Updated on August 4th, 2010
Until recently, the Digital Millennium Copyright Act prohibited most digital locks on copyrighted material, including the computer firmware and software in wireless handsets. Last week, the Library of Congress published an Order exempting several classes of copyrighted works from this prohibition, including wireless handset operating systems and firmware or software “locks.” (See Order at pages 4-7.) Advocates that favor a regulated broadband access device market hailed this as a victory. (See Free Press statement here and Public Knowledge statement here.) These advocates believe that imposing Carterfone and Computer Inquiry obligations on wireless devices will produce results that are superior to those consumers currently enjoy in the competitive wireless market. Unfortunately for these advocates, the actual data (as opposed to ideology) supports the opposite conclusion.
It’s usually quite difficult to prove a negative – i.e., that consumers would actually be worse-off if Carterfone and Computer Inquiry regulations had been applied to wireless devices. But, because Carterfone and Computer Inquiry regulations do apply to wireline service providers, we have an analogous market to which we can compare the development of devices pursuant to Carterfone and Computer Inquiry regulations with the market-based approach applicable to wireless devices. That comparison indicates that the lightly-regulated mobile device market is more competitive and consumer friendly than the heavily-regulated Carterfone and Computer Inquiry era wired Internet and PC markets have ever been. Read the rest of this entry »
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Updated on June 4th, 2010
“The sum of anecdotes is not data.” Roger Brinner (economist).
As someone who took pride in my role overseeing the production of the 12th CMRS Competition Report, I read with great interest the 14th Mobile Wireless Competition Report (“14th Report”). Although I was impressed with many elements of the 14th Report, I was also perplexed by some of its conclusions. Perhaps the most perplexing aspect of the report is its discussion of spectrum, in which it relies on a number of anecdotes masquerading as data to reach a new “conclusion.”
The new element of the 14th Report in respect to spectrum is its discussion of the differences between spectrum below 1 GHz and spectrum above 1 GHz. For the first time ever the FCC concludes that “providers whose spectrum assets include a greater amount of spectrum below 1 GHz spectrum may possess certain competitive advantages for providing robust coverage when compared to licensees whose portfolio is exclusively or primarily comprised of higher frequency spectrum.” (14th Report at paragraph 283.) But the 14th Report doesn’t include any actual data supporting this “conclusion.” The 14th Report instead relies on a series of anecdotes to justify its new position, and doesn’t attempt to quantify the extent of any such competitive advantage (assuming one actually exists) at all. Without some data demonstrating that differences in frequency actually yield significant competitive advantages, the “conclusion” is really just a hypothesis. Read the rest of this entry »
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Updated on May 20th, 2010
For the first time in many years, the FCC’s annual “CMRS” competition report (now called the “mobile” competition report) does not find that the wireless marketplace is “effectively competitive.” At today’s FCC meeting, Wireless Bureau Chief Ruth Milkman said the Bureau felt it should analyze the data without reaching a conclusion, but didn’t say why the Bureau felt that way. Unfortunately, I fear the real answer is that the FCC wants to engage in heavy-handed regulation of the wireless industry and doesn’t want a finding of “effective competition” to get in the way. Read the rest of this entry »
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