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Norquist raps FCC on knuckles for pulling a John Kerry

Grover Norquist co-authored a piece criticizing the FCC’s foot-dragging on the issue of spectrum access. As a case study, Mr. Norquist refers to the challenges LightSquared is facing from other agencies while the FCC apparently is looking the other way. According to Mr. Norquist, the FCC is pulling a John Kerry double take: I was for LightSquared building a $14 billion 4G network before I was against LightSquared building a $14 billion network.

I did appreciate Mr. Norquist’s take on the FCC’s push for rules that would basically allow the agency to choose to whom spectrum will go and to decide who gets to bid on it in the first place. What the FCC is signaling is not competitive bidding. The FCC should not be picking winners and losers. The Japanese did something similar in the 1990s; picking the industries they felt should survive.

Have you heard of the Lost Decade? This type of economic strategy didn’t help Japan pull out of its economic and financial doldrums. Why should we expect picking favorites to work here in the U.S.?

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Time to abandon our history of making the wrong technology popular

Last September, I attended the annual National Association of Black Owned Broadcasters (NABOB) conference in Washington, DC. The keynote speaker at the luncheon was Neil Golden, senior vice-president and chief marketing officer for McDonald’s USA. During his speech, he shared an important observation. McDonald’s had determined in its marketing research that minority consumers enjoyed games of chance while white consumers enjoyed games of strategy. Mr. Golden’s point in sharing this information was to explain the success of some of its urban promotions including its popular scratch off games.

I think this view can be applied, to a very limited extent, to how we as minorities view the use of technology. From computers to cell phones, to high speed connections, these technologies were introduced to make work more efficient and profitable. Their entertainment value would come later as they were offered to the masses. While I wouldn’t describe technology’s use by the mass consumer market as chance, the early use was strategic.

I’m also suspect of a recent description of minorities as the demographic that makes technology popular. This was the premise of a recent article in NewsOne by Johan Thomas. Mr. Thomas set out to describe why blacks make technology popular. His rationale was that we adopted technology such as pagers as social tools, turning them into fashion accessories, and experimented with them while innovating their use and looks.

I believe that we popularize new technology that is affordable; I’d dare say technology that supports cheap entertainment. We won’t take a chance on broadband because, while it can be used to deliver entertainment, that delivery system is far from cheap. Yet we see all around us the application of broadband technology to productive use.

Just look at your online media companies in which I would include Facebook and Google. Look at how other going concerns use broadband for research and transmitting data. We have to ask ourselves are we taking a chance missing out on profit and employment by not being strategic in how we get broadband into more hands and how we become more effective with it.

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Do we need more onerous restrictions on free market exit?

Phillip Humm laid out his argument for court approval of the AT&T/T-Mobile USA transaction in a short piece in the Seattle Times. He made the arguments about customer service quality improvements and the efficient acquisition of spectrum that the transaction would provide. These arguments weren’t necessarily the highlights, however.

What struck me as important was that an independent going concern such as T-Mobile has to go through all these hoops in order to maximize shareholder wealth. T-Mobile’s parent, Deutsche Telekom, made an independent decision to sell its American subsidiary to an American company.

Deutsche has determined that it is time to pull up stakes in the U.S. due to financial and competitive reasons in Europe. One only has to listen to the business news to see what may be at the heart of Deutsche’s financial and competitive concerns. The company has made a rational decision to pursue a time honored method of exiting the U.S. market, a sale. Yet, policymakers appear to be saying, please don’t go.

Is this the appropriate institutional response to the decision made by a market participant? What returns accrue to Deutsche’s shareholders from policymakers telling the company that the government cannot accept conditions of a sale that were negotiated between two autonomous and independent market participants?

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The FCC, economy, and the public interest

Posted August 23rd, 2011 in economy and tagged , , by Alton Drew

CNET.com’s Roger Cheng obviously understands not only mobile technology, but the ripples that should be expected in a changing marketplace.

In his piece, Mr. Cheng cited a study by Deloitte which finds that 4G network deployment through the year 2016 could add from 371,000 to 771,000 jobs. Just as important would be an added $73 billion to $151 billion to the nation’s gross domestic product.

On the surface, investors should be pleased with that report. In addition, job creation, the number one issue among Americans, would get a needed boost.

Merger reviews can turn into barriers to market entry if they do not take into account pro-growth policy and outcomes, and investor interests. With AT&T planning to purchase T-Mobile from Deutsche Telekom, 9.1% national unemployment, and 16% unemployment among African Americans in particular, this analysis should be considered in the FCC’s public interest analysis.

Is poor economy justification for FCC, DOJ to deny AT&T/T-Mobile merger?

An article in The Wall Street Journal discussed how the stock value declines for second tier carriers like MetroPCS may have an impact on AT&T, given that a poor economy may lead to more concentration in the industry. The greater the concentration, the less likely AT&T’s proposal to merge with T-Mobile USA would pass muter.

Too easy to take for granted that even with the technology sectors good performance in the market, particularly through the downgrade of American debt crisis, that the economy will have an impact on the wireless industry. Should the FCC and DOJ get in the business of guaranteeing a wireless carrier survive even though its financial fundamentals say otherwise?