free press

(Un)Free Press Sticks it to the Essentials

by Jack O'Connor on July 30, 2009

in Regulation, Tech & Telecom

The latest missive from the folks at Free Press has crossed the line:

When challenged, the wireless carriers actually compare their industry to another: soda.

This is from the Times editorial on July 22:

Phone companies point out that exclusivity agreements are commonplace in other industries. For example, they say, it is not often that one finds a restaurant serving Coke and Pepsi.

Sorry, but cell phones aren’t soda. Unlike carbonated sugar water, cell phone choice, network access and the mobile Web are increasingly essential components of a democratic society. We rely on them for access to the information we need to be engaged citizens in the 21st century.

Free Press doesn’t even bother to challenge the logic, because it’s absolutely true. Exclusivity deals are as anticompetitive as vending machines, which is to say, not at all. But no, apparently the state needs to take control of mobile phones because that market is more “essential.”

What isn’t essential? Can our democracy forgo cars or trains? Could this Great Society exist without food, water, or power? What about televisions, computers, or operating systems? Books or universities?

And what is the track record so far for government’s hand in industry? The Interstate Commerce Commission was founded in 1887 to ensure “fair” operation of the railroads, and it quickly became the very definition of regulatory capture. FDR created the Civil Aeronautics Board with the same intentions, yet its greatest success was finally managing to dismantle itself. The US Postal Service survives today as an anemic jobs program, because competing with it is illegal. How many failures does it take to lose faith?

It should have taken just one. We tried regulating phones before. We wanted to ensure universal service as far back as the 1920s. The FCC nationalized the industry during WWI and then gifted it to AT&T, in exchange for the company’s help in building a nationwide network. The network grew entirely as planned–just as the FCC wanted–and we created a monster that held back the telephone industry for decades.

Free Press claims that essential services can’t be trusted to the market. I can only ask, who on Earth do they trust?

Crews in the News: Consumer Choice Doesn’t Come From Regulation

by Jack O'Connor on July 8, 2009

in Deregulate to Stimulate, Economy, Regulation, Tech & Telecom

CEI’s own Wayne Crews is quoted in the Boston Globe this morning, explaining why real competition — not government-mandated ‘openness’ — is the best way to promote consumer choice.

Wayne takes issue with Ben Scott of Free Press, who describes cellular data access as “a classical net neutrality issue.’’ Apparently placing legal burdens on any new web platform is Mr. Scott’s strategy for encouraging the spread of mobile internet access…

America’s Ranking Crisis

by Jack O'Connor on July 1, 2009

in Stimulus to Nowhere, Tech & Telecom

With every passing month, the United States falls further behind the global leaders in broadband Internet access thanks to a combination of market and policy failures…Our broadband problem is becoming a crisis.
- Free Press, 2006

Much ink has been spilled over the claim that the US is “falling behind” in broadband. Most of that rhetoric centers around a single statistic: the Organisation for Economic Co-operation and Development (OECD) ranks the US 15th in the world in broadband connections per capita. The accuracy of that ranking has been criticized (as have other measures of our alleged lag), but today we’re going to play ball. Suppose the United States is 15th. So what?

“At the turn of the century,” wrote the Free Press earlier this year, “broadband was present in about 2 percent of American homes. Today, that figure stands at nearly 60 percent. No other technology even comes close to competing with this pace of adoption—not the telephone, television, the automobile, cable TV, cellphone, or even the computer itself.” If America’s rip-roaring pace of adoption trails the broadband explosions elsewhere, should we be worried? Just how bad is 15th place?

crisis

We did some digging, and if we are in a ranking crisis, it’s even broader than we feared. The US ranks 12th in the world in per capita pork consumption, behind such unlikely competitors as Spain, Sweden, and Canada. We’re 12th and 13th in coffee and beer drinking, trailing Northern Europe by embarrassing margins. Once famed among the comelier peoples of the world, America now sits at a homely 19th place in plastic surgeries, out-beautified by Slovenia and Greece. Somewhat more to the point, the US is 72nd in the world in mobile phones per capita. Seventy-second! To underscore just how useless that ranking is, note that Japan comes in just behind us at 73rd. Even if we do have fewer phones than our friends—and though that ranking overstates the difference, we do—it’s just not that big a deal.

Even if these rankings were meaningful by themselves, we can’t expect to win them all. We’re still at the top of the world by large margins in radio, television, and automobile ownership. We’re 4th in personal computers and 2nd in fax machines. The only people who go to more movies than we do are the Icelanders. Maybe that’s why we’ve been slow to roll out the broadband. And of course, “slow” here means just ahead of Japan. Again.

On June 17, the Internet Innovation Alliance held a conference on the future of broadband in America. Several speakers touted the heavenly virtues of bandwidth and advocated subsidizing the broadband industry. West Virginia Governor Joe Manchin had to remind the attendees that money must go not merely to any good use but only to its best possible use, that there are areas of the US without so much as clean running water, and that our Little Leap Forward will come at the expense of prosperity in other sectors. It wouldn’t be the first time.

* Rankings not cited inline are from NationMaster. We haven’t verified their correctness, but that’s beside the point.