UPDATE: On reflection, I’ve decided to modify the tone of this considerably. After all, when someone basically agrees with you (the incumbents have too much market power), slapping them around for relying on the press is a pretty stupid and counterproductive move. Besides, my real frustration is with the press for offering up speculation as if it were fact, not Pryor for reading the press and getting upset about the supposed failure of the auction to produce a new competitor. So with apologies to Pryor for needless snark the first time around, here we go again.
Senator Mark Pryor (D-Ark) is upset with reports that AT&T or Verizon probably won C Block. More specifically, he is angry that we don’t have more wireless competition. That’s good. But he accusses Kevin Martin of fixing the 700 MHz auction to benefit the telcos. That’s where he goes wrong, in my opinion. As I’ve said before, I don’t think Martin rigged this for the telcos, especially in light of Verizon’s persistent efforts to get the C Block conditions “clarified” away and Martin’s telling them to go take a hike. Further, adoption of the anonymous bidding rules means that we don’t know yet who won the licenses. We may very well be surprised when we see the results.
But if it turns out that, as predicted, the incumbents did win the lion’s share of the licenses, that doesn’t make the outcome Martin’s fault. Rather, Senator Pryor should direct his anger where it belongs — at the statutory requirement for the FCC to auction licenses for use of the public airwaves. As I explain below, and as many of us explained before the auction, incumbents enjoy real advantages even under the best of conditions because they don’t have additional costs new entrants have — like building the network from scratch or pulling customers away from a service they already use. To make matters worse, Senator Pryor’s Republican colleagues are constantly haranguing the FCC to “not pick winners” and objecting to any kind of mechanism that could neutralize these incumbent advantages.
We can’t have it both ways, and Congress makes the call. Either Congress eliminates auctions, or allows the FCC to exclude incumbents from the auction, or gives up on auctions as a way of generating competition and goes back to regulating market power directly. But blaming Kevin Martin and the FCC for the fact that incumbents keep winning auctions makes as much sense as blaming Bud Selig for the fact that the Yankees and the Red Sox always make the playoffs and the Nationals haven’t gotten to the World Series.
More below . . . .


Tales of the Sausage Factory
For the Clueless Among Us: Why Comcast Paying Folks to Attend FCC Hearing Is Wrong.
I can’t believe I actually need to explain this.
Suppose Comcast made the following offer: If you vote “yes” on a ballot initiative we like (and agree to take a pocket recording device into the voting booth with you so we can have proof), we will pay you $50.
Most of us would not only say that this is wrong, we would have no problem understanding why that’s a crime. We would not be persuaded by Comcast defending itself by saying “well, Free Press and other organizations have campaigned in support of the bill and are calling people to ask them to go out and vote — they even provide free rides to people likely to vote for the initiative. That’s just like paying people directly to vote the way we want.” In general, we recognize a difference between organizing ad trying to persuade people to vote the way you want and actually paying people for their vote (and wanting a receipt).
Which brings us to Comcast’s exercise in seat packing at Monday’s FCC Hearing in Boston.
More below . . . .
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