Category Archives: Duopoly

Crack Google?

robberbarons.jpg Cringely gets anxious over Google’s floor bid for 700Mhz. After pointing out that Verizon and AT&T coming around to Kevin Martin’s leaked counterproposal of watered down “open access” rules, he says:
Look who Google is up against — all the largest Internet service providers in the U.S. Google will not win this even if they win the auction, because the telcos and cable companies are far more skilled and cunning when it comes to lobbying and controlling politicians than Google can ever hope to be. The telcos have spent more than a century at this game and Google hasn’t even been in it for a decade. And Google’s pockets are no deeper than those of the other potential bidders.

— Is Google on Crack?: Eric Schmidt bets the ranch on wireless spectrum, Robert X. Cringely, Pulpit, 27 July 2007

Cringely is missing the point about who Google is up against. These outfits have not been the largest ISPs for more than a century. They’ve been telephone companies for more than a century. And being around for a long time isn’t necessarily a sure win. Look at the Vatican; it’s been around for two thousand years, and it’s managed to lose most of its traditional heartland of Europe. Sure, Google is fragile, in some senses even more fragile than Microsoft, as Cringely points out. But even Microsoft is losing market share from IE to an open source browser, Firefox. Google, as a proponent of open source that actually understands it, has a fair chance here. The incumbent duopoly telcos aren’t really in the Internet business; Google is.

Maybe Cringely’s right that Google alone couldn’t win the auction. But Google and Sprint possibly could. Sure, Sprint is a phone company, too. But that doesn’t mean it’s going to side with the rest if it scents profit. Maybe with a little help from Apple.

Let’s hope that’s what Google is really up to, rather than expecting to get Martin to change the rules and then wait for AT&T to deliver another striped bass.

I also don’t think Cringely is taking into account the stakes here. Continue reading →

Internet Robber Barons

krugman_paul.jpg Paul Krugman examines how far behind the U.S. is in every metric of Internet speed and broadband uptake, and why:
What happened to America’s Internet lead? Bad policy. Specifically, the United States made the same mistake in Internet policy that California made in energy policy: it forgot — or was persuaded by special interests to ignore — the reality that sometimes you can’t have effective market competition without effective regulation.

You see, the world may look flat once you’re in cyberspace — but to get there you need to go through a narrow passageway, down your phone line or down your TV cable. And if the companies controlling these passageways can behave like the robber barons of yore, levying whatever tolls they like on those who pass by, commerce suffers.

— The French Connections, Paul Krugman, New York Times, 22 July 2007

Krugman reminds us that as recently as 2001 the U.S. was far ahead. And then he gets specific. Continue reading →

The Internet As a Market: Al Gore and Reasoned Discourse

al-gore.jpg So I’ve been wondering what to say about Al Gore’s book, The Assault on Reason. A story in The Economist helped me out. After lauding Gore for calling Mr. Bush’s risky schemes well before most people, for denouncing the invasion of Iraq back in 2002, for his Oscar, and for being “the man who changed the climate of opinion climate change”, it then ridicules the book’s core thesis:
But he does not stop there. He worries about America’s money-saturated politics. He lambasts television for infantilising the electorate.

…

He sometimes comes across as eccentric—as when he lambasts television for killing public discourse, then celebrates the internet as its potential saviour. A few minutes online, reading the zealots on either the right or the left, should have been enough to explode that illusion.

— Gore in the balance, From The Economist print edition, May 31st 2007

That last would appear to be the sort of trivialized, perhaps even infantilized, reaction Gore is lamenting. The big advantage of the Internet is you get not just a few zealots at extreme ends of an arbitrary spectrum: you get all the shadings and colors and depth you can absorb. And you can weave your own strands in this home-made tapestry. Continue reading →

Internet Radio: DRM Air

wexelblat.jpg Previously we saw a last-minute reprieve for Internet Radio. I read SoundExchange’s press release, but I didn’t catch this:
Under the new proposal, to be implemented by remand to the CRJs, SoundExchange has offered to cap the $500 per channel minimum fee at $50,000 per year for webcasters who agree to provide more detailed reporting of the music that they play and work to stop users from engaging in “streamripping” ­ turning Internet radio performances into a digital music library.

— SoundExchange Confirms Minimum Fee Offer: Reminds Commercial Webcasters of Obligations to Pay New Royalty Rates, Press Release, SoundExchange, 13 July 2007

Alan Wexelblat explains that part about “streamripping”:
So it’s that simple. Become our agents in preventing people from recording Web radio streams or face the financial axe.

— When is a Reprieve Not a Reprieve, by Alan Wexelblat , Copyfight, July 19, 2007

Continue reading →

TV4U? Not Me!

soglin.gif Franchise reform, if you don’t have enough supporters, apparently you can just write their names in anyway:
At a Capitol press conference, several others leading the fight against the bill — including former Madison Mayor Paul Soglin and communications professor Cynthia Laitman — said their names also falsely showed up as supporters of the deregulation bill on petitions given lawmakers by TV4Us, the private group leading the ad and public relations push for the bill.

“I don’t know how it happened,” said Soglin, who said he has pushed for tight municipal controls and consumer protections over the cable TV industry since 1971. “AT&T gets very confused.”

— Legislators seek probe of misuse of names, By Steven Walters, Milwaukee Journal Sentinel, WEDNESDAY, July 11, 2007, 11:15 a.m.

How confused? Continue reading →

Market Failure?

bruegel_babel2_grt.jpg Here’s an interesting directive from the White House:
The order requires federal officials to show that private companies, people or institutions failed to address a problem before agencies can write regulations to tackle it. It also gives political appointees greater authority over how the regulations are written.

— House Balks at Bush Order for New Powers, By Jim Abrams, The Associated Press Tuesday, July 3, 2007; 8:16 PM

How does this work?

Continue reading →

Broadband Produces Employment

crandall.jpg
lehr.jpg
Litan.jpg
Many have assumed that broadband is good for the economy; now here’s a study with rivets:
More specifically, for every one percentage point increase in broadband penetration in a state, employment is projected to increase by 0.2 to 0.3 percent per year.

— The Effects of Broadband Deployment on Output and Employment: A Cross-sectional Analysis of U.S. Data, By Robert Crandall, William Lehr and Robert Litan, Brookings Institution, 2007

Of course, this is like saying every state in medieval Germany that had a printing press produced employment in the printing industry. There are economic and social effects far beyond mere employment. What should be done?

The paper has a few recommendations:

The surest route to lower prices is provided by increasing competition in the delivery of broadband services.
Continue reading →

The Tree of Liberty

On this day in the United States we celebrate the Declaration of Independence with
Pomp and Parade, with Shews, Games, Sports, Guns, Bells, Bonfire and Illuminations
as John Adams recommended in 1776.

The Declaration laid out a “a long train of abuses and usurpations” and referred to “certain unalienable Rights”, which the former colonials went on to spell out in a written Constitution (the oldest in the world today) to which they added a Bill of Rights. Is their work done? Continue reading →

A FiOS Way

thomas_t.jpg Verizon has a policy blog. It’s been around for most of a year now:
I’ll leave clever humor comparing this blog’s name with the terminology for amphibious offspring to others, yet in one sense the comparison is appropriate. “PoliBlog” is very much a site in its infancy, and none of us here at Verizon is sure how it will evolve. But evolve it will.

The intent of PoliBlog is to present perspectives on issues of importance that intersect public policy, politics, markets, and business in the broadband world. That’s a big pool to swim in, and it reflects the constantly changing world we live in.

—, Welcome Aboard, by Tom Tauke, PolicyBlog, October 02, 2006

I have to give them points for seeing it as an emergent communication method including their point of view, rather than just dictating talking points.So far, they seem to be sticking to that. And they’re getting some interesting comments, pro and con. But let’s look outside their blog box a bit. Continue reading →

FTC: What, Me Worry?

majoras.jpg The U.S. Federal Trade Commission (FTC) says there’s no need for net neutrality:
FTC Chairwoman Deborah Platt Majoras said that without evidence of “market failure or demonstrated consumer harm, policy makers should be particularly hesitant to enact new regulation in this area.”
So in a “market” where the average customer has at most two choices, we’re supposed to wait for a market failure? Continue reading →