upset that neither the Executive Branch, nor the FCC would consider the matter seriously, the FAA has played its trump card: ordering aviators not to use existing flight management applications that operate via C-band spectrum presumed by the FCC to be well protected from any prospect for interference.  Wireless carriers have responded by offering to postpone for one month activation of the expensive and now controversial spectrum.  See, e.g., https://www.reuters.com/technology/att-verizon-delay-c-band-spectrum-use-pending-air-safety-review-2021-11-04/.

At this point, few if anyone, can conclude whether the FAA is falsely claiming the “sky is falling.”  However, no one wants to end up on the wrong side of an aviation disaster including the wireless carriers that have spent over $85 billion in auctions for newly “refarmed” C-band spectrum. 

Stakeholders forecast and speculate the prospects for interference, often with a bias, one way or the other.  For example, the lack of selectivity in cheap GPS receivers and cellphone chipsets, provided grounds for John Deere and other farming equipment manufacturers to oppose FCC efforts to abate an acute wireless spectrum shortage by authorizing market entry by ventures such as Legado, that proposed to use spectrum nearby, but also separated by an even larger Guard Band to protect GPS spectrum.   See, e.g., https://www.fb.org/news/coalition-asks-lawmakers-to-intervene-in-gps-related-fcc-ruling.

This remarkable debate has the potential to shave billions of dollars off the value of wireless carrier shares, call into question the certainty of dedicated spectrum reallocations costing billions of dollars, and perhaps even handicap the efficacy of U.S. wireless 5 and 6G initiatives at the International Telecommunication Union, the intergovernmental spectrum planning forum.

High stakes indeed. 

Lessons From Milk Price Supports

            On a trip to see the In-Laws in Ohio, I noticed milk prices at half ($1.99 for a gallon) the rate available at home. Pennsylvania law establishes a price floor ostensibly to promote family farms and a “fair” price.  In application, so-called price supports prevent grocery stores from using milk prices as a lost leader.  Additionally, a $4 price point suppresses demand as the same time oversupply has pushed wholesale prices to record lows.  Meanwhile, intermediaries in Pa. make out like bandits exploiting the wide gap between the wholesale market price and the floor price paid by retail consumers.

            Price supports probably never made sense, but they hurt family farms now.  Of course, sponsored researchers and p.r. firms tout the non-existent benefits to the small farmer. What’s $2 a gallon if it helps sustain small farms?

            The better question: Why pay $2 more when not one dime flows downstream to the small farmer?

            The lesson here lies in the manipulation of emotions and good intentions, by stakeholders able to capture all the financial benefits.  This kind of “rent seeking” occurs all the time at the FCC.  Just now, the prospect of Huawei rigging its 5G wireless equipment for espionage warrants an absolute bar on the use of $8.5 billion in annual universal service funds available to subsidize rural access to wired and wireless telecommunication technology.  No one has offered clear evidence that Huawei equipment provides China a spying opportunity.

            Forcing Huawei out of the marketplace will raise the cost of 5G and other telecommunications equipment, particularly for price sensitive rural carriers. U.S. telecommunications consumers end up subsidizing “national heroes” even if these manufacturers sell more expensive and inferior equipment.

            Clever.

           

Result-Driven Federalism: How the FCC Rationalizes the Lawfulness of Preemption

          

            The current FCC pushes the federal preemption envelope, currently with an initiative to further constrain states and municipalities from regulating and requiring payment for wireless antenna installations on public property.  See https://docs.fcc.gov/public/attachments/DOC-353962A1.pdf.  Once upon a time, Republicans deeply respected the concept of federalism: deference to state rights and reticence to extend the wingspan of federal oversight and interference.  Such regulatory humility evaporates when preemption achieves countervailing goals.  

            For wireless antenna site policy, the FCC majority sees the need to preempt greedy non-federal governments who want to extort money from wireless carriers.  Apparently, the goal of preventing outrageous rent extraction and delays in authorizing national security enhancing 5^th Generation wireless justifies aggressive preemption, despite clear language in the Communications Act mandating shared jurisdiction.

            I can appreciate that some city councils, in particular, might look at wireless tower site authorization as a cash cow.  I can anticipate that some municipalities might try to extort outrageous payments and use the prospect of delay as negotiating leverage.  But I also can see wireless carriers using the FCC as lead blockers to beat municipalities and their citizens into submission.  What’s good for a wireless carrier must be good for society, right?  Tower siting decision making has nothing to do about aesthetics and respecting history and everything to do about ripping off big, bad corporations.

            Antenna siting has become a contentious issue, because of an ever increasing number of needed locations.  The migration to 5^th Generation wireless service will trigger a massive increase in antenna sites, because new technologies have smaller “footprints” requiring more antenna installations.  This matter is all about money, but conflicting interpretations of federalism partially obscure this reality.

            Money and serving different constituencies force FCC regulators to abandon any semblance of jurisprudential consistency.  In this strange time, a political party predisposed to support federalism and reliant on the Federalist Society to vet judicial candidates, has to turn its back on a baseline and fundamental philosophical construct.  Republican FCC Commissioners want largely to preempt states and municipalities from economic regulation of wireless tower sites, but they rallied around the state’s right flag when their Democratic counterparts wanted to preempt state laws prohibiting the installation or expansion of Wi-Fi and other broadband networks.  The Sixth Circuit Court of Appeals accepted the argument that Congress did not sufficiently articulate a federal mandate of supporting broadband technology deployment and preventing laws, regulations and policies that thwart this goal.  See http://www.opn.ca6.uscourts.gov/opinions.pdf/16a0189p-06.pdf.

            Reasonable people can disagree agreeably about the breadth, reach and scope of the FCC’s jurisdiction.  What I can’t tolerate is the sanctimony and righteous indignation of federalist advocates who readily ignore the principle when favored stakeholders knock on their door.

             

Corporate Welfare, Cronyism and Excess: The AccuWeather Case Study

            Bloomsburg BusinessWeek provides a thorough and distressing account of unsavory business practices originating in my small town.  See https://www.bloomberg.com/news/features/2018-06-14/trump-s-pick-to-lead-weather-agency-spent-30-years-fighting-it.  The article reports how President Trump has nominated Barry Lee Myers, CEO of AccuWeather, to lead the National Oceanic and Atmospheric Administration, which has the National Weather Service (“NWS”) under its aegis.  Might this candidate constitute the proverbial fox guarding the chicken coop? 

            AccuWeather adds value to a taxpayer underwritten, government function.  The company enhances the data it freely acquires.  I have no problem with that.  The company does not participate in a public private partnership, by investing funds in a joint venture with the government.  Instead, it masterfully executes a business strategy of adding human presentation and interpretation of weather data in a graphics-intensive, user friendly format.  So far, the company offers a case study in brilliant execution of a business plan. Bravo.

            Sadly, the company overreaches and has done so for years.  Its lobbying activities and advocacy in Washington, D.C. evidence a campaign to stifle the NWS from doing anything that could reduce the “wingspan” and profitability of the company’s products.  Simply put, AccuWeather wants Congress to restrict public dissemination of NWS-acquired and taxpayer-financed data. 

            Accuweather wants to prevent the NWS from any “retail,” direct-to-public data dissemination and analysis, particularly via direct Internet outlets and indirectly via social networks such as Facebook.  Here the company attempts to bite the hand that feeds it.  The possibility of more scrutiny of its business practices may risk its ability to pay nothing for the data it needs to create profitable products.

            AccuWeather appears unsatisfied with its considerable organic growth over many years.  It perceives the NWS as a competitor who offer content at zero additional cost even as AccuWeather wants payment for somewhat similar products. Already, the public does not see NWS employees on television, or the Internet except for the occasional interview on the Weather Channel and broadcast networks.  Likewise, the NWS web presence lacks the userfriendliness available from AccuWeather. 

            Here’s an example of the rarified product the NWS offers in its Forecaster Discussion section for State College, PA on July 15, 2018:

             "Potent cold front will plow SE through the NW mtns Late Tuesday morning and clear our SE zones late in the day. High PWAT air, increasing deep layer shear and increasingly diffluent flow aloft will set the stage for some strong to potentially severe TSRA depending on the amt of sunshine, CAPE and the exact timing of the cfront."

             They do offer a glossary, but clearly the NWS is no competitor to AccuWeather’s general consumer products.

            The BusinessWeek article shows how Accuweather has undertaken a long term and relentless campaign to limit the scope and reach of NWS work product.  In effect, AccuWeather wants to rely on the NWS for rough data, as evidenced by the dozens of satellite earth stations installed at company headquarters.  AccuWeather receives the data and converts it into something user-friendly and profitable for the company.  In AccuWeathers self-serving mindset, it constitutes rampant socialism and “mission creep” for the NWS to serve the public directly, particularly via the Internet even if a timely Facebook post might save lives.  AccuWeather does not want the risk of liability in being the sole forecaster and outlet for severe weather, but it surely wants social networks and other Internet-based sites as green fields for growth completely free of any government-supplied content.

            AccuWeather’s strategy shows how something smart can become too clever over time as as a company becomes increasingly aggressive in tactics to secure captive markets and growth.  Not content to further mine and extend its well established market presence, the company wants to throttle NWS public outreach.  This does not serve the national interest, because not everyone—even with the widespread use of smartphones—receives forecasts and urgent weather information from value added services like AccuWeather and the Weather Channel. 

            I get my weather forecasts via radio, but not from the fast-paced local inserts originating at the AccuWeather mother ship.  In many locales, the NWS transmits continuously in the Very High Frequency band (around 162 MegaHertz).  I’m sure AccuWeather would like to confiscate my radio, or failing that, to lobby Congress for legislation terminating this option.

Hidden in Plain Sight: FCC Chairman Pai’s Strategy to Further Concentrate the U.S. Wireless Marketplace

          While couched in noble terms of promoting competition, innovation and freedom, the FCC soon will combine two initiatives that will enhance the likelihood that Sprint and TMobile will stop operating as separate companies within 18 months.  In the same manner at the regulatory approval of airline mergers, the FCC will make all sorts of conclusions sorely lacking empirical evidence and common sense. 

            FCC Chairman Pai’s game plan starts with a report to Congress that the wireless marketplace is robustly competitive.  The Commission can then leverage its marketplace assessment to conclude that even a further concentration in an already massively concentrated industry will not matter. Virtually overnight, the remaining firms will have far less incentives to enhance the value proposition for subscribers as TMobile and Sprint have done much to the chagrin of their larger, innovation-free competitors AT&T and Verizon who control over 67% of the market and serve about 275 million of the nation’s 405 million subscribers.

            Like so many predecessors of both political parties, Chairman Pai will overplay his hand and distort markets by reducing competition and innovation much to the detriment of consumers.  He can get away with this strategy if reviewing courts fail to apply the rule of law and reject results-driven decision making that lacks unimpeachable evidence supporting the harm free consolidation of the wireless marketplace.  Adding to the likely of successful overreach, is the possibility of a muted response in the court of public opinion.

            So how will the Pai strategy play out?  First, the FCC soon will invite interested parties to provide evidence supporting or opposing a stated intent to deem the wireless marketplace sufficiently accessible and affordable throughout the nation.  The FCC has lots of evidence to support its conclusion, but plenty of countervailing and inconvenient facts warrant a conditional conclusion, particularly in light of future market consolidation.  Wireless carriers have invested billions in network infrastructure and spectrum.  Rates have significantly declined as the industry has acquired scale and near full market penetration.  Bear in mind that all of this success has occurred despite, or possibly because of a federal law requiring the FCC to treat wireless carriers as public utility telephone companies.  Congress opted to treat wireless telephone service as common carriage, not because of market dominance, but because it wanted to maintain regulatory parity with wireline telephone service as well as apply essential consumer safeguards. 

            How ironic—perhaps hypocritical—of Chairman Pai and others who surely know better  to characterize this responsibility as the product of overzealous FCC regulation that has severely disrupted and harmed ventures providing wireless services.  Just how has common carrier regulation created investment disincentives for wireless carriers when operating as telephone companies?  Put another way, how would removal of the consumer safeguards built into congressionally-mandated regulatory safeguards unleash more capital investment, innovation and competitive juices?

            U.S. wireless carriers regularly report robust earning and average revenue per user that rival any carrier worldwide.  Of course industry consolidation would further improve margins while relaxation of network neutrality and privacy protection safeguards would create new profit centers.  TMobile shareholders get a big payout, while the remaining carriers breath a sigh of relief that their exhaustively competitive days are over.

            Will the court of public opinion detect and reject the FCC’s bogus conclusion that common carrier regulation has thwarted wireless investment and innovation?  That requires a lot of vigilance and memories of the bad old days when no carrier opted to play the role of maverick innovator and marketplace disrupter.  With TMobile or Sprint merged or acquired, the remaining ventures have ever more incentives not to spend sleepless afternoons competing and devising new ways to stimulate customer interest in changing carriers.  TMobile and Sprint have offered just about every value enhancement in recent years such as carry forward minutes, reduced roaming charges, unlimited service, new bundles and use your own device at much lower monthly rates.  Would these options exist if only three carriers served 95% of the market?

            If you think the recent spate of airline mergers has enhanced competition and the air travel experience, then a wireless marketplace with 3 national carriers will work out just peachy.

FCC Chairman Pai's Results-Driven Decision Making

Hello All:

In a contribution to The Hill, I take issue with FCC's Chairman Pai's commitment to sound economics and empirical fact finding even as he engineers results-driven outcomes.  See http://thehill.com/blogs/pundits-blog/technology/332503-ajit-pai-too-focused-on-deregulation

Consistently Inconsistent: How Very Large ICT Ventures Cannot Maintain a Consistent Legal/Regulatory Posture

            Technological and marketplace convergence makes it increasingly difficult for large, integrated firms, like AT&T, to maintain a single, consistent position on legal and regulatory issues.  This results in rich, irony. 

            Consider AT&T’s recent Kentucky law suit to prevent Google Fiber from using federal pole attachment law to secure access to AT&T-owned telephone poles, at relatively attractive rates, using a congressionally created formula.  See, e.g., http://www.bizjournals.com/louisville/news/2016/05/25/where-at-ts-lawsuit-against-the-citystands.html. 

            This litigation reeks of irony, because AT&T, in its capacity as an Internet Service Provider, would qualify under federal law to attach lines to poles owned by electric, telephone and cable television companies.  Federal pole attachment law prevents companies from refusing to provide pole access, or to allow access, but only at extortionate rates.  AT&T surely would benefit in cities where it does not own telephone poles and needs to install lines using the poles of another, potentially competing company.  But of course AT&T does not make it a practice of trying to compete in localities where it does not also happen to owe telephone poles.

            Adding to the irony—make that disingenuousness and other D words—is AT&T’s consistent legal and regulatory position on state and municipal laws and ordinances affecting access to cellphone towers.  When it comes to that technology, which AT&T considers a functional equivalent and competing option, the company vigorously asserts that federal law preempts state and municipal laws.

            Clearly both wireline and wireless access to the Internet qualifies as interstate telecommunications.  A long body of case precedent supports a “contamination” standard that favors federal preemption, and in turn FCC jurisdiction, whenever a line carriers both interstate and intrastate traffic that cannot be separated.  AT&T regularly seeks federal preemption of state and municipal laws that impose any sort of cost, delay, environmental impact assessment, etc. Federal preemption renders the state and municipal law invalid and inapplicable. 

             The FCC recently failed to convince an appellate federal court that the Commission should be able to preempt any and all state laws that limit or prohibit municipalities from offering Wi-Fi service. See http://docs.techfreedom.org/Tennessee_v_FCC.pdf.

This means there are some instances where federalism prevails, i.e., the national legislature did not clearly and unconditionally prevent states from enacting laws and some argument can be made that the law does not affect interstate commerce.  But when it comes to still lawful state and municipal laws affecting tower locations, etc. AT&T speaks clearly and unconditionally: that federal law severely restricts what states and municipalities can do, despite the intense local nature of tower siting issues.

            Ironically, AT&T’s absolute certainty that federal law trumps states and cities in terms of wireless Internet access, does not extend to functionally equivalent wireline Internet access.  This has nothing to do with respecting the “Rule of Law” and everything to do with stifling Goggle and the innovation and price competition it would offer. 

             The same conclusion applies to those incumbent carriers opposing municipal Wi-Fi networks and coverage expansion.  These carriers invoke law to short-circuit competition, but in other forums invoke the same laws, policies and precedent to justify their lawful right to ignore state and municipal law.  Consider this strategy rent seeking and not some lofty respect for the Constitution.

             

One Minute on How Washington and the Law Screw the Powerless

            Start the clock.

            After neglecting the issue for years, the FCC Democrats seek to reduce rip off in-mate calling rates to between 11 and 14 cents per minute.  See https://www.fcc.gov/document/fcc-takes-next-big-steps-reducing-inmate-calling-rates; https://www.fcc.gov/consumers/guides/inmate-telephone-service; http://arstechnica.com/tech-policy/2016/03/in-blow-to-inmates-families-court-halts-new-prison-phone-rate-caps;

 

            The two major inmate calling companies, which had offered incredibly lucrative kickbacks to jails, retain the services of the best counsel money can buy, roughly $600 an hour. 

            These quite talented counsel, one of whom I worked with many years ago, seek and secure an injunction on grounds that the FCC lacks lawful authority to interfere with the sweetheart contracts with jail administrators.

            The grant of an injunction typically means the court buys the telephone company’s legal arguments.  Put another way, the court won’t reject incredible rip off, kickbacks as unconscionable and void against public policy.  So it’s appears that if you’re in jail, you should have to pay up to $17 in fees for the privilege of making a telephone call and the rate should gross exceed by one cent per minutes or less cost of the call to people outside the pen.  How dare the FCC interfere with the “sanctity of contract!”

 

            Add to the mix a snarky and mean-spirited “I told you so” by a righteously indignant Republican FCC Commissioner. See https://www.fcc.gov/document/commissioner-pai-dc-circuit-staying-inmate-calling-rate-regulation

            Get the picture?

Why Should We Care? 

            We should care, because of the reverse logic used by counsel and accepted by the D.C. Circuit.  It goes like this: inmate calling services can offer incredibly generous kickbacks to jails, because they can charge incredible rates.  The FCC has no rate ceiling on interstate long distance calls having eliminated such a consumer safeguard based on a finding that robust competition would generate fair and cost-based rates.  Of course there are in jail monopolies which can charge anything they want in light of the now eliminated caps.  If the telephone companies offer a kickback, then no one complains other than the inmates and their families and why should we care about them.  They are convicted criminals and family members of convicted criminals.

 

            An FCC attempt to supersede a lawful contract exceeds the Commission’s lawful authority having deregulated long distance telephone service.  So the argument goes around in circles with no one apparently looking at the rates vis a vis the kickbacks.

            No one can argue that the rates are cost based and fair, but of course that doesn’t stop the Attorney General of Arkansas and others from cheering on the kickbacks. See  http://arkansasag.gov/news-and-consumer-alerts/details/rutledge-d.c.-circuit-grants-stay-of-costly-fcc-order.

            Instead they can make the argument that once willing parties have entered into a binding contract, the FCC cannot subvert it by identifying how cruel, unusual, harmful and the contract is. 

 

             

The Impact of Regulation on Broadband Investment

           Several sponsored researchers have floated the notion that network neutrality and Title II common carrier regulation constitute the major reason why U.S. broadband carriers apparently have reduced capital expenditure in new and replacement physical plant.  Does this pass the smell test?  Is there any empirical data proving causality?  Would these allegation pass muster under appropriate peer review?

           Let’s get one principle straight: capex in most industries primarily correlates with competitive necessity and the life cycle of sunk investments.  In the U.S., wireless cellular radio companies bear the burden of streamlined Title II common carrier regulation.  Such regulation has not dissuaded these carriers from sinking billion in spectrum auctions and in plant investment.  The FCC swears that broadband access providers will encounter even less regulatory oversight than wireless carriers.

           Similarly, a year over year analysis of capex might have little to do by way of regulation impact on the incentive to invest and much more on whether and when a carrier needs to invest in new, or replacement infrastructure. Ventures with very high plant investments typically also have capacity that comes online or offline in very large increments.  For example, a satellite company like Intelsat, Dish, Sirius-XM and DirecTV will show a significantly higher plant investment in years when it has to replace an in-orbit and soon to be deactivated satellite.  Variability in capex has nothing to do with whether regulation ebbs and flows in terms of severity, or burden.

          I will concede that telecommunications management may tinker with capex as political leverage for less regulation.  AT&T CEO Randall L. Stephenson has said as much, but do you really think he would ration capex if it would render his company and its services comparatively inferior to what other wireless carriers offer?

          Telecommunications carriers and their sponsored researchers also like to trot out “regulatory uncertainty” as a capex disincentive.  In the same breath, they also like to claim regulation operates as an unconstitutional “taking” of their property and the capex they previously made.  Newsflash: regulation in telecommunications constitutes a cost of business that incumbents and prospective market entrants alike have to take into consideration.

          Bottom line: regulation and uncertainty about the future of regulation has limited impact on capex decision making.  If a carrier can make do with less investment it will do so.  Right now most airlines are replacing kerosene guzzlers with more efficient and cheaper models.  They might also “right size” inventory with smaller aircraft.  Such a reduction in overall passenger capacity and in investment responds to marketplace conditions not whether aviation regulators have become more aggressive.  The same concept applies to telecommunications.

Netflix “Most Favored Nation,” Paid Peering Agreement With Comcast: The Good, Bad and Ugly

            Notwithstanding Comcast’s open Internet access commitment made to close the NBC-Universal acquisition, the company has executed a preferential access deal with Netflix.  For me the primary question is what kind of discrimination does “better than best efforts” routing constitute?

            At the risk of giving an inch so Comcast can take a mile, I consider paid peering a reasonable quality of service discrimination with several caveats.  First the possibility exists that payments flowing directly from Netflix to Comcast are largely offset by reductions in the direct payments the company makes to Content Distribution Networks like Level 3 and Cogent.  Netflix and its customers benefit from higher quality of service with fewer intermediary carriers and routers. 

Of course no one knows, because the parties execute nondisclosure agreements and the FCC has not thought to require disclosure.  Perhaps with its new found emphasis on transparency the FCC will demand disclosure of all “special routing arrangements” complete with redacted public release of the agreements.

More direct traffic routing probably accords Comcast greater leverage upstream with Netflix and similarly situated content providers.  Without adequate oversight nothing prevents Comcast from making paid peering—and the surcharge it incorporates—standard operating procedure.  In other word little remains of plain vanilla “best efforts” routing: Comcast can demand similar payments from other content providers and distributors backed up by a not so veiled threat that it simply will not have adequate downstream delivery capacity to accommodate even what it previously was able to handle. 

Such contrived congestion forces almost every upstream venture, with the financial resources available, onto some type of premium service provisioning.  In other words there probably will be a rush to “Most Favored Nation” quality of service making it the default standard, even though ISPs previously accommodated increasing network demand without upstream carrier surcharges.  Retail ISPs either absorbed the cost of upgrades as a cost of doing business, or they raised retail rates.  Now they can do both.  Just last week AT&T announced significant increases in retail broadband access rates.

Perhaps other content providers, generating less traffic, can continue to squeeze by with standard best efforts routing.  But why would a competitor of Netflix risk the consequences knowing that ISPs like Comcast can throttle, degrade and create artificial congestion without FCC sanction.  Bear in mind that retail ISPs can create bitstream delivery problems without their broadband subscribers knowing the cause and the responsible party. 

Consumers can complain all they want about a reduced value proposition from their $30-75 monthly subscription payments, but competitive carriers are scarce and unlikely to refrain from such higher rent extraction options themselves.  

Netflix must have decided that the sooner it can lay to rest the risk of artificial or real downstream congestion the better.  It also must have considered a near term solution as according it the cheapest option, knowing that going forward Netflix competitors also will have to pay perhaps on less generous terms.  So Netflix secures a competitive advantage even as retail ISPs extract more revenues.

Expect Netflix to respond with new service tiers and higher rates.

Rent Seeking Across Party Lines

            Over many years, telecommunications and Internet policymaking have become politicized often with clear cut Democratic and Republican viewpoints.  Votes by the FCC Commissioners increasingly split 3-2 along party lines.   How can this be?

             Perhaps the politicization stems from higher stakes in FCC votes which in turn have stimulated greater interest in the outcome.  But politicization stands as a cause if and only if a specific political party clearly holds one perspective largely opposite that of the other party.  Don’t both parties support competition? They do, but a dichotomy might arise if the Democrats readily welcome government initiatives to promote competition and the Republicans consider competition most potent when government opts out.

           
            At first blush the role of government can support a Democratic/Republican dichotomy, but it does not always play out.  Teddy Roosevelt made it his mission to bust up monopolies and this Republican “tradition” extended into the early 1970s when the Nixon Administration filed suit against the AT&T monopoly.  Democratic FCC Commissioners regularly vote in favor of market concentrating, competition reducing horizontal mergers

 

             So maybe the blame lies with unprincipled and apolitical rent-seeking.  Stakeholders keen on working less hard and earning greater returns will resort to any political, legal and economic ideology and philosophy to support the desired outcome.  It is quite fine when the FCC granted incumbent wireline telephone free spectrum for mobile services, but now denying these carriers the opportunity to bid for any and all spectrum is an abomination.
 

             Let’s not underestimate the power of sponsored research where esteemed scholars grab lots of dollars for embracing a specific ideology and explaining how it serves the public interest.  In a matter of days the very same economist might rail against the Herfindahl Hirschman Index (“HHI”) of market concentration as flawed and not predictive of anything.  But when presented with an assignment and a generous retainer to show how robustly competitive a market is, that economist might quickly invoke the HHI to “prove” how competition can exist in a concentrated marketplace.
 

            Rents seeking crosses all party lines.