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Posts Tagged ‘competition’
May 13th, 2015 at 8:03 pm
The Two Faces of T-Mobile

The recent release of the Apple Watch was a momentous occasion that has become routine for American consumers: another breakthrough mobile product hitting the marketplace. Whether new devices or continuous improvements to smartphones and other devices on which we all rely, almost all of us use gadgets that just ten years ago would have been considered science fiction.

Less well known to consumers is the technical foundation of the entire ecosystem upon which such devises operate. Specifically, wireless spectrum is the invisible infrastructure that carries data between devices and to the broader Internet. Wireless companies compete fiercely for this resource so that they can provide good service for their customers.
 
That’s why – despite the fact that the Federal Communications Commission (FCC) is auctioning off coveted broadcast spectrum next year, an eternity in tech terms – the jockeying between potential bidders has already started. Two of the major players in particular, Sprint and T-Mobile, have been ceaselessly calling for the FCC to create auction rules that benefit them at the expense of their competitors. Their latest request is for a larger set-aside to limit the amount of spectrum on which competitors AT&T and Verizon can bid. 

This isn’t the first time the two companies have made such a request.  The FCC didn’t accept it last time, and it shouldn’t now as the only change is that Sprint and T-Mobile now are pushing their shared agenda through the recently (and conveniently) formed “Save Wireless Choice” coalition.

This is a terrible idea for several reasons, not the least of which is the fact that Sprint and T-Mobile are dynamic companies that compete fiercely in the wireless industry. Don’t just take our word for it. On a recent call with Wall Street analysts, T-Mobile CEO John Legere bragged that T-Mobile has “a great spectrum portfolio. That’s allowed us to be smart and opportunistic,” and claimed that the company was “off to an incredible start to 2015 with the best customer growth in the industry fueled by disruptive Un-carrier moves and the network that continues to be America’s fastest.”  Similarly, Sprint CEO Marcelo Claure asserted that he “couldn’t be more confident that now [Sprint has] the right plan to be successful” and acknowledged Sprint’s “rich spectrum portfolio.”
 
Legere and Claure’s comments to Wall Street make their plea to the FCC – that they cannot compete with AT&T and Verizon in the upcoming auction or in the industry long-term – completely disingenuous. Furthermore, Sprint chose to sit out of the recent AWS-3 auction, and it was DISH, not AT&T or Verizon, that outbid T-Mobile most on licenses it sought but didn’t win.
 
Indeed, it was DISH’s shady dealings during the AWS-3 auction that demonstrate the danger of rules that favor certain players over others in the marketplace. DISH used shell companies to take advantage of the FCC’s Designated Entity program, a program that is supposed to help small companies buy spectrum by giving them a discount.  That sleight of hand with DISH will cost taxpayers a stunning $3.3 billion unless the FCC investigates and rejects the taxpayer-funded discount.
 
At the end of the day, Sprint and T-Mobile are massive, competitive companies backed by large, foreign corporations, Softbank and Deutsch Telekom. Even if that were not the case, the recent experience with DISH should be a giant red flag about the unintended consequences of rules that favor certain companies.
 
In order for consumers to continue reaping the benefits of the wireless revolution, they need more spectrum to be allocated in the most efficient way possible. In the 2016 incentive auction, that means straightforward rules that treat all bidders equally. This principle has taken us to where we are right now, and it would be a mistake to jeopardize this progress by giving in to the self-serving pleading of two companies.

February 28th, 2014 at 10:11 am
Video – Comcast-Time Warner Merger: Antitrust Hysteria
Posted by Print

In this week’s Freedom Minute, CFIF’s Renee Giachino discusses the irrational antitrust hysteria by critics of Comcast’s proposed purchase of Time Warner Cable and explains why their concerns are baseless in fact and reality.

June 17th, 2013 at 4:33 pm
In the Battle of Ideas, the South is Winning
Posted by Print

Federalism essentially allows us a controlled experiment in which we can examine which policies work and which don’t by examining the contrasts between states that have chosen different paths. The results, as Joel Kotkin notes at the Daily Beast, are pretty lopsided:

The North and South have come to resemble a couple who, although married, dream very different dreams. The South, along with the Plains, is focused on growing its economy, getting rich, and catching up with the North’s cultural and financial hegemons. The Yankee nation, by contrast, is largely concerned with preserving its privileged economic and cultural position—with its elites pulling up the ladder behind themselves.

… While the Northeast and Midwest have become increasingly expensive places for businesses to locate, and cool to most new businesses outside of high-tech, entertainment, and high-end financial services, the South tends to want it all—and is willing to sacrifice tax revenue and regulations to get it. A review of state business climates by CEO Magazine found that eight of the top 10 most business-friendly states, led by Texas, were from the former Confederacy; Unionist strongholds California, New York, Illinois, and Massachusetts sat at the bottom.

… Over the past five decades, the South has also gained in terms of population as Northern states, and more recently California, have lost momentum. Once a major exporter of people to the Union states, today the migration tide flows the other way. The hegira to the sunbelt continues, as last year the region accounted for six of the top eight states attracting domestic migrants—Texas, Florida, North Carolina, Tennessee, South Carolina, and Georgia. Texas and Florida each gained 250,000 net migrants. The top four losers were New York, Illinois, New Jersey, and California.

There are only two options for the boutique coastal states and the union-dominated interior: emulate the South or be supplanted by it. This should be fun to watch.

January 22nd, 2011 at 6:13 pm
In Defense of Presidential Political Markets

The Weekly Standard’s Bill Kristol writes a terrific defense of market forces in selecting the next Republican presidential nominee.

Here are two choice paragraphs:

This vision should be easy for conservatives to embrace. Believers in the free market understand the virtues of competition, of low barriers to entry, and of lots of opportunities for (so to speak) price discovery. We know the superiority of spontaneous order to central planning. But too many GOP bigwigs in Washington who claim to have read Hayek have succumbed to the fatal conceit. They’re meeting nonstop trying to determine for us all now, a year before the first primary—with limited information as to relevant candidate skills and almost no knowledge of next year’s political environment—who the best presidential candidate would be.

Democratic capitalists admire Schumpeter for explaining the virtues of creative destruction. But too many donors to the party of democratic capitalism are huddling in New York this winter figuring out if there isn’t some way to short-circuit this kind of healthy—if messy, to be sure—competition among entrepreneurial candidates testing their skills and their messages. Wealthy individuals who made their fortunes by defying the odds are trying to figure out who’s the odds-on favorite to win the GOP nomination so they can cluster behind him. Businessmen who swear by the virtues of competition decry the fact that there will be lots of competition for the GOP nomination. Shouldn’t they instead welcome the competition, even encourage it by putting a little venture capital behind several nominees to see how they do? Markets work, and political markets work too. At least, they’re better than the alternative.

Read all of Kristol’s argument for robust political competition here as an antidote for the establishment and media’s tendency to call results much too early.