Winning the Silicon Sweepstakes: Can the United States Compete in Global Telecommunications?

Rob Frieden, Pioneers Chair and Professor of Telecommunications and LawPenn State University

email: rmf5@psu.edu; web site: http://www.personal.psu.edu/faculty/r/m/rmf5blog site: http://telefrieden.blogspot.com/

A Presentation to Graduate Students of the

Penn State College of Communications

September, 2010

Main Points of the BookMain Points of the Book

The information, communications and entertainment (“ICE”) industry The information, communications and entertainment (“ICE”) industry represents about 10% of the national economy. With growth incumbent represents about 10% of the national economy. With growth incumbent stakeholders have increased tactics to maintain market share, repel stakeholders have increased tactics to maintain market share, repel competition and “capture” or thwart regulators. competition and “capture” or thwart regulators.

Sponsored researchers misrepresent advocacy as empirical evidence.Sponsored researchers misrepresent advocacy as empirical evidence.

The FCC frequently engages in results-driven decision making that The FCC frequently engages in results-driven decision making that overstates the level of competition and consumer welfare. overstates the level of competition and consumer welfare.

Growing numbers of “astro-turf” organizations falsely claim to represent Growing numbers of “astro-turf” organizations falsely claim to represent the public.the public.

The U.S. is losing its competitive advantage in some ICE sectors, because The U.S. is losing its competitive advantage in some ICE sectors, because of a “morass or partisanship, pseudo science, fuzzy math, creative of a “morass or partisanship, pseudo science, fuzzy math, creative interpretation of economic principles and legal concepts, selective interpretation of economic principles and legal concepts, selective interpretation of the facts, innovative collection of statistics, and flawed interpretation of the facts, innovative collection of statistics, and flawed thinking.”thinking.”

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Main Points of the Book (cont.)Main Points of the Book (cont.)

The book poses the following questions:The book poses the following questions:

How can the United States demonstrate global best practices in some How can the United States demonstrate global best practices in some information and communications technology markets, such as software and information and communications technology markets, such as software and computing, but woefully lag in others, such as in wireless and broadband computing, but woefully lag in others, such as in wireless and broadband services?services?

If the information revolution was supposed to “change everything” how did If the information revolution was supposed to “change everything” how did over over $1 trillion in investment largely evaporate in three years ?$1 trillion in investment largely evaporate in three years ?

How can incumbent telephone companies successfully argue the need for How can incumbent telephone companies successfully argue the need for governments to create incentives for investment in next generation networks governments to create incentives for investment in next generation networks while at the same time claiming the existence of robust competition eliminates while at the same time claiming the existence of robust competition eliminates the need for any other sort of government involvement?the need for any other sort of government involvement?

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Main Points of the Book (cont.)Main Points of the Book (cont.)

Why have nations failed to bridge the Digital Divide despite having created Why have nations failed to bridge the Digital Divide despite having created subsidy mechanisms that invest billions annually in never achieved solutions? subsidy mechanisms that invest billions annually in never achieved solutions?

If the ICE marketplace has become so robustly competitive, where are the If the ICE marketplace has become so robustly competitive, where are the

usual consumer benefits of lower prices, diverse choices, and responsive usual consumer benefits of lower prices, diverse choices, and responsive customer service?customer service?

Why does it appear that incumbent ventures can belatedly embrace new Why does it appear that incumbent ventures can belatedly embrace new technologies yet eventually extend their market power by acquiring or technologies yet eventually extend their market power by acquiring or extinguishing most competitive threats through mergers and acquisitions?extinguishing most competitive threats through mergers and acquisitions?

Why have nations, including the United States, lost their comparative and Why have nations, including the United States, lost their comparative and competitive advantage in ICE products and services? Andcompetitive advantage in ICE products and services? And

Why does it appear that the next generation Internet will become less open, Why does it appear that the next generation Internet will become less open, neutral and accessible possibly tipping the competitive playing field in favor of neutral and accessible possibly tipping the competitive playing field in favor of “walled gardens” of content and services offered by incumbents keen on “walled gardens” of content and services offered by incumbents keen on disadvantaging newcomers offering the “next best thing”? disadvantaging newcomers offering the “next best thing”? 4

The Book in the Context of Graduate Media StudiesThe Book in the Context of Graduate Media Studies

Winning the Silicon SweepstakesWinning the Silicon Sweepstakes examines the political examines the political economy of communications/information policy. Such economy of communications/information policy. Such qualitative work offers prescriptive remedies.qualitative work offers prescriptive remedies.

Policy analysis integrates many academic disciplines Policy analysis integrates many academic disciplines including law, economics, business, accounting, engineering including law, economics, business, accounting, engineering and political science. Accept (or at least tolerate) such and political science. Accept (or at least tolerate) such interdisciplinarity.interdisciplinarity.

Policy analysis also requires digital literacy: the ability not Policy analysis also requires digital literacy: the ability not only to use ICE technologies, but to understand how they only to use ICE technologies, but to understand how they work and what impact they have on society.work and what impact they have on society.

Policy analysts also may seek to influence outcomes. One Policy analysts also may seek to influence outcomes. One should disclose any financial support for prescriptive, should disclose any financial support for prescriptive, advocacy documents.advocacy documents.

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