Special access lines are typically used to connect a customer directly to a long distance provider, avoiding a central office or other portions of the public telephone network. They can also be used to connect various customer locations.

The Democrats aim is to allegedly increase innovation and investment for special access customers. If the Democrats want to increase innovation and investment, they should encourage these customers to generate products, services, and content that stimulates consumer demand for them.

This surprisingly supply-side approach by Democrats won’t work. Special access rates have historically been set higher than other access line rates because of their non-shared nature. It’s just the economics of the network.

Business plans change, FCC. It sounds like Verizon has weighed the cost of having the terms reduced on their 700 MHz band holdings post sale vs. holding the frequencies and not providing additional services. If they can provide better quality service in the AWS band (both bands support 3G and 4G services, then so what?

Verizon has until 22 May 2012 to respond to the FCC’s query.

Public Knowledge believes that the FCC should not apply confidential treatment to information about the companies’ governance structure under their joint agreement. Public Knowledge argues that the information does not consist of trade secrets or any other information that if released would harm either of the companies’ competitive positions.

My take is, how does removing confidential treatment help the FCC make a better decision about the optimal use of a natural resource. Public Knowledge argues that keeping the information confidential may stifle innovation, and stifling innovation threatens of the public interest. Public Knowledge is probably taking some comfort in hiding behind a concept, the public interest, that has successfully avoid a concrete definition for decades if not the past couple centuries.

This comfort is more apparent when you consider that Public Knowledge, the group bringing the assertion, brings no quantitative analysis to justify its position. How do we know that keeping a joint operations agreement confidential will drive up costs for consumers? Will making its details public increase the likelihood of broadband adoption?

So quick is Public Knowledge to cite the Freedom of Information Act, it feels like they are simply happy to forego the consumer welfare analysis good public policy requires. First address quantitatively or qualitatively the consume harm. Then move to analyzing any barriers to market entry failure to act may cause or help maintain. Jumping to a FOIA analysis, though acceptable by jurisprudential warriors, only tells me that Public Knowledge is more interested in being overly nosey.

I guess I can see the FCC’s dilemma. Cut DISH a waiver now, and the FCC would have to justify why other satellite company’s and wireless carriers couldn’t get the same exception. The rule would be gutted before it was even released in final form.

On the other hand, wait until a final rule is issued and add to the delay in getting spectrum into the hands of wireless carriers who need it in order to meet well documented consumer demand.

Hate to say it, but I have to side with the FCC on this one. Cutting DISH a waive now will only create regulatory gridlock down the road.

If the deal is approved, the two companies would be able to acquire spectrum from each other and have at least 42.8 million customers.

Will the Federal Communications Commission play spoiler? I don’t think so. This transaction gives the FCC an out for two reasons. First, approving the transaction will show that the FCC is willing to allow the market and not Don Quixote politics to allocate spectrum. Second, it takes the FCC off the hook for putting the number four wireless carrier in a position where it was considering saying auf wiedersehen to the American market.

Again, Sprint may be left without a date to the dance.

Not only do the Don Quixote groups not advocate for the underserved, they advocate for an allocation system based on inefficiency. The FCC is allowing itself to be persuaded by a decision matrix not based on hearings. I get tired of notices of rulemaking that come out of nowhere; with just one more step to go before showing up as a final rule. Sure the FCC allows the public to comment, but public comment does not bring the rigorous economic and policy analysis necessary for determining the efficacy and feasibility of proposed rules or other actions that impact how spectrum will be allocated.

Instead the FCC relies on a behind the door, ex-parte approach of arm twisting and brow beating to help guide its policy meetings. They may as well make their decisions at some alumni picnic. The FCC-Free Press-Public Knowledge Triumverate doesn’t seek optimality. It doesn’t care about getting the most out of the use of spectrum. It’s focused too much on keeping the reins on all participants in the wireless broadband sector.

That was private investment. No government subsidies were being provided. No universal service. Ironically the impediment to broadband deployment was onerous franchise agreements that AT&T and Verizon, new to the cable franchise game, had to face. They could have slowed down or worse yet yanked their deployment plans off the board. Instead they marched ahead with the intent of meeting consumer demand, again without subsidies.

Second, there is the issue of flow of capital. Mr. Simmons’ piece is a reminder that as regulator of commerce, the federal government should be willing to avoid applying unnecessary regulations that would discourage investment in the private sector in general and the broadband sector in particular. I saw a number of cable firms that may have ended up providing competitive broadband services had not entry fees and other franchise requirements kept them out of certain markets.

These requirements didn’t even have anything to do with consumer protection, but more so with localities extracting onerous obligations such as cable TV studios and I-Nets; items that municipalities should have funded from their own general funds. Now these same municipalities complain about a lack of competition in their local franchise areas. Go figure.

Mr. Hassett referred to the Federal Communications Commission’s finding that transferring licenses from T-Mobile was not in the public interest and that such a transfer would have a negative impact on competition. What Mr. Hassett points out is that decisions like the one by the FCC would have a negative impact on the nation’s growth. He wanted us to envision the collective negative impact these types of decisions would have on an industry that accounts for one-sixth of the economy.

Private investment, such as the investment that would have been initiated by the merger, is at the base of any economic recovery. As much as we may talk about government making investments, it was private investment that drove growth during six years of the Clinton Administration and five years of the Bush II Administration.

On the issue of competition, the FCC’s decision to deny the license transfers was based in part on giving smaller carriers the opportunity to either enter or, in the case of Sprint, stay in the market. Smaller, regional carriers don’t have the economies of scale or other capital necessary to provide the same level of national output of wireless services, even with access to additional spectrum. Just ask T-Mobile.

If smaller carriers are not increasing their services, and AT&T and Verizon are not allowed to increase their services due to a lack of spectrum, these carriers will raise their rates in order to regulate the increase in consumer demand for wireless services. Reduced output and increased prices are characteristics of a monopoly, the very scenario the FCC allegedly wanted to avoid. Consumers get shafted on both ends.

This is the irony of over regulation. Not only is capital investment impeded, but the regulatory agency creates a non-competitive market.

“Pro-Internet policy successes came when government removed barriers, rather than adding new ones,” said IIA Co-Chairman Bruce Mehlman. “Unfortunately those days may be ending. While there is rare bipartisan agreement that the biggest challenge to broadband-enabled growth is lack of private investment and available spectrum, there is growing disagreement on how to fix it.”

I remember 1992 vividly (which means I’m getting old if I can remember anything from 20 years ago vividly). Local telephone companies were facing competition, serious competition, for the first time. There were up to 400 long distance companies in Florida, though most were resellers. Cable companies, who were providing ILEC by-pass services, were testing technology that would allow them to challenge the local phone companies. Regulators were asking BellSouth what the hold-up was in introducing …hold your breath … here it comes …ISDN! The calls for deregulation were growing. Everyone wanted to see truly robust, innovative, and fierce competition in the telecom and advanced services markets.

Yes, there was a time that regulators backed off, and that tactic worked. You didn’t have grass roots organizations hankering to know every minute detail of how a cable company, ALEC, or ILEC ran its business. They were truly consumer oriented, concerned not only about rates, but about the delivery of services to the underserved. Even they wanted to bet on innovation delivering services.

Not today, as Mr. Mehlman correctly surmises. Today with have innovation-hindering net neutrality rules. We have grass roots organizations like Public Knowledge and Free Press actually criticizing minority groups for supporting efficiency of service delivery. These groups have prodded and cajoled the current FCC into an apparent preference for a command and control regulatory scheme. While the FCC talks “robustness” and “innovation”, its actions, supported by grass roots groups that put its consumer ancestors to shame, speak another narrative; a narrative that says that markets are inherently no good.

Bubba and 1992. Along with my slimmer figure, we miss you.