I have come across some very silly applications of antitrust principles in my time, but this one has just moved up to the top of my list. Over on Business Week.com, Jason Brightman argues that video game retailers such as Game Stop are “forcing” consumers to commit to expensive product bundles in order to get their hands on a new PlayStation 3 or Nintendo Wii gaming console.
Mr. Brightman apparently thinks there is some sort of grave cosmic injustice at work when retailers bundle together gaming consoles with games or other products and require that users agree to purchase that bundle in order to be one of the first people to get their hands on a hot new console. He argues:
“Unfortunately it’s become all too common in recent years for retailers, particularly specialty stores like GameStop/EB, to pull a fast one on consumers who are all too eager to get the newest consoles at launch–remember last year’s $1,000+ Xbox 360 bundles? While it’s true that pre-order campaigns for brick-and-mortar locations allowed customers to pre-order nothing but the console, why should online consumers get the shaft? And is this even legal?… [U]nfortunately, it looks like this ‘predatory packaging’ is legal, but why the heck are consumers getting these console bundles shoved down their throats?”
Oh, come on! You have got to be kidding me. This is called capitalism, buddy. You know… supply-and-demand… rationale pricing of scarce goods… efficient market allocation, etc, etc. In fact, I want to make the exact opposite point that Brightman makes: I think the folks that are selling these consoles on a conditional basis or for a large mark-up are doing society a great service because they are ensuring that those of us who really want these scarce consoles the most can get are hands on them right away.
Unless he wants to make the argument that video game consoles have suddenly become life essential goods on par with food and water, his argument is just plain silly. After all, would anyone die if they had to wait a few weeks before they bought a stand-alone video game console at regular retail prices? How spoiled are we as a culture when we’re even having a debate about fair video game console allocation!?!
Incidentally, what about all those people on eBay selling the extra consoles they bought for major mark-ups? Should they all be in jail? Or perhaps the DOJ or FCC should regulate the video game console marketplace to determine fair prices and efficient distribution of video game consoles to the masses. Perhaps the rallying cry for this new regulatory movement can be “From each according to his [gaming] abilities, to each according to his [gaming] needs.”
Ridiculous.
In the latest issue of Heartland’s IT&T News, S.T. Karnick has an excellent article about the decline of media consolidation fears:
Leftist critics complained about the corporatization and consolidation of the media as an unwelcome phenomenon in the ’60s and thereafter, and they were correct to point out there would be deleterious effects. There may indeed have been an initial increase in sameness of movie and TV productions and a loss of creativity and vitality in the book publishing industry, especially in the fiction section.
Market-oriented analysts simply replied by saying the consolidation was good because it was what people wanted and they wouldn’t do it if it didn’t make sense. That was not the correct response, however. People do stupid things, and corporations do stupid things too.
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Gary Shapiro has commented on my recent post about the Cary Sherman article. He posted the full text of the 2002 speech from which Cary Sherman plucked a few words to quote. It’s worth checking out.
Jim Harper and I have a new project in the works that you might be interested in. There’s been a lot written in recent months about peer production, the term Yochai Benkler coined to describe decentralized, non-commercial projects like Linux and Wikipedia. We think that someone needs to write a paper explaining the the phenomenon and relating it to the ideals of economic freedom that we focus on here on TLF.
And just for fun, we’d like to try a little experiment: can a paper about peer production be produced using peer production? We’ve set up a wiki, and we’d like to invite the libertarian open source geeks of the world to stop by and help us explain what peer production is, why it works so well, and how it’s related to economic freedom.
If the project takes off, we plan to pitch it for publication by a major think tank. Please join us! Contribute a sentence, a paragraph, or a whole section. Peer producing a paper about peer production… it’s so meta!
This is an impressive exercise in issue-dodging on the part of the RIAA’s Cary Sherman:
The “Digital Freedom” campaign claims that the entertainment industry’s goal is to “outlaw new digital technology and devices.” This kind of knowingly false and incendiary rhetoric is designed to distort the issue and thwart solutions by demonizing us. The fact is, we are not only music fans, but technology fans, too. We celebrate advances in technology and recognize the importance of finding new ways to deliver content.
Instead of redefining fair use to promote a short-term free-for-all, let’s embrace the existing concept to allow for long-term growth of technology, while valuing and protecting the content it carries. That benefits us all.
Maybe I’m missing something, but it seems to me that this is an example of “outlawing new digital technology and devices”–in this case, satellite radios with record functionality. Yet, Sherman manages to write more than 800 words without even mentioning satellite radios. In fact, I don’t think he mentions any of the policy debates that have occurred since the Grokster decision. It’s as if the RIAA just laid off all of its lawyers and lobbyists in the summer of 2005, and for some reason, that darned CEA just keeps picking on them for no apparent reason.
For the past few days, TLF’s Tim Lee and Brooke Oberwetter of the Competitive Enterprise Institute have been engaging in a, well, spirited discussion over net neutrality. The whole thing seems to have started when Oberwetter linked approvingly to one of Tim’s TLF posts. Proving that no good deed goes unpunished, Tim responded with a detailed criticism of Oberwetter. Such is the blogosphere.
You can see the whole gory mess here, here, here, and here. Oberwetter argues that tiered pricing for content delivery could potentially benefit consumers, by opening up another dimension of competition. Tim comes down hard on this idea–arguing that such a fee system is unlikely to develop, and in any case would be a bad thing.
At the risk of shattering the image of universal pan-TLF consensus, I have some problems with Tim’s easy dismissal of this potential market development.
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I’ve been neglecting my blogging over the past week since my free time has been occupied with setting up my latest high-tech toy–Sony’s “Location Free TV.” To keep pace with the increasingly popular Slingbox, which also allows consumers to space- or place-shift their TV and other video signals, Sony has just released a new box (the LP-20) that retails for $250 bucks and has more features than their first generation Location Free boxes. As I was setting it up and troubleshooting various connection problems (and I had quite a few), I kept wondering about whether or not this new Sony device would raise any copyright issues.
Like the Sling, Sony’s Location Free box allows you to watch your home TV signals on your personal computer anywhere you want via an Internet connection. An added bonus with the Sony box is the ability to also watch TV remotely on your PlayStation Portable (PSP) gaming device. It’s a very cool feature but my experience with it so far has been a mixed bag. The PSP suffers from more latency issues (probably due to its more limited wireless networking capabilities) and picture quality really becomes unbearable at times as a result.
But watching TV remotely on my laptop looks pretty good and the desktop software that Sony provides makes it very easy to program in my cable set-top box codes and special buttons (like the button I use to call up my PVR archive so I can watch recorded TV shows while I’m on the road). And I can also use the Location Free box to control another video source, such as my DVD player. So, when I’m stuck in an airport trying to keep my kids from melting down, I can remotely access an animated movie sitting in my DVD tray back home. Very, very cool.
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The Samba team is not happy about the Microsoft-Novell deal:
One of the fundamental differences between the proprietary software world and the free software world is that the proprietary software world divides users by forcing them to agree to coercive licensing agreements which restrict their rights to share with each other, whereas the free software world encourages users to unite and share the benefits of the software.
The patent agreement struck between Novell and Microsoft is a divisive agreement. It deals with users and creators of free software differently depending on their “commercial” versus “non-commercial” status, and deals with them differently depending on whether they obtained their free software directly from Novell or from someone else.
The goals of the Free Software community and the GNU GPL allow for no such distinctions.
Furthermore, the GPL makes it clear that all distributors of GPL’d software must stand together in the fight against software patents. Only by standing together do we stand a chance of defending against the peril represented by software patents. With this agreement Novell is attempting to destroy that unified defense, exchanging the long term interests of the entire Free Software community for a short term advantage for Novell over their competitors.
The GPL, at its heart, is about reciprocity: you’re permitted to distribute the software, without restrictions, provided you respect the equal freedom of others to do the same. Although Novell itself hasn’t done anything to directly restrict users’ freedom under the GPL, this agreement is clearly a step in the direction of making non-Novell users of GPL’ed software second class citizens under patent law.
It’s debatable whether the Microsoft-Novell agreement violates the letter of the GPL, and it seems unlikely that anyone will be able to prevail against Novell in court. But I think it’s pretty clear that Novell’s actions violate the spirit of the GPL. It will be interesting to see if the free software community is able to effectively punish Novell through ostracism.
Brooke Oberwetter and I have been having an interesting discussion here and here about network neutrality. I want to start by emphasizing that I wholeheartedly agree with Brooke’s broad point that technologies change over time, and so we should be skeptical of proposals to artificially restrain that evolution by giving government bureaucrats the power to second-guess the design decisions of network engineers. Doubtless the Internet will evolve in ways that neither of us can predict today, and we don’t want the law to stand in the way.
But Brooke went beyond that general point and offered some specific examples of ways she thinks the Internet might change. Her main contention seems to be that the end-to-end principle is overrated, and that “the only reason they’re so revered is because they are simply what is.” I think this is fundamentally mistaken: people have good reasons for revering the end-to-end principle, and abandoning it would be a very bad idea. I’ll discuss some of her specific arguments below the fold.
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I’m trying to wrap my head around the scenario I criticized earlier today, where a broadband ISP charges individual sites for faster speeds.
Let’s suppose, for the sake of argument, that Comcast imposes a half-second delay into the loading of any website that doesn’t pay a special high-speed access fee. The fee might be $1 for every 100,000 page views. This website gets roughly 100,000 page views per month, so we’d owe about $1/month to Comcast if we wanted to avoid having our site load slowly for Comcast customers. A site like Techdirt, which gets roughly 100 times as much traffic as we do, would owe Comcast about $100/month if it didn’t want its traffic slowed. Google, which gets 100,000 times as much traffic as us, would have to pay about $100,000 per month. Clearly, such a scheme could bring in tens of millions of dollars in additional revenue each year.
Of course, it would be ridiculous for us to send Comcast a $1 check each month. Especially since we would presumably be expected to do the same thing with Verizon, AT&T, Charter, Sprint, Qwest, and dozens of smaller ISPs. Running a “high speed” web site would require writing dozens of checks to dozens of different network owners.
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The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.