You are here November 2007
Submitted by Scott Cleland on Tue, 2007-11-13 13:27
The Big Government advocates who try to paint the U.S. as falling behind in broadband so they can justify an activist National Broadband Policy -- have a huge and embarassing hole in their argument -- the U.S. lead in wireless/mobile broadband, including U.S. leadership in transitioning prime analog TV spectrum to mainstream digital broadband use.
- The World Radio Conference of the UN, which is wrapping up this week in Berlin, indirectly showcases this U.S. lead in mobile broadband.
- Per the International Herald Tribune, the U.S. is way ahead of the rest of the world in transitioning analog broadcasters to digital and reallocating this best-available spectrum for mobile-broadband use --
- IHT: "The world is in varying stages in going digital, with U.S. broadcasters switching by 2009, Asian broadcasters by 2015, and most European countries somewhere in between."
- So how does being 2-6 years ahead of our international competitors in bringing the best available spectrum for mobile broadband to consumers -- constitute "falling behind" or "a failure of no national broadband policy?"
This U.S. world leadership in transitioning prime spectrum to optimal consumer use is powerful evidence of the superiority of our broadband policy approach, which embraces market forces more than just about any other major country in the world.
Submitted by Scott Cleland on Tue, 2007-11-13 20:26
EU antitrust authorities have launched a rare "in-depth investigation" of the Google-DoubleClick merger. What does this action mean?
First, in calling Google and DoubleClick "the leading providers" respectively of online advertising/intermediation services and ad serving technology, the EU has tipped its hand in its assessment of a central fact in the investigation that it views these two companies as #1 in the world in their specialties. This obviously troubles Google as they have portrayed DoubleClick as a minor player because of its smaller revenue base in the $300m range. The EU obviously did not buy that Google spin.
Second, the EU rejected Google's blanket assertion that "the parties' activities do not overlap" which is Google's fancy way of saying Google and DoubleClick are not competitors. Well the EU pointedly rejected that Google assertion of fact in stating: "The Commisssion will, in particular, investigate whether without this transaction, DoubleClick would have grown into an effective competitor of Google in the market for online ad intermediation." The obvious implication of this statement is that the EU does see Google and DoubleClick as competitors. And it has framed the question in a way that must trouble Google, which is that they are analyzing the merger through the lens of how competition would develop without this merger. hmmm
Submitted by Scott Cleland on Thu, 2007-11-15 10:59
Ironically, just as the EU is gearing up to conduct an "in-depth investigation" of the Google-DoubleClick merger, the FTC investigation is apparently wrapping up with a whimper. What accounts for this divergence in approaches to this merger review?
The first and obvious explanation is differences in the process and timing.
Submitted by Scott Cleland on Thu, 2007-11-15 18:45
A San Francisco Bay subscriber of Comcast, Jon Hart, has filed a lawsuit against Comcast, for interfering with his file sharing, prompted by the AP story that alleged "Comcast Blocks some traffic."
- Given that the AP was the first to file this story on its own story, (how convenient) it will be interesting to learn what ties, if any, Mr. Hart has to the AP reporter, or to the pressure groups behind the FCC petition, like Moveon.org's FreePress, Public Knowledge et al.
I doubt the court will waste much time on this lawsuit given that the normal avenue of recourse, in the appropriate governmental venue, is already being pursued by the petitioners at the FCC.
- Usually courts are more than busy enough -- than to look for time-consuming, complex, minutia-laden cases, when normal established procedure and process (and Supreme Court doctrine) provide the court an easy way to defer to the expert government agency empowered by Congress specifically to deal with this type of issue.
- Going immediately to court, and not waiting for FCC action, undermines Mr. Hart's case tremendously.
I guess that Mr. Hart and his lawyer are aware that this case will likely go nowhere, but viewed it as helpful to the "cause" -- since net neutrality pressure groups are in constant search of "news hooks" to push their net neutrality crusade.
Submitted by Scott Cleland on Fri, 2007-11-16 14:21
The WSJ article today: “Google has even bigger plans for mobile phones” appropriately addresses the big “open” question of whether Google is serious about becoming a wireless carrier, because if it is, it will need to bid and win substantial spectrum in the upcoming FCC 700 MHz spectrum auction.
The WSJ article states: “the behind-the-scenes moves illustrate just how serious the Internet giant is about trying to reshape the wireless world.” The evidence in favor of Google’s serious entry into wireless is significant, as Google:
Submitted by Scott Cleland on Mon, 2007-11-19 14:01
Have Penn State researchers stumbled upon a Google-DoubleClick anti-competitive smoking gun?
PCWorld flagged some very troubling new research findings pertinent to the FTC/EU reviews of the Google-DoubleClick merger by Penn State researchers in its article "Google Favored By Web Admins."
- Penn State researchers: "Web-site policy makers are playing favorites, and Google is the big beneficiary, say Penn State researchers."
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""We expected that robots.txt files would treat all search engines equally, or maybe disfavor certain obnoxious bots, so we were surprised to discover a strong correlation between the robots favored and the search engines' market share," said C. Lee Giles, the David Reese Professor of Information Sciences and Technology at Penn State who led the research team that developed BotSeer, in a statement."
Why is this significant?
Submitted by Scott Cleland on Mon, 2007-11-19 18:58
The top Senators overseeing Antitrust matters, Senate Antitrust Subcommittee Chairman Herb Kohl (D-WI) and Ranking Republican Member Orrin Hatch (R-UT), wrote a strong letter to the FTC urging serious scrutiny of the Google-DoubleClick merger. (see pasted copy of the letter at the bottom of this post.)
Having testified before their Senate Subcommittee in opposition to the merger September 27th, I was gratified to learn of the subcommitttee's serious bipartisan concern about the merger and also their very strong grasp of the potential anti-competitive issues arising from the merger.
There are three big takeaways from the letter.
First, the Subcommittee defines the relevant market as Internet advertising, "...combining these two companies' leading positions in these two forms of Internet advertising could cause significant harm to competition in the Internet advertising marketplace."
- The subcommittee has adopted the same market definition as opponents of the deal.
- Google had hoped the Subcommittee would, and still hopes the FTC and EU will, define the market as advertising overall.
- If the FTC agrees with their Senate overseers that the relevant market is the ~$20B Internet advertising market, and not the ~$300B overall advertising market, the merger is at higher risk of disapproval.
Second, the subcommittee has concluded Google has market power in Internet search, another key conclusion of opponents of the merger.
Submitted by Scott Cleland on Wed, 2007-11-21 11:23
According to PaidContent.org, Sanford Bernstein's Google analyst, Jeff Lindsay:
- "looks at some of the options available to Google, should the EU (or the FTC for that matter) ultimately come down against the acquisition. He lays out four scenarios: a) Forgo competing in the ad-exchange business. b) Purchase another player, possibly ValueClick. C) Build an in-house ad exchange. D) Form a JV, possibly with DoubleClick". (emphasis added)
The most important takeaway from this analysis is that Google and DoubleClick are obviously competitors in the natural and ongoing evolution of online advertising towards ad exchanges.
- Lindsey believes it would make most sense for Google to build its own ad exchange in house and that with Google's advantages, Google could get it up and runnning faster than it took Right Media or DoubleClick.
Given the Senate Antitrust subcommittee's concerns in their recent letter to the FTC on the merger:
- "Antitrust regulators need to be wary to guard against the creation of a powerful Internet conglomerate able to extend its market power in one market into adjacent markets, to the detriment of competition and consumers."
The challenge for the FTC in analyzing this dynamic market is to understand how it is changing and why.
Submitted by Scott Cleland on Fri, 2007-11-23 18:15
For those following Google's relentlessly increasing market share, Barrons Online has a succinct summary of ComScore's and Hitwise's latest numbers.
The numbers show why the Senate Antitrust Subcommittee believes Google has market power and why it believe the FTC should determine if Google can leverage its market power in search into other markets before approving the Google-DoubleClick merger.
Submitted by Scott Cleland on Fri, 2007-11-23 18:15
For those following Google's relentlessly increasing market share, Barrons Online has a succinct summary of ComScore's and Hitwise's latest numbers.
The numbers show why the Senate Antitrust Subcommittee believes Google has market power and why it believe the FTC should determine if Google can leverage its market power in search into other markets before approving the Google-DoubleClick merger.
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