By attorney Lars Liebeler, in CNET, a discussion of recent antitrust actions here and abroad, in particular scrutiny of the Novell/Microsoft agreement.
Each generation has its antitrust bogeyman from Standard Oil down to AT&T & IBM. The short-run obsession in policy circles with a single company (when policy properly conceived ought to be anonymous for the best results in the long run) invites gaming the system, and results in exceptions dominating what ought to be the rules to an alarming extent. Principled resistance to this tendency is very weak in the EU, where fines are seized on to feed growing armies of bureaucrats in Brussels and the trend is fueled by anti-Americanism.
My friend Tim Carney points out the absurdity of the NAB’s lobbying campaign against the XM-Sirius merger:
The National Association of Broadcasters has paid top dollar for the Carmel Group to produce a paper arguing that XM and Sirius satellite radio should not be allowed to merge, the NY Post is reporting (and Drudge is linking). The crux of their argument is that a joint XM-Sirius will not face competition. This implies that digital radio and terrestrial radio generally do not compete with satellite radio. If the don’t compete, then why is NAB spending so much to block the merger?
Frankly, the fact that NAB is so opposed is the strongest argument I can think of for allowing it.
Also, check out Tim’s excellent article in the Examiner on the NAB’s lobbying campaign.
Over the past few days there’s been some lively blogosphere speculation going on regarding Google’s position on net neutrality. A few weeks ago, I noted that Andrew McLaughlin, Google’s top policy guy, had argued against an FCC role in net neutrality, saying that neutrality should be thought of as “an attorney general or FTC problem.” Earlier this week, TLF’s Drew Clark, writing on GigaOm.com, made the case that an even more extensive re-think is going on in Mountain View. Clark pointed out that McLaughlin, in addition to distancing Google from the FCC, also opened the door a crack to charges for quality-of-service guarantees, saying “[t]here is a pragmatic view that it is OK as long as it is done in a non-discriminatory way.”
None of this means Google is about to join the free-market camp (though we’d love to have them). It does put a lot of distance, however, between them and their allies. According to Clark, this has caused “a fair bit of angst” within Google and among those allies.
Clark’s piece spurred an almost immediate rebuttal from Tim Karr of Free Press, one of the leading non-profit groups in the pro-regulation camp. Writing in the Huffington Post, Karr denied that Google was going wobbly. His evidence? Well, he asked them, and they denied it. “Google’s position on Net Neutrality has not changed one bit,” he quotes a Google spokesman as saying.
Well, that certainly settles the matter, doesn’t it? I mean, if Google was shifting its position, it would say so, wouldn’t it? One can just see the statement: “We regret any inconvenience but we now realize what we were saying last year was just plain wrong. Lord knows what we were thinking. Never mind.”
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Who doesn’t want Ryanair and its cheap flights (passengers often just pay taxes and fees on sale prices) to offer the same fares domestically in the U.S.? Well, based on current law, our government doesn’t. And as I’ve said before on NPR’s Kojo Nnamdi Show, in an article for CEI’s Monthly Planet, and while moderating a panel discussion, the regulation of international air travel must change.
Unfortunately, cabotage rights that prohibit European airlines like Ryanair from operating on American domestic routes are not on the bargaining table. But a bilateral U.S. – EU “open skies” deal that was provisionally agreed to on March 2 should be approved, even if it’s only, as is said in an Economist article, “baby steps.”
The airline industry has much in common with other network industries such as railroads, electrical power, and telecommunications. The airline industry remains heavily regulated despite partial deregulation with the 1978 Airline Deregulation Act, especially with international travel.
Like all network industries, the air travel sector involves both flows and a grid. The flows are the mobile system elements: the airplanes, the trains, the power, the messages, etc. The grid is the infrastructure over which these flows move: the airports and air traffic control system, the tracks and stations, the wires and cables, the electromagnetic spectrum, and so on. Network efficiency depends critically on the close coordination of grid and flow operating and investment decisions.
Consumers would benefit if governments would get out of the way and allow the market to determine international routes, just as U.S. consumers benefited when the 1978 Act allowed the market to determine the number and frequency of domestic routes.
As everyone knows by now, whether the proposed Sirius-XM satellite radio merger goes through has turns, in large part, on the definition of the market in which the companies compete.
And it’s no secret that many tech analysts, being (often) forward-looking, recognize that satellite radio’s weakness is due to the competition it faces from other market segments.
But an analyst quoted in a Times column today makes a more interesting point:
“The question they have to ask now is: what problems haven’t been solved in the car?” said Michael Urlocker, a former wireless analyst with UBS Securities who is now the chief executive of The Disruption Group, a Toronto-based consulting company. “The lack of customer sign-ups on a profitable basis should be a sign that trying to create a better iPod than Apple is a losing proposition.”
In other words, satellite radio–today, tomorrow, and forever–is a losing proposition, not a powerful duopoly.
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Welcome to the first episode of TLF’s new podcast! Tech Policy Weekly from the Technology Liberation Front is a weekly discussion about technology policy from TLF’s learned band of contributors. It features some of the brightest and most provocative minds in the field of technology public policy commenting on the regulation of the internet, media, privacy, intellectual property, and all things tech.
The shows’s panelists this week are Jerry Brito, Tim Lee, Adam Thierer, and PJ Doland. Topics include,
- Skype’s petition to the FCC asking for wireless net neutrality rules a la Tim Wu
- The antitrust and media implications of the proposed XM-Sirius satellite radio merger
- Is a spectrum commons really a third way between regulation and privatization?
There are several ways to listen to the TLF Podcast. Press play on the player to listen right now, download the MP3 file, or subscribe to the podcast by clicking on your preferred service below. And do us a favor, Digg this podcast!
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Matt Yglesias channels Adam Thierer’s point about the XM-Sirius merger:
If The New York Times says a Sirius-XM merger is “sure to raise antitrust issues” then I’m happy to believe them. I have a hard time seeing a serious issue here, however. As is typical in these cases, the relevant think is the definition of the market. If you think there’s a discrete “satellite radio” market then, yes, a combined Sirius-XM entity would clearly have monopoly power in that market. Realistically, though, the product both Sirius and XM are selling–audio broadcasts–is one for which there’s a great deal of competition. Cable and satellite television providers are capable of delivering similar content, though in not as convenient-to-use a manner. People can listen to CDs, buy internet music subcription services, subscribe to “podcasts,” and, of course, satellite radio needs to compete with its freely available terrestrial radio counterpart.
After all, at the moment I–like most Americans–don’t have a satellite radio subscription even though I’m pretty gadget inclined. The logic of the business is that the merged entity needs to grow, which is to say continue trying to offer a deal that people find appealing compared to our many other entertainment options, not our satellite radio options.
Another, purely pragmatic consideration that makes me think this merger will be a good thing is that satellite radio is currently locked in a couple of high-profile lobbying battles in which they are, as far as I can see, on the side of the angels. They’re battling the RIAA over the “analog hole.” And they’re also fighting a protectionist proposal by terrestrial broadcasters to ban satellite radio from offering local programming. The merged company is likely to have the financial resources to retain a higher caliber of lobbying talent which will, I hope, allow them to prevail in both of those fights. Obviously, I’d prefer if companies could just focus on their business and not retain lobbyists at all, but if the RIAA and broadcasters are going to push blatantly anti-consumer legislation, I’d at least like to see the other side have the resources to fight back.
WASHINGTON, January 23, 2007–Those who would “Save the Internet” came to Memphis last week and declared victory in their struggle. They also hosted a party to celebrate and launch the next phase of the battle: going on the offensive.
The SavetheInternet.com Coalition is, of course, David to the Bell companies’ Goliath. Over the last two years AT&T, Verizon Communications and their trade group the United States Telecom Association spent more than $50 million lobbying Congress to change the nation’s telecommunications laws, according to disclosure documents. But it was spent in vain. The Bell-favored bill, which had overwhelmingly passed the House, died last year in the Senate.
In contrast, SavetheInternet.com spent $250,000 on educating the public about its side of the story, said coalition spokesman Craig Aaron. “Save the Internet” opposed the Bell bill, and made “Net Neutrality” its rallying cry. The coalition gathered more than 1.5 million petition signatures supporting the notion that telecom companies must be stopped from controlling the content that flows over their broadband networks
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Michael Arrington at TechCrunch has posted two videos relating to the iPhone. The first is an interview with Steve Ballmer that gives good insight into the state of competition in the device market. Ballmer scoffs at the iPhone’s high price point (and lack of current availability), while conceding that MSFT is behind in MP3 players. The second video, though, shows just why the iPhone is likely to do well. It may be high-priced, but it has incredible capabilities. Do check it out.
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.