Yesterday the Brookings Institution hosted a forum on broadband. What stood out to me was a discussion by the panelists on the role the Federal Communications Commission should play in the evolving broadband industry. One role mentioned was that of consumer protection.

I don’t have a problem with the FCC being a clearing house of information. Consumers tend to make mistakes when they are not armed with information about the carriers they are negotiating with for service. The FCC can be a resource for information on service quality and pricing. Any consumer services beyond that would be a waste of resources.

There are a number of state consumer agencies that can address consumer complaints about communications services. Also, state courts can address contractual disputes between communications companies and consumers. There is no need for the FCC to go granular on consumer protection.

The FCC should devote its resources to the role it plays in regulating commerce. As guardian of spectrum, the FCC’s primary mission should be to ensure that spectrum gets into the hands of firms that can put it to best use. This does not include trying to ensure every little company gets to sit at the table. It also does not mean redistributing rents (profits) to company A from company B because some grass roots groups believe that company B should divest itself of some of its holdings in order to expand into new markets.

The FCC typically pursues divestiture during its review of mergers, but has yet to show how forcing a company to give up market share has done anything to increase consumer welfare. I agree with the panelists to the extent that the FCC has never made a strong qualitative or quantitative argument showing the benefits to consumers of divestiture. Merger reviews should be left exclusively to the United States Department of Justice.

While I have abandoned the theory of market failure as a reason for government intervention into what should be free markets, I can’t see how the FCC can claim it’s protecting consumers without demonstrating how consumer value is being increased by its actions. The FCC should not be attempting to create competitive markets using a merger review process that has not demonstrated any value to either broadband firms, shareholders, consumers, or the process for distributing spectrum.

The Internet is blowing up not only with news of the sale of Apple’s iPhone 5, but also with the speculation that Sprint may be considering a little mischief in the mergers and acquisitions arena. One commentary on Seeking Alpha reports that Sprint CEO Dan Hesse may be considering buying a smaller carrier after the build-out of the company’s 4G LTE network.

Who might be the potential buys? They may include MetroPCS, Leap Wireless, or U.S. Cellular. Of course this is all speculation, but should Sprint make a move to purchase one of these carriers, I would hope that the Federal Communications Commission and the United States Department of Justice would have the good economic sense to let this merger go through.

First, such a move would satisfy the FCC’s alleged preference for competition and the benefits it brings to the consumer. An enlarged Sprint could reach more consumers and with the increased economies of scale, they would be able to serve those consumers at lower costs than with its current network.

Second, with a company like Leap Wireless in its portfolio, Sprint can not only continue providing unlimited data plans to consumers, but has another brand that can extend wireless broadband services into lower income markets. These would mean more consumers adopting wireless broadband and enjoying its benefits of connectivity.

Third, the FCC need not worry about a duopoly remaining in the wireless market after the transaction is completed. Sprint may end up a stronger third alternative to AT&T and Verizon.

But hey; what about T-Mobile? T-Mobile may be out of play simply because T-Mobile runs on a GSM network while Sprint CDMA network. Why incur the additional expense converting T-Mobile over to Sprint’s network when U.S. Cellular, MetroPCS, and Leap Wireless run on CDMA.

Finally, there is no reason for government interference in the making of a market in such an instance. Wireless carriers have naturally been expressing demand for spectrum especially since the introduction of the iPhone In 2007 began the onslaught on spectrum we see today.

Oh well, we’ll stay tuned.

If it wasn’t so serious, I would send a replica of the Mayan clock to all members of the Federal Communications Commission so that they are reminded of the gravity of the spectrum crunch. Maybe hearing or seeing a countdown will put the commissioners in a more urgent frame of mind.

It reminds me of the summer of 2007. Anxiety in the credit markets about the inability of borrowers to pay back sub-prime loans and the increased risk to investors that the portfolio of mortgage-backed securities either they or the companies they invested in was being threatened by default sent signals to the Federal Reserve that some type of action needed to be taken. Its chairman, Ben S. Bernanke took cues from the history of the Great Depression and determined that action, not delay, was the call of the day.

FCC chairman Genachowski doesn’t have precedent to work with. The introduction of the iPhone in that very weekend in 2007 helped spark such a demand for apps and spectrum that wireless carriers and the FCC were caught off guard. AT&T has seen demand for data increase 8,000%. The industry expects to run out of spectrum by 2015, yet, as Andrew Seybold concisely and eloquently pointed out, delay seems to be an option the FCC prefers pursue.

Delay is putting it mildly. Aiding and abetting a DOJ take down of the proposed license transfer from T-Mobile to AT&T sent signals to the industry that other measures, mostly detrimental to consumer welfare, would have to be taken. When you limit the supply of a resource, the price on the end product is likely to increase.

Bernanke’s actions, while not flawless, helped introduce stability into the financial markets. Ironically, both the financial industry and wireless industry saw their milestones occur the very same weekend. Unfortunately, the paths for decision making have diverged in totally opposite directions.

So let me get this straight. The Democratic Party wants telecommunications companies to build out infrastructure where there is no business case to do so. This appears to be the position of a bunch of congressional Democrats as I read it in an article posted today in The Hillicon Valley. The Democrats are arguing that Verizon’s deal to buy spectrum from SpectrumCo and cross sell cable services provided by SpectrumCo’s partners (Comcast, Time Warner, & Bright House Networks) somehow constitutes anticompetitive behavior.

I’m all for broadband adoption, but it should be driven primarily by the market. Verizon’s deal is driven by its need to get spectrum quickly, both for short term and long term reasons. With left leaning advocacy groups trying to make a bogus antitrust case against Verizon, there may be no free market alternatives left for wireless carriers to acquire spectrum.

In addition, there has been no demonstration how this deal would curtail competition. Cross selling occurs in the communications and other industries. How does Verizon selling Comcast services stop AT&T from selling DirecTV or long distance telephone services? Is Verizon going to stop deploying facilities where consumers need them because they are selling The Vampire Diaries on Time Warner? Give us a break.

Before any congressman considers any action against any industry, they should first ask themselves, how does my reaction promote commerce? If it doesn’t, then they should back off.

During a Senate antitrust review Wednesday, Senate antitrust committee chairman Herb Kohl (D-WI) said the following: “Having won the battle for competition by blocking last year’s AT&T/T-Mobile merger, are we now in danger of losing the war?” Mr. Kohl asked.

That’s the problem, Senator Kohl. Had you, your congressional colleagues, the FCC, and DOJ not looked at the AT&T/T-Mobile deal from the standpoint as a war against “the big companies”, you wouldn’t have AT&T and Verizon buying spectrum from cable. We should be mindful of the corners we back industry into with poor public policy.