Archives for the 'Competition Policy' Category
Too Much Platform Competition?
How much platform competition is too much competition? For example, what is the optimal number of mobile operating systems or video game consoles that will spur competition and innovation in those respective sectors?
It is an interesting business question, but it also has some policy implications since some might propose laws or regulations to remedy a perceived lack of platform competition in various sectors. After all, many people would answer the above question by saying that there is never such a thing as too much competition. The more platforms the better. But there can be costs associated with too much competition. Let’s consider those two case studies mentioned above: mobile operating systems or video game consoles.
Mobile Operating Systems
As my colleague Berin Szoka has pointed out, we are witnessing the rapid proliferation of mobile operating systems, especially on the open source front. So, we’ve got Apple’s iPhone platform, Microsoft’s Windows Mobile, Symbian, Google’s Android, the LiMo platform, and OpenMoko.
One one hand, all this platform competition sounds great. But as Ben Worthen of the Wall Street Journal’s “Business Tech Blog” points out in a piece today:
Continue reading this post »
A Debate About Data Confidentiality and the Forthcoming ‘Broadband Census for America’
A recent post to Dave Farber’s [IP] list:
WASHINGTON, August 8 - I’d like to take a moment to respond to some of the issues raised by the recent e-mail of Brett Glass.
With respect to the issue data confidentiality, it’s important to separate out several issues here:
(1) The names of carriers and the locations in which they offer services, by ZIP code.
(2) The number of subscribers that carriers have in a particular ZIP code.
The Form 477 of the Federal Communications Commission requires carriers to submit both types of information to the FCC.
I agree that category (2) may well be confidential information. I do not think that category (1) can be considered confidential.
The web site that I run, http://BroadbandCensus.com, is an attempt to combine information about broadband from various sources. In addition to “crowdsourcing” data from internet users, we are combining public information from the FCC’s Form 477, publicly available information about carriers and where they offer services, as well as from states and localities. Since we launched BroadbandCensus.com in January 2008, We have had thousands of internet users tell us the names of their providers, where those providers are offering service, and they’ve taken our beta speed test.
It is important to note that Form 477 data released by the FCC does not include the names of the carriers. The FCC recently ordered carriers to begin to provide information on the census tract level (a unit slightly smaller than a ZIP code). However, unless the FCC changes its policy, consumers will still not be able to obtain carrier information from the agency.
Hence, the data we have from the FCC is extremely limited.
Dish Network ponders merger with DirecTV
Just as the 505-day XM Sirius antitrust saga comes to a bittersweet end, reports have resurfaced that a new satellite merger may be in the works. Dish Network is floating the idea of merging with competitor DirecTV. Dish Network and DirecTV, the two largest satellite television providers in the U.S., tried to merge back in 2001. Antitrust officials ultimately blocked that merger, concluding that it would hurt competition in television programming. Naturally, a renewed merger attempt would likely encounter similar obstacles, according to industry observers.
This time around, though, the deal may have a better shot of surviving regulatory scrutiny, buoyed by the approval of the XM-Sirius merger. Compared to 2001, competition among video providers is thriving, and there are more alternatives to satellite television than ever before. Many consumers can now choose from a multitude of terrestrial television providers—phone companies are rapidly rolling out IPTV-based video services like FiOS TV and U-Verse, and cable overbuilders like RCN are gaining momentum in densely populated areas.
In addition, a growing number of viewers are shunning traditional television services entirely, turning to a la carte substitutes like the iTunes episode store, Netflix, and Xbox Live Marketplace. With an $8.99 per month subscription to Netflix, it’s possible to stream instantly a video library eclipsing that available on cable or satellite TV. Ad-supported video websites like Hulu and Comedy Central, which offer hundreds of archived TV shows on the Web for free, may soon render the television channel obsolete.
Dish Network’s talk of a potential merger comes on the heels of the company’s first ever quarterly loss of subscribers, and that may just be the tip of an iceberg. Until recently, television subscribers were largely content with watching programs on a predefined schedule, but on-demand services are changing that. As viewers come to expect the ability to watch any show anytime, without bothering to record it in advance, the lack of bidirectionality inherent in Direct-Broadcast Satellite is a glaring deficiency that cable and telecom firms will exploit at every juncture. Unless satellite providers can negotiate arrangements with broadband carriers, or succeed in building wireless networks with newly acquired spectrum, Dish and DirecTV face a bleak future, especially if they are unable to trim costs and enhance content choice.
Day 505: The XM-Sirius Circus Is Finally Over
It’s over. The FCC, which voted to approve the merger between satellite radio firms XM and Sirius two weeks ago, finally released its formal report on the case on Tuesday, ending the drama 505 days after the firms submitted their application to the Commission.
The episode was not the FCC’s finest hour. The agencies once-vaunted “shot clock” — by which the FCC pledged to decide on mergers within 180 was left in shreds, with the counter going around almost three times before the circus finally ended. Even at that, XM and Sirius managed to claw their way to approval only by making an (ever-longer) series of “voluntary” commitments: including offering “a la carte” programming, capping prices for 36 months, making 8% of its capacity available to others to non-commercial and other entities, and extending service to Puerto Rico. Even more was being considered when the music stopped, including a proposal to require all satellite radio receivers to have built-in HD broadcast tuners as well. (Apparently, there was concern that broadcasters would be frozen out of the audio market, in which they hold a market share of about 96 percent).
This regulatory free-for-all contrasts with the approach taken by the Department of Justice, which — after a fact-specific inquiry, approved the merger - without conditions - five months ago. Continue reading this post »
FCC Hammers Comcast For Deception and Unreasonable Internet Practices
WASHINGTON, August 1 – The Federal Communication Commission’s enforcement action against Comcast can be seen either as a limited response to a company’s deceptive practices, or a sweeping new venture by the agency into regulating internet policy.
In ruling against Comcast on Friday, the agency ordered the company to “disclose the details of its discriminatory network management practices,” “submit a compliance plan” to end those practices by year-end, and “disclose to customers and the [FCC] the network management practices that will replace current practices.”
At issue in the decision was whether Comcast had engaged in “reasonable network management” practices when it delayed and effetively blocked access to users of BitTorrent, a peer-to-peer software program.
Although BitTorrent had already settled its complaints with Comcast, FCC Chairman Kevin Martin said that FCC action was necessary because the complaint had been brought by Free Press and Public Knowledge, two non-profit groups. The FCC did not impose a fine.
Martin said that he viewed the agency’s decision to punish the cable operator as a quasi-judicial matter: a “fact-intensive inquiry” against a specific company that it found to have “selectively block[ed]” peer-to-peer traffic.
[Continue reading "FCC Hammers Comcast For Deception and Unreasonable Internet Management"]
From the FCC, DrewClark.com is Live…
…to cover the hearing at which Comcast is expected to be punished for violations of Network Neutrality. Fortunately, the Federal Communications Commission did not start on time. The great thing about the Kevin Martin FCC is that you never have to worry about being late. For example, we’re live at the FCC for the 9:30 a.m. meeting:
The FCC, 9:49 a.m.
The FCC, 9:49 a.m.
I’ll be live-Twittering the event, so check back on DrewClark.com (look at the column on the right - or just go to Twitter and “follow” me) for the latest updates. Later in the day, I’ll be posting a story about the event at BroadbandCensus.com.
There’s Plenty of Competition in Search and Plenty of Interest
CWA Wants Better Broadband Data, As Does Internet for Everyone
WASHINGTON, July 17 - Communications Workers of America this past week teamed up with a group of telecommunications companies, cable operators and non-profit groups to push for Congress to pass broadband data legislation.
In a Friday letter and a Monday press release, the groups wrote “to express [their] strong support for Congressional action to promote greater availability and adoption of broadband high-speed Internet services.”
They want “a national policy” to encourage more broadband deployment, and they cite economic statistics about broadband’s potential.
And, as a first step, these companies and CWA want Congress to pass the Broadband Census of America Act, H.R. 3919, or the Broadband Data Improvement Act, S. 1492.
Curiously, last month another large coalition announced a similar campaign. They call themselves Internet for Everyone.
Continue reading “CWA Wants Better Broadband Data, As Does Internet for Everyone“
On Google-Yahoo! as an Antitrust Problem
My favorite anti-Google gadfly Scott Cleland has a post up entitled “Debunking the Google-Yahoo Antitrust Myths” in which he purports to debunk some erroneous thinking about the Google-Yahoo! deal.
Where Scott often furnishes the world with interesting ideas in an over-the-top way, here I think he’s gotten it wrong.
He walks through a series of purported “myths” about the antitrust implications of Google-Yahoo!, which got a hearing in the Senate this week. I want to walk through just a couple of them because I think he’s framing the relevant market wrongly.
Continue reading this post »
Declan on Google-Microsoft Antitrust Shenanigans
Declan has got it exactly right here in commenting about the antitrust circus taking place between Google and Microsoft right now as the rhetorical war between them heats up and the feds—both in Congress and at the DOJ—get more and more involved in monitoring this market:
The underlying problem is that antitrust law is so malleable that it can be bent into virtually any shape that its practitioners desire. Given nearly any set of hard-nose business practices, some economist can be hired to claim that “predatory” prices are illegally low (hurting competitors) or illegally high (hurting consumers). No wonder Lester Thurow, the former dean of MIT’s business school, concluded that “the time has come to recognize that the antitrust approach has been a failure. The costs it imposes far exceed any benefits it brings.” And no wonder that some state attorneys general are now sniffing around to see if there’s a way for them to join the antitrust hunt.
And things are only going to get worse–far, far worse–in coming months.
Evolving Theory of Network Effects
Should antitrust enforcers be concerned about entry barriers in the search ad market? Some believe the market exhibits “network effects,” according to the New York Times.
Although traditionally applied to Industrial Age industries with high fixed costs like railroads and telephone exchanges, anything now exhibits a network effect if its value increases because more people use it. Network effects are “everywhere,” according to a top former antitrust official. Coke and Pepsi drinkers, for example, “benefit from the network of their fellow consumers because Coke and Pepsi are widely available in restaurants and in vending machines,” claims Timothy J. Muris.
A preexisting network of vending machines is admittedly tough for soft drink imitators to replicate. But a barrier to imitation can also be viewed as a spur to innovation because it acts as a reward which inspires creators and investors. Not an incentive to create a barely distinguishable alternative, to be sure, but to create something transformative.
The alleged network effects in search advertising are more subtle than in the case of railroads, telephone exchanges or soft drinks (in fact, they even bear a striking resemblance to what one might also term legitimate and hard-won competitive advantages).
Continue reading this post »
Not One, Not Two, but THREE Competing Open Source Mobile Operating Systems
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.
Other reports note that the Symbian Foundation will eventually take Symbian open source, and that this move is as much as response to Apple’s closed iPhone platform as it is to Gogole’s open Android and LiMo platforms. (Although it is intriguing to note that AT&T, Apple’s exclusive U.S. partner for the iPhone, is among the backers of the new Symbian Foundation, perhaps indicating that even AT&T is hedging its bets.)
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. Continue reading this post »
Confusing Fact and Fiction at Techdirt
Mike Masick over on Techdirt yesterday decried the “amount of misinformation flying around” on the retention marketing issue. Unfortunately, however, his attempt to clear things up actually added to the airborne debris.
Specifically, Mike claims that I erred the other day in writing that the question at hand was whether Verizon can contact customers who have agreed to switch telephone service providers, and ask them not to switch. That, he says, is incorrect. Saying that “no one” is saying that telcos can’t try to convince customers not to switch, he claims the issue is instead whether Verizon can delay making the change while it trys to take them out of it:
What the FCC has said is that Verizon cannot abuse its position to block the switch while it tries to convince customers not to switch. That’s what Verizon is doing. When it gets the request from the cable companies to switch, it basically goes into procrastinate mode, even though it’s required to process the switch. It codes the switch request as a “conflict” which gives it extra time to resolve the “conflict” before obeying the switch request.
Masick is simply wrong. The FCC’s order, released Monday, explains clearly that a conflict code is entered only after Verizon is successful at convincing a customer not to change carriers. There’s no claim that, or even a reference to, Verizon improperly delaying any pending switch requests (although the cable industry is certainly pushing for telcos to be required to make switches more quickly).
What the FCC did say was that the information contained in the switch request (i.e., that the customer wants to change), is “proprietary,” and that — to quote Commissioner McDowell: “marketing efforts [based on that information] cannot take place during the window of time when a customer’s phone number is being switched”.
Bottom line: I stand by my original post.
CWA Blog Claims Credit for FCC Data Order, But Ignores Local Company Data
Over at the Communications Workers of America’s blog, Speed Matters, the union claims credit for the Federal Communications Commission’s recent order requiring broadband companies to provide the FCC with more information, including data about availability by Census tract.
The blog notes:
The CWA Speed Matters campaign can claim another victory – this time at the FCC. As part of our Speed Matters campaign, CWA called on the FCC to increase its definition of “high speed” – a definition that had not changed for nine years — and to improve its broadband data collection.
Well, it is possible that the FCC’s broadband data collection will be improved. But the public is not likely to benefit from any improvements. Continue reading this post »
Retention Marketing: Bad Call at the FCC
Targeted by Chairman Kevin Martin’s apparent war on cable, the cable industry has had a tough time at the FCC of late. Being a cable lobbyist at the FCC today is like being a Communist in the State Department in the 1950s. One can just imagine the question: “Are you now, or have you ever been, a user of coaxial technology?”
That said, the cable folks don’t always lose. Just this Friday, they won one – handing a defeat to Martin. The problem is that its one they really should have lost.
The question at hand (addressed ably by Berin Szoka on Friday, and by Adam Thierer earlier) is whether telephone companies should be able to contact customers who have requested that their phone numbers be switched over to a competitor, and try to convince them not to switch. Several cable firms filed a complaint against Verizon over the practice early this year. The practice is anti-competitive, they said, pointing out that Verizon was able to ply customers with “price incentives and gift cards” to convince them not to switch.
In April, the FCC staff said it would side with the telcos on this one. But on Friday the commission voted 4-1 – with Chairman Martin the only ‘no’ vote – to ban the practice.
That is unfortunate. Far from being a threat to competition, being able to fight to keep your customers – and even to ply them with a few incentives – is at the heart of it. The practice is common in other highly competitive industries – just try letting a magazine subscription expire. In fact, as Verizon’s Tom Tauke argues, cable firms have long engaged in similar activity to keep customers from moving to telco video service. Why should it now be wrong for telcos to do the same thing for telephone services?
I don’t say this often, but Chairman Martin was right on this one. Not because cable should lose, but because consumers would win.
-
Welcome.
Search
Categories
- Biotech
- Broadband and Neutrality Regulation
- Competition Policy
- Copyright
- DMCA, DRM, and Piracy
- E-commerce taxation & regulation
- E-Government & Transparency
- First Amendment / free speech
- Inside the Beltway (Politics)
- Internet Governance
- Media Regulation
- Miscellaneous
- Open Source, Open Standards, and Peer Production
- Patents
- Podcast
- Privacy and Government Surveillance
- Sin on the 'Net
- Space
- Tech Pork
- Technology, Business, and Cool Toys
- Telecom and Cable Regulation
- Things that go 'Bump' in the 'Net
- Uncategorized
- What We're Reading
- Wireless and Spectrum Policy
Contributors
Tech Policy
Tech News
Bloggers We Like
Our Sites
Where We Work
-
Sponsors
