Results tagged “anti-trust” from Capitol Valley

...except that it would have been an antitrust nightmare. So is GOOG-YHOO, for that matter. The search market is pretty much a duopoly already. Until someone else innovates, get used to it.

...is still looking at the merger. Never mind that the Department of Justice Antitrust Division has given it the OK, the FCC has its' own complicated, convoluted merger review process that it has invented for itself based on the "public interest" standard it applies from the 1934 Communications Act. 

Of course, the big news today (besides my going-going back-back to cali-cali tonight) was the reaction to the Justice Department's antitrust green light on the XM-Sirius merger.

On the surface, this could be cited as another example of runaway government capitulation towards big business interests and media consolidation, like the FCC's recent revision of the newspaper-TV cross-ownership rules, which significantly tipped the scales towards less consumer choice and more commoditization of media.

One could easily say this about XM-Sirius. In fact, Sen. Byron Dorgan (D-ND) issued a rather...pointed statement which highlights his anger at "this administration's blatant disregard for the public interest" in the media ownership realm."

Dorgan went on to further criticize (rightly) the trend of consolidation in media, and brings up the original conditions of the licenses the FCC issued more than ten years ago:

"There seems to be no limit to the mergers this administration will approve. These two companies were issued licenses a decade ago to provide competing national satellite radio service. Their license approval included a clause that prohibits them from merging into one company...Now the Justice Department has decided the contract they signed can't stand in the way of consolidation. That doesn't make any sense to me."

Well, Senator, it should make sense if you realize that the DOJ's antitrust division reviews tons of mergers and approves or denies them based on their potential to harm the market and not the conditions of their FCC license terms. That part is up to the FCC, which, because it has the combined powers of all three branches of government, can do whatever it pleases, until a court tells it to stop.

When you said that the licenses were issued a decade ago, did you notice that the licenses were issued a decade ago? I realize that's a long time, even longer than a Senator's term in office, but did it ever occur to you that the competitive landscape might have changed, and that there might not be much of a competitive market for two companies that offer pretty much the same product and have hugely expensive operating costs, since you know, keeping satellites in space takes lots of money. Remember Iridium, the Sat-Phone company that the government had to be bailed out to keep their network running so government agencies could use them?

You might also remember when EchoStar and DirecTV tried to merge? It was denied, and those two companies are still lobbing pebbles at Comcast, when (hindsight is 20/20) a combined DBS provider could be offering twice the HD channels at less cost than cable. Instead, they're still competing with each other at pretty much the same price, but not causing any shake-ups in the Cable market. Too bad that merger was denied, huh? Great for Cable, bad for us.

It's pretty clear-cut, Senator. We don't need two Satellite radio companies. We do need more choices in media, though. How about you stick to focusing on why so many terrestrial radio stations have the same owner, serve up the same canned music and news (ever hear of Jack FM?) and well, pretty much suck? At least Satellite Radio plays new music and pushes the envelope. I can hear Bellman Barker or Bob Mould on XM. I might catch the latter on NPR once every few years. Commercial radio? No way. They're too busy playing the latest crap that people won't even pay for.

On the other hand, Rep. Rick Boucher (D-VA) has one helluva clue. From CongressDaily's Andrew Noyes:

Rep. Rick Boucher, D-Va., said he was pleased that DOJ determined the merger does not pose significant competition concerns. He believes the new company will bring numerous benefits to consumers, including the elimination of duplicative programming, which will free up spectrum.

Boucher also lauded the companies' intention to offer multiple post-merger subscription packages. "This unprecedented approach will provide subscribers with more choices and lower prices and will pave the way for a form of content acquisition based on the individual programming preferences of listeners," he said.

 

So, a company that will offer better programming, with more choices at lower prices. Very anticompetitive...if you're Clear Channel.

XM-Sirius is APPROVED.

The merger was approved without conditions despite opposition from consumer groups and an intense lobbying campaign by the land-based radio industry.

The combination still requires approval from the Federal Communications Commission, which prohibited a merger when it granted satellite radio operating licenses in 1997.

The Justice Department, in a lengthy statement explaining its decision, said the two companies compete not just with each other but also with other forms of radio and entertainment. Customers must buy equipment that is exclusive to either XM or Sirius, and subscribers rarely switch providers.

"People just don't do that," an assistant attorney general, Thomas O. Barnett, said in a conference call with reporters.

The government also appeared to endorse the argument of the companies that they compete with other forms of audio entertainment, including "high-definition" radio, Internet-based radio stations and even devices like Apple's iPod

Good for USDOJ for rejecting the idiotic arguments of the National Association of Broadcasters. If anyone remembers, they claimed that Satellite Radio was a totally different animal from the nationally-syndicated, homogenized terrestrial radio behemoths and that XM and Sirius competed with each other, but not against AM and FM. 

I'm sure everyone has heard that R.E.M. is letting people get to the premiere of their new album, Accelerate via the iLike Facebook Application. 

...digital opened up many new ways the record companies can take their music to fans and this is one example. this is through a service called iLike and music is a social thing, people define themselves by it and it is one of the things you talk about with your friends and sharing it is a great way to do it. this is a way of sharing music legally with other friends and you can post it on your blog or Facebook and do other things with it... 

...this is a new model for record companies to take music out there. can they make money out of it? this is a licenceed legal service and what the music business is trying to do against a backdrop of most music being available for free illegally, the record companies are trying to licence as many new services as possible to give music fans an option, because that's what we want. we want more ways for music fans to get their music. that's what the record companies would like. that's the message they would like to send out. nobody really knows. once it is available, it is available and you are trying to convince people to pay for it...a lot of artists realise you don't need a record label, you can say ""i can make it available myself."" 

very few artists can do this. rem have done this through their record company. record companies and artists can do these things and use the new digital services. what does it mean for music? do you think it is good for a band that doesn't have a label, can go out and get people listening to their music?

I see some sad double-talk here. On one hand, the labels wants to allow streaming over the 'net when they see fit, but when 'Net Radio took off, they rushed to extract every dollar out of it because they saw it compromising their existing distribution networks. Not illegally, but in the sense that in that world, they lack their traditional influence in what gets pushed to the top of the DJ's "record stack." So, with the help of the Library of Congress and the Copyright Office, they want to replace 'net radio, especially independent stations and services like Last.Fm and Pandora (which actually drive record sales by pushing new music to consumers based on their tastes) out of business, because it imperils their vertical model of middle-manning that has been in place for the past fifty years. 

(apologies for the rhyming. I couldn't resist).

 

Reuters' DealZone Blog reports that Sirius CEO and Howard Stern's chief benefactor Mel Karmazin has voiced hopes that the FCC would rule on the merger by the end of this month.

At the Bear Stearns 21st Annual Media Conference, Karmazin is quoted as saying that he "took heart" about FCC Chairman Martin's desire to make a final ruling by...the end of March.

On the other hand, as Reuters notes, Karmazin has been wrong before on this.

Karmazin's predictions on timing, however, may prove false since the companies have been wrong before. The satellite radio companies previously predicted that regulators would sign off on their their proposed $4.2 billion merger by the end of 2007.

XM Satellite Radio Holdings Inc Chairman Gary Parsons was less specific than Karmazin when he spoke at the Bear Stearns conference. He merely said he was confident the regulatory review was moving forward "in a timely manner."

Smart interpretation of a cryptic comment from Martin, or just another prediction? XM Chairman Gary Parsons was more circumspect, saying that he was "confident the regulatory review was moving forward in a timely manner."

Of course, it's been more than a year (February 20, 2007) that they announced the proposed merger, which would allow the combined company to offer more programming on their combined spectrum and eliminate the duplicate channels that each of them carry.

Considering the glut of radio station ownership consolidation since the 1996 Telecommunications Act and the FCC's new print-broadcast cross-ownership rules, I'd think that anything which strengthens the Satellite Radio option for consumers to avoid the commercial-laden, boring FM radio dial is a good thing. Already, both XM and Sirius have more diverse content than most of the stations in major markets, simply because they have the ability to offer it. Most radio stations, on the other hand, play the same playlists, and often don't even have a real DJ in-house. They're computer controlled.

Sadly, XM also plays more local DC music than any of DC's terrestrial stations.

I'm generally not a fan of monopolies, but this one wouldn't be a bad thing. When you're competing with free, you need all the help you can get.

Anyone remember Betamax, Sony's VCR format that was technically better than, but cheaper than VHS? Anyone else remember that Sony lost that war to the lower quality but cheaper to license, produce, and sell VHS player? A small snipped that I overlooked in last Wednesday's NYT suggests that Sony might be dooming themselves to repeat history:

 

Mr. Glasgow expressed hope that price levels wouldn't collapse the way they did for DVD players. To protect against this, he said the Blu-ray Association, the group that controls the Blu-ray standard, has not licensed it to any manufacturers in China. (Cheap players from China were a large part of the collapse of the DVD player market.)

"Will there be Chinese players? Yes," he said. "We don't need to drive that and hand the technology over" any time soon, he said.

 

Let me get this straight. You (the Blu-ray Association) are pushing an expensive (albeit high-quality product) that can only survive with widespread adoption, yet you aren't going to allow it to be licensed to manufacturers that can get your product in the hands of millions of customers to keep the price up?

Two things come to mind: most Americans are happy with DVD. We like it more than VHS. It lets us do everything Blu-ray does. Even if we bought HD-DVD players, they still upconvert our regular DVDs to look better. DVD is a nice, open format. We can even make our own movies on DVD. So, for us to want to switch, we really need a clear incentive, and artificially driving the price up does not help.

Second. The Blu-ray association is a group of companies. A "trust" that controls the licensing of patents related to Blu-ray disc technology. Now, for them to refuse to license a technology to a manufacturer that can make a cheaper Blu-ray player, well, that would "fix" the price at a certain level. Come to think of it, isn't "price-fixing" a key component in "anti-trust" law?

I've heard that somewhere before...that whole thing about "price-fixing..." Where was that?

Oh yes, the Sherman Anti-Trust Act. Let's take a look, shall we?

15 U.S.C. §1: Trusts, etc., in restraint of trade illegal; penalty

Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal. Every person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $10,000,000 if a corporation, or, if any other person, $350,000, or by imprisonment not exceeding three years, or by both said punishments, in the discretion of the court.

15 USC §3

Every contract, combination in form of trust or otherwise, or conspiracy, in restraint of trade or commerce in any Territory of the United States or of the District of Columbia, or in restraint of trade or commerce between any such Territory and another, or between any such Territory or Territories and any State or States or the District of Columbia, or with foreign nations, or between the District of Columbia and any State or States or foreign nations, is declared illegal. Every person who shall make any such contract or engage in any such combination or conspiracy, shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $10,000,000 if a corporation, or, if any other person, $350,000, or by imprisonment not exceeding three years, or both said punishments, in the discretion of the court.

 

Uh oh. If you're going to refuse to license a product to keep the price artificially high, shouldn't you refrain from announcing it in the pages of the Grey Lady?

 

Just a thought.

It was just 5 short months ago that IE 7 rolled out.  Now, with pressure to be more "open" (both to avoid another anti-trust scare in the States and due to constant pressure from the EU to be less anti-competitive) Internet Explorer 8 is being released to developers.

 

Reuters has details for you

 

LAS VEGAS (Reuters) - Microsoft Corp on Wednesday made available a test version of Internet Explorer 8, the next edition of its Web browser.

...

Microsoft's presentation was catered heavily toward Web developers, but Hachamovitch showed some user features of IE 8. One feature allows users to save work being done on a Web site to the local computer when an Internet connection goes down.

Another feature lets users highlight an address on a Web site and then see a map within the Web site with a single click. Users can also highlight a product name and be able to see if the item is available for sale on eBay.

...

Earlier this week, Microsoft announced the new browser would use the most-standards-compliant mode by default in rendering Web sites.

That means Web sites will essentially look the same regardless of browser and developers will not need to do multiple versions of Web sites for different browsers.

...

The European Union launched a new antitrust investigation into Microsoft to probe complaints from Norwegian browser maker Opera Software about how Microsoft ensures rival Web browsers are not fully compatible with Internet Explorer.

 

Feature-wise, it seems pretty neat.  I like the ability to pull up a map of an address (hoping it works for email displayed in the browser) just by clicking on it.  The product feature is really cool too, although I'd probably be giddier if it searched Amazon or Buy as opposed to eBay.  It'd be nice for it to look at a more "standard" online retailer where maybe there would be product specs.  Or maybe even a way to toggle which site(s) it look at?  Anyway, I digress.

 

The announcement that IE 8 will load "the most-standards-compliant mode by default" is promising.  I think that between its inability to get XML certified as an international standard and the Russian Ministry of Defence (among others in Eastern Europe) saying "no" to Windows PCs Microsoft is feeling more pressure than ever to be more flexible than before. 

 

I have to say, I look forward to being able to load a website and not have it look ridiculous because it was designed with one browser and viewed with another.

 

Anyone have the test version of Internet Explorer 8 yet?  Let us know what you think!

 

UPDATE:

C|Net's Download.com has a post about IE 8.  Insightful.

In 2004, the EU did what the US DOJ suddenly lost the courage to do after the Bush administration took over and fined Microsoft 497 million Euros for abusing what was then a 95% monopoly on desktop software.

Microsoft paid the fine, and simply kept doing the same thing, keeping Windows Media Player and Internet Explorer "in the box" and even further integrating them into their operating system. In the EU, this is an illegal business practice. They knew this, and didn't care, because I guess some accountant figured that they would still make a profit if they paid the fines while crushing competition.

In 2007, they were fined another 280.5 million Euros for non-compliance, which Microsoft appealed, and lost.

This latest penalty is the largest amount of money that any company has had to pay, and the first time a company has been able to treat such penalties as "the cost of doing business." That's right, normal corporations learn their lesson. Microsoft? Not so much. Money quote, from Reuters:

"Microsoft was the first company in 50 years of EU competition policy that the Commission has had to fine for failure to comply with an antitrust decision," Competition Commissioner Neelie Kroes said in a statement.

For years after the decision Microsoft said it was making every effort to comply with the Commission's orders.

"Talk is cheap, flouting the rules is expensive," Kroes said. "We don't want talk and promises. We want compliance."

I wonder if the much-ballyhooed "interoperability" announcement and release of some binary specs is an attempt to avoid further fines, now that it appears they will continue to get bigger and bigger. The fines, I mean. Not Microsoft.  

Mark Zuckerberg is giving the keynote for SXSW Interactive in just under a month. He is, like Mr. Gates, a highly successful Harvard dropout. Most attendees will probably be listening to him with rapt attention. Personally, I don't care what he has to say because he's an idiot. If I do happen to see him, I'll probably have just one question to ask.