Principles in Practice: The Blog of the Objective Standard

Thursday, August 09, 2007

'Open-Access' vs. Freedom in the Wireless Industry

Posted by ARI Media at 3:05 PM

Irvine, CA—As the FCC prepares to auction off valuable wireless spectrum, potential bidders, including Google, are demanding that the agency impose strict requirements on how any purchased spectrum be used. Google, for example, is demanding so-called open access provisions, which would force any spectrum owner to make his bandwidth available to any device or software application, and force him to resell portions of his bandwidth on a wholesale basis.

"These demands by Google and others, some of which have recently been granted by the FCC, constitute a complete power grab and are completely antithetical to freedom in the wireless industry," said Alex Epstein, junior fellow at the Ayn Rand Institute.

"Under a free market approach, the business that is willing to pay the most for spectrum should be free to employ whatever business model it chooses—and succeed or fail accordingly. If Google is confident that its preferred "open access," "dumb pipe" business model would be most appealing to potential customers, then it is welcome to outbid the competition and try to make money from it. But neither Google nor the FCC has any legitimate right to dictate to other companies, who have invested billions upon billions in wireless infrastructure and may favor other business models, how they may use their purchased spectrum.

"Unfortunately, dictating the practices of cell phone companies, radio stations, and television stations, and others is the MO of the FCC—which has the power to coerce media producers in the "public interest." Since there is no such entity as "the public," what this means in practice is that the interests and freedom of some producers (like Verizon) are sacrificed for the sake of others (like Google).

"It is time to replace the FCC's wireless regime of pressure group warfare and dictator-regulators with a truly free wireless market, in which any company is free to offer any type of product package it chooses."

Labels: Business and Economics, Individual Rights and Law