The day before Halloween was slated for a long-awaited "Technology Policy Smackdown" between the McCain and Obama camps. The event was hosted by the New America Foundation in recognition of the fact that although connectivity and technology are a pervasive part of our economy, these issues had been generally overlooked in the (seemingly endless) 2008 presidential campaign. Like many other Washington policy wonks, I headed over to NAF to see it for myself (and partake of the very tasty "free lunch" provided). Unfortunately, as has been widely noted, Douglas Holz-Eakin, Chief Economic Advisor to the McCain campaign had to cancel at the last minute and the campaign was unable to provide a substitute. An early Halloween trick? The absence of a McCain representative turned the putative debate into a forum for one of Senator Obama's technology policy advisers, former FCC Chairman Reed Hundt, to present an uninterrupted picture of how technology policy might proceed under an Obama administration. There were many unexpected treats.

My once and present boss Ken Ferree recently remarked of the FCC:

Although it is true that a foolish consistency is the hobgoblin of simple minds, a foolish inconsistency is worse. The FCC is guilty of the latter.

The subjects Ferree addressed were twofold. First, the inconsistency between the FCC's recent decision to intervene on the side of the programmer, NFL Network, in its program carriage dispute with cable operator Comcast Corporation and the agency's calls for the industry to adopt an "a la carte" pricing model to ensure that consumers only receive programming channels they affirmatively choose to receive from their multi-channel video programming distributor. And second, the FCC's purchase of labeling rights - ostensibly a form of "embedded advertising" - on a NASCAR racing car at the same time it is contemplating imposing limits on the ability of commercial advertisers to do likewise.

In response to Comcast's recent announcement regarding its new traffic management technique, which involves limited capping to prevent excessive bandwidth use, Verizon has countered that it does not employ bandwidth caps. Now I have no view as to whether Comcast's prior traffic management "throttling" or the newer "capping" (for lack of better shorthand terms) provides superior service from a consumer perspective. And I don't know what precise traffic management protocols Verizon uses or how those protocols will evolve over time as applications become more sophisticated and more bandwith intensive.

It is clear, however, that the cable and telecommunications companies are engaged in ferocious competition to gain market share in the broadband market. Both industries are rapidly working to upgrade and improve their networks, both are trying to differentiate their service offerings to the public, both are striving to improve service quality and enhance the consumer experience. Most importantly from a policy perspective is that the billions of dollars invested in this effort has not resulted from government mandates or intrusive regulation, but from vibrant marketplace competition. Want more and better broadband in the U.S.? The best thing the government can do is stay out of the way and allow competition to flourish.

Writing at Slate, Tim Wu tries to make Obama out to be the real Big Government candidate on media policy, who will deliver "if not a chicken in every pot, a fiber-optic cable in every home." By contrast, Wu implies that McCain is just another pro-big business lackey who doesn't understand "that the media and information industries are special--that like the transportation, energy, or financial industries, they are deeply entwined with the public interest." Wu goes on to say:

Ultimately, most of the difference in Obama's and McCain's media policies boils down to questions about whether the media is special and a dispute over how much to trust the private sector. Camp McCain would tend to leave the private sector alone, with faith that it will deliver to most Americans what they want and deserve. The Obama camp would probably administer a more frequent kick in the pants, in the belief that good behavior just isn't always natural.

First, as a factual matter, Wu is just wrong about McCain being some sort of a radical hands-off, pro-market liberalizer on media policy issues. Oh, if only that were true! But for those of us who have been in DC covering telecom and media policy for many years, it is widely understood there is no nailing down John McCain on any tech, telecom or media policy issue. He's been all over the board. While he has sponsored or supported some deregulatory initiatives on the telecom front in the past, he's also been a supporter of other regulatory causes. His battles with broadcasters and cable, for example, are well-known. Most recently, McCain has been leading the effort to impose a la carte mandates on cable and satellite operators.

So, if Tim Wu's thesis is correct that the broadband marketplace is "a cartel," should we be reading headlines in today's Wall Street Journal and CNET News.com like this: "Price War Erupts For High-Speed Internet Service" and "Broadband Price War Brews"? From the WSJ story:

The battle between cable and phone companies to sign up new customers for high-speed Internet service is heating up, creating fresh opportunities for consumers to cut their bills. [...] While the most generous offers are coming from the phone companies, some analysts expect cable companies will also become more aggressive in their own promotions as they compete to retain customers.

Geez, if that's a cartel, give me more of them!

Very useful chart over on the Verizon policy blog put together by Link Hoewing and Larry Plumb. Link uses it illustrate the changes we have seen over the past three decades in terms of Internet access platforms and speeds. It's too small to read here, so make sure to go there to see it more clearly and also see Link's interesting discussion.

Global handset manufacturing giant Nokia has purchased the shares they didn't already own in Symbian, Ltd., the company formed in 1998 as a partnership among Ericsson, Nokia, Motorola and Psion and the developer of the Symbian mobile operating system, by far the world's leading OS for "smart mobile" phones with 67% of the market, followed by Microsoft on 13%, with RIM on 10% (source).

But wait, there's more (per Engadget)!

Here's where it gets interesting, though: rather than taking Symbian's intellectual private for Nokia's own benefit, the goods will be turned over to the Symbian Foundation, a nonprofit whose sole goal will be the advancement of the Symbian platform in its many flavors. Motorola and Sony Ericsson have signed up to contribute UIQ assets, while NTT DoCoMo (which uses Symbian-based wares in a number of its phones) will be donating code as well.

Other Symbian Foundation members include Texas Instruments, Vodafone, Samsung, LG, and AT&T (yep, the same AT&T that currently sells precisely one Symbian-based phone), so things could get interesting. The move clearly seems to be a preemptive strike against Google's Open Handset Alliance, LiMo, and other collaborative efforts forming around the globe with the goal of standardizing smartphone operating systems; the writing was on the wall, and Symbian didn't want to miss the train. Total cash outlay for the move will run Nokia roughly €264 million -- about $410 million in yankee currency.

The fact that we will soon see three open source platforms (counting Google's Android and LiMo) competing for market share provides yet another measure of the exceptionally high degree of competition in the wireless industry.

One should avoid clichés like the plague. But there is little in ecclesiastical wisdom that can match the old saw about there being no such thing as a free lunch. Goods and services come at a price. If a consumer wants to impress her friends with her high-end mobile phone, she had better be willing to part with cash sufficient to compensate the maker of that phone. A football fan with dreams of sampling all of the different games available each Sunday on DIRECTV should not be surprised to find that a good deal of equipment must be installed before he will ever see the first kickoff – equipment that DIRECT does not provide gratia placenti. Consumers must pay for what they would consume.

This simple truth appears to have been lost on a few “consumer advocates” who object to the imposition of early termination fees, or “ETFs,” when consumers cancel service contracts without having fulfilled the terms of their bargain. For, in fact, the use of service contracts and associated ETFs is merely a mechanism for spreading costs over an extended period rather than requiring consumers to bear them in the form of a one-time fee.

To extend the examples above, smartphone and DBS service both require consumers to have fairly sophisticated end-user equipment. If one were simply to purchase a high-end mobile device, the retail price would run into the several hundreds of dollars. Similarly, the need for a parabolic antenna, set-top box, and the labor for installation required to receive DBS service suggest a substantial upfront consumer investment before any actual service can be received.

Service contracts and ETFs provide an alternative. A smartphone that may have cost our hypothetical consumer $500 had she purchased it as a stand-alone device might be provided for only a few dollars in conjunction with a one-year commitment to a particular carrier’s service – allowing the carrier to recover the full cost of that smartphone over the period of the contract. Rather than pay DIRECTV an initial equipment and installation charge of several hundred dollars, our football fan can instead amortize those costs over a year or more in conjunction with a service contract. Naturally, however, to the extent a consumer wants to opt out of any such contract, he or she should reasonably expect the affected service provider to demand recompense for the upfront investment necessary to provide service.

The National Center for Health Statistics, part of the Center for Disease Control, recently released some new data on wireless substitution collected from a survey conducted in the second half of last year. The report notes that:

Preliminary results from the July-December 2007 National Health Interview Survey (NHIS) indicate that nearly one out of every six American homes (15.8%) had only wireless telephones during the second half of 2007. In addition, more than one out of every eight American homes (13.1%) received all or almost all calls on wireless telephones despite having a landline telephone in the home.

I found it interesting how the report broke out that latter group of "wireless-mostly households" since that's the group I'm in. My wife and I keep a landline (1) for emergency purposes, and (2) as the equivalent of a spam line that we can give out to people who demand a phone number but who we never want to talk to again! Anyway, I think these numbers make it clear that, in a few years time, the majority of Americans are likely to be wireless-only or wireless-mostly homes and wireline systems will grow less and less important.

Update: Jason Fry of the Wall Street Journal explores what these numbers mean in his entertaining column today, "The Landline That Refused to Leave." And his colleague Carl Bialik, who pens the always-brilliant "Numbers Guy" column for the Journal also sounded off on this.

Barbara Esbin and I have just released a short PFF essay asking the question: "Where is the FCC's Annual Video Competition Report?" The FCC is required to produce this report annually and yet the last one is well over a year past due and the data is contains will be over two years old by the time it comes out. I've embedded our paper about this below.