Winning the Silicon Sweepstakes: Can the United States Compete in Global Telecommunications? Rob Frieden, Pioneers Chair and Professor of Telecommunications and Law Penn State University web site: blog site: A Presentation to Graduate Students of the Penn State College of Communications September, 2010

Main Points of the Book The information, communications and entertainment (“ICE”) industry represents about 10% of the national economy. With growth incumbent stakeholders have increased tactics to maintain market share, repel competition and “capture” or thwart regulators. The information, communications and entertainment (“ICE”) industry represents about 10% of the national economy. With growth incumbent stakeholders have increased tactics to maintain market share, repel 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 overstates the level of competition and consumer welfare. The FCC frequently engages in results-driven decision making that overstates the level of competition and consumer welfare. Growing numbers of “astro-turf” organizations falsely claim to represent the public. Growing numbers of “astro-turf” organizations falsely claim to represent the public. The U.S. is losing its competitive advantage in some ICE sectors, because of a “morass or partisanship, pseudo science, fuzzy math, creative interpretation of economic principles and legal concepts, selective interpretation of the facts, innovative collection of statistics, and flawed thinking.” The U.S. is losing its competitive advantage in some ICE sectors, because of a “morass or partisanship, pseudo science, fuzzy math, creative interpretation of economic principles and legal concepts, selective interpretation of the facts, innovative collection of statistics, and flawed thinking.” 2

Main Points of the Book (cont.) The book poses the following questions: How can the United States demonstrate global best practices in some information and communications technology markets, such as software and computing, but woefully lag in others, such as in wireless and broadband services? How can the United States demonstrate global best practices in some information and communications technology markets, such as software and computing, but woefully lag in others, such as in wireless and broadband services? If the information revolution was supposed to “change everything” how did over $1 trillion in investment largely evaporate in three years ? If the information revolution was supposed to “change everything” how did over $1 trillion in investment largely evaporate in three years ? How can incumbent telephone companies successfully argue the need for governments to create incentives for investment in next generation networks while at the same time claiming the existence of robust competition eliminates the need for any other sort of government involvement? How can incumbent telephone companies successfully argue the need for governments to create incentives for investment in next generation networks while at the same time claiming the existence of robust competition eliminates the need for any other sort of government involvement? 3

Main Points of the Book (cont.) Why have nations failed to bridge the Digital Divide despite having created subsidy mechanisms that invest billions annually in never achieved solutions? Why have nations failed to bridge the Digital Divide despite having created subsidy mechanisms that invest billions annually in never achieved solutions? If the ICE marketplace has become so robustly competitive, where are the usual consumer benefits of lower prices, diverse choices, and responsive customer service? If the ICE marketplace has become so robustly competitive, where are the usual consumer benefits of lower prices, diverse choices, and responsive customer service? Why does it appear that incumbent ventures can belatedly embrace new technologies yet eventually extend their market power by acquiring or extinguishing most competitive threats through mergers and acquisitions? Why does it appear that incumbent ventures can belatedly embrace new technologies yet eventually extend their market power by acquiring or extinguishing most competitive threats through mergers and acquisitions? Why have nations, including the United States, lost their comparative and competitive advantage in ICE products and services? And Why have nations, including the United States, lost their comparative and competitive advantage in ICE products and services? And 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 “walled gardens” of content and services offered by incumbents keen on disadvantaging newcomers offering the “next best thing”? 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 “walled gardens” of content and services offered by incumbents keen on disadvantaging newcomers offering the “next best thing”? 4

The Book in the Context of Graduate Media Studies Winning the Silicon Sweepstakes examines the political economy of communications/information policy. Such qualitative work offers prescriptive remedies. Winning the Silicon Sweepstakes examines the political economy of communications/information policy. Such qualitative work offers prescriptive remedies. Policy analysis integrates many academic disciplines including law, economics, business, accounting, engineering and political science. Accept (or at least tolerate) such interdisciplinarity. Policy analysis integrates many academic disciplines including law, economics, business, accounting, engineering and political science. Accept (or at least tolerate) such interdisciplinarity. Policy analysis also requires digital literacy: the ability not only to use ICE technologies, but to understand how they work and what impact they have on society. Policy analysis also requires digital literacy: the ability not only to use ICE technologies, but to understand how they work and what impact they have on society. Policy analysts also may seek to influence outcomes. One should disclose any financial support for prescriptive, advocacy documents. Policy analysts also may seek to influence outcomes. One should disclose any financial support for prescriptive, advocacy documents. 5