Six months may not seem a great deal of time in the general business world, but in the Internet space it’s a lifetime as new websites, tools and features are introduced every day that change where and how users get and share information. The rise of Facebook is a great example: the social networking platform that didn’t exist in early 2004 filed paperwork last month to launch what is expected to be one of the largest IPOs in history. To put it in perspective, Ford Motor went public nearly forty years after it was founded.
This incredible pace of innovation is seen throughout the Internet, and since Google’s public disclosure of its Federal Trade Commission antitrust investigation just this past June, there have been many dynamic changes to the landscape of the Internet Search market. And as the needs and expectations of consumers continue to evolve, Internet search must adapt – and quickly – to shifting demand.
One noteworthy development was the release of Siri by Apple, which was introduced to the world in late 2011 on the most recent iPhone. Today, many consider it the best voice recognition application in history, but its potential really lies in its ability revolutionize the way we search the Internet, answer questions and consume information. As Eric Jackson of Forbes noted, in the future it may even be a “Google killer.”
Of this we can be certain: Siri is the latest (though certainly not the last) game changer in Internet search, and it has certainly begun to change people’s expectations about both the process and the results of search. The search box, once needed to connect us with information on the web, is dead or dying. In its place is an application that feels intuitive and personal. Siri has become a near-indispensible entry point, and search engines are merely the back-end. And while a new feature, Siri’s expansion is inevitable. In fact, it is rumored that Apple is diligently working on Siri-enabled televisions – an entirely new market for the company.
The past six months have also brought the convergence of social media and search engines, as first Bing and more recently Google have incorporated information from a social network into their search results. Again we see technology adapting and responding to the once-unimagined way individuals find, analyze and accept information. Instead of relying on traditional, mechanical search results and the opinions of strangers, this new convergence allows users to find data and receive input directly from people in their social world, offering results curated by friends and associates. Continue reading →
Congress freed up much-needed electromagnetic spectrum for mobile communications services Friday (H.R. 3630), but it set the stage for years of wasteful lobbying and litigating over whether regulators should be allowed to pick winners and losers among mobile service providers.
The wireless industry has thrived in the near absence of any regulation since 1993. But lately the Federal Communications Commission has been hard at work attempting to change that.
A leaked staff report in December helped sink AT&T’s attempted acquisition of T-Mobile. And the commission has taken the extraordinary step of requesting public comments on an agreement between Comcast and Verizon Wireless to jointly market their respective cable TV, voice and Internet services, beginning in Portland and Seattle. Nothing in the Communications Act prohibits cable operators and mobile phone service providers from jointly marketing their products.
FCC Chairman Julius Genachowski objected to a previous version of the spectrum bill which, among other things, would have prohibited the commission from manipulating spectrum auctions for the benefit of preferred entities. The limitation was removed, and Sec. 6404 provides that nothing in the legislation “affects any authority the Commission has to adopt and enforce rules of general applicability, including rules concerning spectrum aggregation that promote competition.
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- Ceci c’est un meme.
On Forbes today, I look at the phenomenon of memes in the legal and economic context, using my now notorious “Best Buy” post as an example. Along the way, I talk antitrust, copyright, trademark, network effects, Robert Metcalfe and Ronald Coase.
It’s now been a month and a half since I wrote that electronics retailer Best Buy was going out of business…gradually. The post, a preview of an article and future book that I’ve been researching on-and-off for the last year, continues to have a life of its own.
Commentary about the post has appeared in online and offline publications, including The Financial Times, The Wall Street Journal, The New York Times, TechCrunch, Slashdot, MetaFilter, Reddit, The Huffington Post, The Motley Fool, and CNN. Some of these articles generated hundreds of user comments, in addition to those that appeared here at Forbes.
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Over at TIME.com, [I write that](http://techland.time.com/2012/01/17/why-googles-biggest-problem-isnt-antitrust-with-search-plus-your-world/) while some claim that Google Search Plus Your World violates antitrust laws, it likely doesn’t. But I note that Google does have a big problem on its hands: market reaction.
>So if antitrust is not Google’s main concern, what is? It’s that user reaction to SPYW and other recent moves may invite the very switching and competitive entry that would have to be impossible for monopoly to hold. … Users, however, may not wait for the company to get it right. They can and will switch. And sensing a weakness, new competitors may well enter the search space. The market, therefore, will discipline Google faster than any antitrust action could.
Read [the whole thing here](http://techland.time.com/2012/01/17/why-googles-biggest-problem-isnt-antitrust-with-search-plus-your-world/).
After three years of politicking, it now looks like Congress may actually give the FCC authority to conduct incentive auctions for mobile spectrum, and soon. That, at least, is what the FCC seems to think.
At CES last week, FCC Chairman Julius Genachowski largely repeated the speech he has now given three years in a row. But there was a subtle twist this time, one echoed by comments from Wireless Bureau Chief Rick Kaplan at a separate panel.
Instead of simply warning of a spectrum crunch and touting the benefits of the incentive auction idea, the Chairman took aim at a House Republican bill that would authorize the auctions but limit the agency’s “flexibility” in designing and conducting them. “My message on incentive auctions today is simple,” he said, “we need to get it done now, and we need to get it done right.” Continue reading →
By Berin Szoka, Geoffrey Manne & Ryan Radia
As has become customary with just about every new product announcement by Google these days, the company’s introduction on Tuesday of its new “Search, plus Your World” (SPYW) program, which aims to incorporate a user’s Google+ content into her organic search results, has met with cries of antitrust foul play. All the usual blustering and speculation in the latest Google antitrust debate has obscured what should, however, be the two key prior questions: (1) Did Google violate the antitrust laws by not including data from Facebook, Twitter and other social networks in its new SPYW program alongside Google+ content; and (2) How might antitrust restrain Google in conditioning participation in this program in the future?
The answer to the first is a clear no. The second is more complicated—but also purely speculative at this point, especially because it’s not even clear Facebook and Twitter really want to be included or what their price and conditions for doing so would be. So in short, it’s hard to see what there is to argue about yet.
Let’s consider both questions in turn.
Should Google Have Included Other Services Prior to SPYW’s Launch?
Google says it’s happy to add non-Google content to SPYW but, as Google fellow Amit Singhal told Danny Sullivan, a leading search engine journalist:
Facebook and Twitter and other services, basically, their terms of service don’t allow us to crawl them deeply and store things. Google+ is the only [network] that provides such a persistent service,… Of course, going forward, if others were willing to change, we’d look at designing things to see how it would work.
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By Geoffrey Manne and Berin Szoka
Back in September, the Senate Judiciary Committee’s Antitrust Subcommittee held a hearing on “The Power of Google: Serving Consumers or Threatening Competition?” Given the harsh questioning from the Subcommittee’s Chairman Herb Kohl (D-WI) and Ranking Member Mike Lee (R-UT), no one should have been surprised by the letter they sent yesterday to the Federal Trade Commission asking for a “thorough investigation” of the company. At least this time the danger is somewhat limited: by calling for the FTC to investigate Google, the senators are thus urging the agency to do . . . exactly what it’s already doing.
So one must wonder about the real aim of the letter. Unfortunately, the goal does not appear to be to offer an objective appraisal of the complex issues intended to be addressed at the hearing. That’s disappointing (though hardly surprising) and underscores what we noted at the time of the hearing: There’s something backward about seeing a company hauled before a hostile congressional panel and asked to defend itself, rather than its self-appointed prosecutors being asked to defend their case.
Senators Kohl and Lee insist that they take no position on the legality of Google’s actions, but their lopsided characterization of the issues in the letter—and the fact that the FTC is already doing what they purport to desire as the sole outcome of the letter!—leaves little room for doubt about their aim: to put political pressure on the FTC not merely to investigate, but to reach a particular conclusion and bring a case in court (or simply to ratchet up public pressure from its bully pulpit). Continue reading →
Today, AT&T announced they had abandoned their planned acquisition of T-Mobile after the DOJ sued to block the deal and the FCC published a report sharply critical of the deal. The following statement can be attributed to TechFreedom Fellows Larry Downes, Geoffrey Manne and Berin Szoka:
Nearly two years ago, the Obama FCC declared a spectrum crisis. But Congress has refused to authorize the agency to reallocate underused spectrum from television broadcasters and government agencies—which would take years anyway.
The AT&T/T-Mobile merger would have eased this crisis and accelerated the deployment of next-generation 4G networks. The government killed the deal based on formalistic and outdated measures of market concentration—even though the FCC’s own data show dynamic competition, falling prices, and new entry. The disconnect is jarring.
Those celebrating the deal’s collapse will wake up to a sober reality: There is no Plan B for more spectrum. All the hand-wringing about “preserving” competition has only denied consumers a strong 4G LTE competitor to compete with Verizon—and slammed the brakes on continued growth of the mobile marketplace.
Unfortunately, this is just part of a broader pattern of regulators attempting to engineer technology markets they don’t understand. The letter sent today by the Senate Antitrust Subcommittee urging the Department of Justice to investigate Google’s business practices relies on similar contortions of market definition to conclude that the search market is not competitive. In both cases, regulators are applying 1960s economics to 21st century markets.
Ultimately, it’s consumers who will lose from such central planning.
I’ve written several articles in the last few weeks critical of the dangerously unprincipled turn at the Federal Communications Commission toward a quixotic, political agenda. But as I reflect more broadly on the agency’s behavior over the last few years, I find something deeper and even more disturbing is at work. The agency’s unreconstructed view of communications, embedded deep in the Communications Act and codified in every one of hundreds of color changes on the spectrum map, has become dangerously anachronistic.
The FCC is required by law to see separate communications technologies delivering specific kinds of content over incompatible channels requiring distinct bands of protected spectrum. But that world ceased to exist, and it’s not coming back. It is as if regulators from the Victorian Age were deciding the future of communications in the 21st century. The FCC is moving from rogue to steampunk.
With the unprecedented release of the staff’s draft report on the AT&T/T-Mobile merger, a turning point seems to have been reached. I wrote on CNET (see “FCC: Ready for Reform Yet?”) that the clumsy decision to release the draft report without the Commissioners having reviewed or voted on it, for a deal that had been withdrawn, was at the very least ill-timed, coming in the midst of Congressional debate on reforming the agency. Pending bills in the House and Senate, for example, are especially critical of how the agency has recently handled its reports, records, and merger reviews. And each new draft of a spectrum auction bill expresses increased concern about giving the agency “flexibility” to define conditions and terms for the auctions.
The release of the draft report, which edges the independent agency that much closer to doing the unconstitutional bidding not of Congress but the White House, won’t help the agency convince anyone that it can be trusted with any new powers. Let alone the novel authority to hold voluntary incentive auctions to free up underutilized broadcast spectrum.
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AT&T and T-Mobile withdrew their merger application from the Federal Communications Commission Nov. 29 after it became clear that rigid ideologues at the FCC with no idea how to promote economic growth were determined to create as much trouble as possible.
The companies will continue to battle the U.S. Department of Justice on behalf of their deal. They can contend with the FCC later, perhaps after the next election. The conflict with DOJ will take place in a court of law, where usually there is scrupulous regard for facts, law and procedure. By comparison, the FCC is a playground for politicians, bureaucrats and lobbyists that tends to do whatever it wants.
In an unusual move, the agency released a preliminary analysis by the staff that is critical of the merger. Although the analysis has no legal significance whatsoever, publishing it is one way the zealots hope to influence the course of events given that they may no longer be in a position to judge the merger, eventually, as a result of the 2012 election.
This is not about promoting good government; this is about ideological preferences and a determination to obtain results by hook or crook. Continue reading →
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