Say what you will about FCC Chairman Kevin Martin, at least he’s consistent. After making clear his plans to be the nation’s TV nanny by extending broadcast content restrictions to cable TV, Martin now shows he has no misgivings about meddling in functional, competitive markets. Martin is leaning in favor of using the upcoming 700 MHz spectrum auction to impose network neutrality regulation thus far rejected by the FTC, Congress (last year) and several state legislatures, not to mention Martin’s bosses at the White House. And Martin is embracing neutrality for wireless, the most competitive telecom sector right now. Tacitly, he is endorsing Frontline’s bizarre and self-serving perspective that the wireless market is somehow monopolistic and exploitive. Martin apparently agrees with Frontline in that the U.S. does not have any “open” wireless networks (What’s WiFi then?). Over at Precursor.com Scott Cleland writes:
FCC Chairman Martin’s surprising proposed open access/net neutrality regulations for the 700 MHz auction, threaten to broadly chill the broadband investment necessary to deliver broadband deployment to all Americans. Ã¯ Chairman Martin apparently has chosen to abandon over a decade of bipartisan free-market Internet policy and adopt a new more regulatory “managed competition” broadband policy advocated by new House Chairman Ed Markey, who has strongly praised Chairman Martin for his support for net neutrality regulation/open access. Ã¯ The real world effect of this unwarranted core policy flip flop is to introduce new and very substantial policy, legal and investment uncertainty into what had been a very stable economic growth environment. o Chairman Martin is making the heroic assumption that he can massively interfere with market forces and heavily subsidize untested and likely uneconomic business models with no unintended consequences on investment or economic growth in the critical broadband sector. Chairman Martin has now emphatically embraced the core economic principle of former FCC Chairman Reed Hundt’s Frontline Proposal (and Frontline’s Google gaggle of investors), which is that market forces will not and cannot promote sufficient “competition” so the government must regulate and “manage competition” (i.e. mandate prices, terms and conditions — either directly or indirectly) to ensure consumer welfare.
The move is yet another instance of Martin reversing earlier statements and policies. Cleland points out that only last year Martin praised wireless competition. “The competitive marketplace for wireless services is continuing to bring consumers more choice, better services and lower prices.” This is reminiscent of Martin’s sudden call for a la carte cable pricing, when, a year earlier, he endorsed an FCC finding that said a la carte cable was not always economically feasible. Martin is taking on the worst attributes of government bureaucrat: vanity and arrogance. The past months have seen him declare himself arbiter of cable business models, censor-in-chief and now, supreme central planner of wireless competition and services. Too bad the price of this folly will be paid by American consumers and investors.