Comcast Apparently Feels Qualified To Give Google Lectures On Monopoly Power

from the ill-communication dept

For several years the telecom sector has been quietly trying to spur additional regulation of Silicon Valley. Why? As giants like AT&T and Comcast increasingly push into the online advertising arena, they're keen on having competitors saddled with regulation, while they successfully eliminate oversight of their own problematic monopolies. Given the FCC (now headed by a former Verizon lawyer) just effectively neutered itself at telecom lobbyist behest while the DOJ (now headed by a former Verizon lawyer) goes the extra mile to vilify Facebook, you'd have to consider the gambit fairly successful so far.

To be clear, there are plenty of problems with Google, Facebook, Amazon, and other Silicon Valley giants that require attention and intelligent solutions by objective experts. And while a huge chunk of the animosity toward Silicon Valley giants is entirely genuine and well deserved, a lot of the "big tech" hyperventilation among lawmakers like (longtime AT&T ally) Marsha Blackburn is largely theatrical in nature and being driven by the telecom sector. Ferreting out which is which isn't easy, but looking at campaign contributions can certainly help.

The mainstream press, for its part, has been oddly unaware of how much of the animosity against "big tech" has been co-opted and amplified by telecom for what should be obviously selfish reasons. For example, telecom (hand in hand with Rupert Murdoch) has been making the rounds trying to suggest that Google's support of encrypted DNS somehow runs afoul of antitrust guidelines (it doesn't). And Reuters, for example, ran a story this week suggesting that Comcast had suddenly emerged as a "new antitrust foe" for Google, levying criticism at the company's ad business for the "first time":

"Comcast, one of America’s largest media and communications companies, is wading into the epic regulatory pile-on against big tech companies such as Google, according to people familiar with the matter...Comcast may be drawing a line in the sand and wants to avoid letting Google do to the video ad business what it has done to the online ad market. It is the first time one of the most powerful companies in the United States, with its own muscular lobbying apparatus in Washington, is taking sides in the antitrust battle looming over the world’s largest seller of online ads.

So for one thing, Comcast's efforts to push for a regulatory and antitrust crackdown of Google isn't "new." The cable industry's top lobbying organization, the NCTA (whose primary backer is Comcast) has been pushing for a crackdown on Silicon Valley for several years now. Former FCC boss Mike Powell, now the cable industry's top lobbyist, had this to say at an industry show in March of last year. Take special time to note how every criticism levied at Silicon Valley giants applies equally to telecom providers:

"Our governmental authorities need to get a handle on what kind of market power and harm flow from companies that have an unassailable hold on large pools of big data, which serve as barriers to entry, allowing them to dominate industries throughout the economy. For years, big tech companies have been extinguishing competitive threats by buying or crushing promising new technologies just as they were emerging. They dominate their core business, and rarely have to foreclose competition by buying their peers. Competition policy must scrutinize more rigorously deals that allow dominant platforms to kill competitive technologies in the cradle."

While there's plenty of individuals, groups, and companies that can provide helpful insight on the problems in "big tech," Comcast isn't among them. In large part because it's guilty of nearly all of the criticisms it levies at Google. After convincing the FCC to effectively neuter itself recently, Comcast has been enjoying a growing broadband monopoly across huge swaths of the country as the nation's telcos give up on upgrading aging DSL networks. Comcast then uses that monopoly to jack up prices, erect arbitrary barriers for competitors, and stifle emerging technologies (like better cable boxes).

And while Comcast tries to get DC lawmakers to impose all manner of new restrictions on Google, with its other hand it has successfully convinced DC (and a lot of policy folks who should know better) to ignore the problems with telecom entirely. Comcast has largely been criticizing Google via its advertising subsidiary Freewheel, and via its policy and lobbying extension organizations, while leaning on politicians like Marsha Blackburn whose sudden, breathless concern about tech monopolies mysteriously omits some of tech's worst offenders: telecom providers.

Yes, countless experts have noted for a decade than US antitrust enforcement has grown toothless and frail, and our definitions of monopoly power need updating in the Amazon era. Facebook's repeated face plants on privacy (and basic transparency and integrity) have only added fuel to the fire amidst calls to regulate "big tech." That said, if we're looking for expert insight into the genuine problems posed by "big tech," maybe skip taking advice from natural telecom monopolies whose only real motivation here is to elbow in on Silicon Valley advertising revenues while saddling competitors with layers of new regulation.

Filed Under: antitrust, broadband, dominance, hypocrisy, internet, monopoly power
Companies: comcast, google

Elizabeth Warren Wants Congress To Be Smarter About Tech... While Grossly Overstating Google & Facebook's Market Power

from the let's-start-at-home dept

So, this is good! Elizabeth Warren has announced that she supports bringing back the Office of Technology Assessment.

My anti-corruption plan reinstates and modernizes the Congressional Office of Technology Assessment (OTA), strengthens congressional support agencies, and transitions congressional staffers to competitive salaries so that Congress can act based on the best expertise and information available.

[....]

Reinstate and modernize the Office of Technology Assessment. The OTA was originally led by a bipartisan group of lawmakers, with votes divided evenly between Democrats and Republicans. The new OTA should be led by a single, independent director to ensure that increased partisanship does not prevent members of Congress from receiving the information they need. The OTA should also have the authority to self-commission reports and be equipped to respond to short-term requests from Members, such as preparing for hearings, writing regulatory letters, and weighing in on agency rulemaking, rather than largely limiting its efforts to lengthy long-term reports. And the OTA should have in-house experts on interdisciplinary issue areas so that it can provide information and analysis on issues like climate change and technology consolidation that do not fit within a single issue area.

That all looks good. Indeed, we've been calling for Congress to reinstate and modernize the Office of Technology Assessment for many, many years, so it's good to see Warren apparently on board with this plan (though I'll note that she does not appear to be a co-sponsor of an existing bill to help modernize the OTA.

She frames it, somewhat accurately, as a way to get beyond Congress relying on lobbyists and those with dodgy information. And that would be a good thing. But it does seem a bit ironic that the same day she puts out this plan about no longer having tech policy driven by dodgy one-sided information, Alec Stapp gave a detailed explanation of how Warren, herself, was basing a key claim for why Google and Facebook should be broken up on very, very dodgy information.

A big part of Warren's argument was that Google and Facebook are so dominant on the internet today, that they basically control the flow of information. She claimed that 70% of all traffic went through those two companies.

More than 70% of all Internet traffic goes through sites owned or operated by Google or Facebook.

Stapp decided to dig into that number and found... that while the data is not clear, it's likely to actually be less than 20%. That's a pretty damn big difference. Like we've seen in other studies where "big" stats are extrapolated from a single report that doesn't cover what people pretend it covers and are limited by small sample sizes or not representative samples, the same thing seems to have happened here.

And, like those other studies, this one involves a game of telephone as well. The number appears to come from a study from a web analytics company, Parse.ly, from 2015, looking at traffic sent to just 400 news publishers. This is not a random sample. That study showed that Facebook sent 39% of the traffic to the publishers in the sample while Google sent 34%. That was picked up on by a freelance blogger who posted a story on his own website claiming "GOOG and FB now have direct influence over 70%+ of internet traffic" which is not at all what the Parse.ly study meant or implied. From there, bastion of fact checking, Newsweek, wrote a piece about who controls the internet and cites the freelancer's blog. And that brings us back around to Warren, who cites the Newsweek piece.

Voila. A fake statistic laundered through four sources.

Stapp then uses Sandvine's much more thorough research to suggest that perhaps Google and Facebook drive a bit less than 20% of internet traffic.

As for Google and Facebook? The report found that Google-operated sites receive 12.00 percent of total internet traffic while Facebook-controlled sites receive 7.79 percent. In other words, less than 20 percent of all Internet traffic goes through sites owned or operated by Google or Facebook. While this statistic may be less eye-popping than the one trumpeted by Warren and other antitrust activists, it does have the virtue of being true.

So, yes, it would be good if tech policy was based on more realistic information -- and bringing back the OTA would be great. Then, perhaps, Elizabeth Warren wouldn't also be relying on dodgy stats passed around through bad reporting.

Filed Under: congress, elizabeth warren, monopoly power, ota
Companies: facebook, google

Nielsen Using Patent Monopolies To Act Like A Monopolist

from the seems-a-bit-questionable dept

For many years, we've highlighted how patents are monopolies and they provide monopolistic power. Indeed, the founders of the US recognized this. James Madison was quite skeptical:

"But grants of this sort can be justified in very peculiar cases only, if at all; the danger being very great that the good resulting from the operation of the monopoly, will be overbalanced by the evil effect of the precedent; and it being not impossible that the monopoly itself, in its original operation, may produce more evil than good."

Jefferson was similarly dubious of the need for patents:

... generally speaking, other nations have thought that these monopolies produce more embarrassment than advantage to society; and it may be observed that the nations which refuse monopolies of invention, are as fruitful as England in new and useful devices.

Eventually, Jefferson was convinced to support such a system -- and even reluctantly ran it for a while -- but he did so with great concern about how these "monopolies" could hinder actual innovation.

Fast forward a couple centuries, and let's look at the case of Nielsen. You know, the company that "measures" freaking everything. Once synonymous with television ratings and "Nielsen homes," it has expanded into other entertainment measuring markets over time -- and has certainly had something resembling a monopoly during much of that period -- and it has often used patents to retain that monopoly. And this goes back a very, very long time.

In the 1940s, Nielsen worried about a competitor taking away its "exclusive" market and used patents to kill it off:

The challenge to Nielsen's meter monopoly was too real to be taken lightly. Charles Wolcott, a top executive of A.C. Nielsen wrote to Mr. Nielsen: "I fail to see how we can turn our backs on the possibility that RADOX could complicate our situation--that is, if RADOX continues to develop, we are no longer exclusively the proud possessors of measurement by electronic means." It did not take Nielsen long to move. RADOX was vulnerable on two fronts--patent and finance--and each front was quickly attacked. Regarding patents, it turned out that both parties had patents pending, and the U.S. Patent Office ultimately declared "interference" existed. Nielsen's major thrust, Sindlinger maintained, was to use the cloudy patent situation to chill the interest of the investor group in any financing help for RADOX.

Years later, Nielsen's son more or less admitted that his father talked investors out of supporting Sindlinger and the RADOX system:

A man by the name of Ralph Bard Sr. who lived in Chicago and had been Secretary of the Navy called on my father. He was considering investing in Sindlinger’s operation and asked my father for his opinion of the company. My father wrote him a letter concluding that Sindlinger’s device would not be a success. In short, in my father’s opinion, this would not prove to be a good business.

A little over a decade later, the FTC actually had to go after Nielsen for using its patents to pressure competitor Arbitron, leading to a consent decree:

A patent infringement suit brought by Nielsen also arguably deflected ARB from competing head-to-head with Nielsen in network television ratings with its Arbitron instantaneous audience measurement system in the late 1950s. More recently, to deal with measurement of cross-platform viewing, Nielsen has used acquisition to build its intellectual property portfolio and continues to use litigation to slow down its competitors.

While the outcome of patent disputes may be uncertain, litigation or licensing undertaken to protect and/or monetize patents does not itself present unusual legal reisk to the patent holder. Such risk does adhere, however, if the patent was fraudulently acquired or was leveraged to extend beyond its rightful metes and bounds. The FTC found Nielsen guilty of such misconduct leading to a 1963 consent decree. Two of Nielsen's business practices that violated the FTC Act were (1) the systematic use of patent proceedings "to discourage potential and actual competitors from developing and using... devices for... measuring... audiences... and has attempted to impede and sabotage the financing of these competitive efforts.

So what does something that happened more than 50 years ago have to do with today? It appears that Nielsen has continued to leverage this particular playbook. First, Nielsen freely admits that it holds a monopoly in the ratings game:

Neither party disputes that Nielsen exercises monopoly power over the television audience measurement services industry, both nationally, for the United States as a whole, and for 210 local markets

And it's still using patent claims to stifle competition. Back in 2016, Nielsen bought Gracenote for $560 million just three years after it had been sold for $170 million. Just what could have represented so much value for Nielsen? Well, just a couple months before Nielsen bought Gracenote, Gracenote had sued a company called Sorenson Media for patent infringement. Sorenson Media had an "automatic content recognition" ACR platform for measuring viewers of TV broadcasting -- exactly the market Nielsen wishes to maintain its monopoly over.

How did that turn out? Well, Sorenson declared bankruptcy last fall (in large part due to an incredibly stupid contract it had signed), but I'm sure the cost of a patent lawsuit didn't help. Oh, and in February, Nielsen bought up Sorenson's assets at firesale prices.

And that's not all. Last year another small competitor, ErinMedia, sued Nielsen, claiming antitrust violations and that Nielsen was using "predatory practices designed to prevent competitive entry by companies like ErinMedia." A few weeks later, the company announced that it was effectively shutting down, noting that Nielsen had "chilled" its ability to close an investment round.

Oh, and remember Arbitron? The company that was at issue back in the 1960s? Nielsen bought them a few years back, leading the FTC to put some conditions on the deal in hopes that it would not "substantially lessen competition." So far that doesn't seem to be working.

And that brings us to the latest Nielsen use of patents against an upstart competitor. Last fall, Nielsen sued upstart competitor Samba TV, claiming patent infringement. The patents at issue -- 9,066,114, 9,479,831 and 9,407,962 -- all are incredibly vague and generic, and appear to be the kind of patents that aren't supposed to be allowed in a post-Alice world.

As Samba notes in its motion to dismiss, nothing here should have been patented in the first place:

For centuries, families and friends have gathered for plays and concerts—and more recently, for television and radio programming. Most silently observe. But others, often because they are already familiar with the programming, offer commentary: about the director, the actors, or the scenes. Some react to the content in order to enhance it: a lawyer presenting an animation typically offers comments at preplanned moments; or a theater employee may need to adjust lighting or curtains at the conclusion of certain scenes. The process of recognizing parts of a video, song, or other content and reacting—either instantly or at a later time (e.g., during a commercial break)—is not patentable. It is an abstract concept involving the three main stages of memory: processing, storage, and retrieval. Alice Corp. Pty. v. CLS Bank Int’l, 134 S. Ct. 2347, 2356 (2014) (a “method of organizing human activity” is not eligible for patenting).

Gracenote’s patents claim abstract concepts without contributing any new inventive technology to achieve them. Instead, the claims merely use existing technologies—technologies Gracenote does not even claim to have invented—as tools to carry out the concepts. The ’114, ’831, and ’962 patent claims use identifiers, called fingerprints, to recognize portions of audio or video signals and trigger responsive actions at predetermined times during the playback, such as providing information about a scene at its conclusion. The patents, however, do not purport to have invented fingerprints or even an improved fingerprinting technique. Using known fingerprinting technology as a tool to perform the abstract concept of signal recognition and reaction is patent-ineligible under 35 U.S.C. § 101.1

And yet, whether or not the court recognizes this and throws out the case, this lawsuit still might be effective in basically stifling a competitor's ability to even exist in the market. As James Madison once warned: "the monopoly itself, in its original operation, may produce more evil than good."

Filed Under: antitrust, arc, ftc, monopoly power, patents, tv tracking
Companies: arbitron, erinmedia, gracenote, nielsen, samba tv, sorenson

Quantifying Comcast's Monopoly Power

from the merger-scrutiny dept

Comcast is a monopoly. The question is, how much of a monopoly is Comcast, and how much of a monopoly will it be after it absorbs Time-Warner Cable (TWC)?

To help quantify market influence, economists use the Herfindahl–Hirschman Index (HHI), a metric that is calculated by adding the squares of the market shares of every firm in an industry. HHI produces a number between 0 (for a perfectly competitive industry) and 10,000 (for an industry with just one firm).

Using HHI, antitrust law puts markets into three categories:

• Unconcentrated Markets: HHI below 1500
• Moderately Concentrated Markets: HHI between 1500 and 2500
• Highly Concentrated Markets: HHI above 2500

For HHI calculations, the question becomes: a percentage of what market? Discussions of the Comcast-TWC merger have often noted companies' shares of both the broadband and cable TV markets are comparable. Although their market shares in Internet and TV are similar, the difference in importance between the two markets cannot be overstated. Residential broadband is how every person reaches the Internet. In time, the Internet will become the way to reach almost all content.

By contrast, cable television is close to being an anachronism. Companies like Netflix, Amazon and YouTube (Google) already provide most of what cable television offers. In addition, new technology—Internet technology—allows much greater flexibility in the content consumers choose. Consumers do not need to subscribe to individual channels or watch advertisements—at least not to the extent they used to.

Because of how important the Internet is, the Comcast-TWC merger is primarily about broadband, not cable television. So the question is, what share of the high-speed Internet service will Comcast have? According to Free Press, Comcast-TWC would have 47% of truly high-speed broadband service. This figure is extremely conservative. It ignores that the Comcast-Verizon duopoly has many methods at its disposal—most importantly, dividing up geographic markets ("I'll take Philadelphia, you take New York") and dividing up entire industries ("I'll take residential broadband, you take wireless").

Comcast's CEO has admitted that Verizon FiOS is Comcast/Time-Warner's only competitor in high-speed Internet service. And, Comcast has admitted that it has 40% of the high-speed broadband market. Comcast-TWC would have a subscriber base that reached 70 million, and, according to CableTV.com, Comcast-TWC service would be available to 70% of the United States. According to WSJ, More than 61% of consumers would have one cable company serving them.

These figures do not take into account regional dominance, which means that they dramatically underestimate the limited consumer choice and market consolidation across industries. Competition (or lack thereof) in geographic markets is extremely significant. Here, by Comcast's own admission, pre-merger Comcast and Time-Warner did not compete in any markets.

In addition, Comcast's national market share does not take into account market share in related markets—which present additional anticompetitive harms, but are not factored into the HHI calculation. For Comcast, its market share ignores its interest in Hulu, NBC Universal, and other content industries. In addition, Comcast ties its high-speed broadband connections to cable television and landline phone service—another factor not taken into account in the HHI calculation.

Recall that markets with a Herfindahl–Hirschman Index (HHI) between 1500 and 2500 are problematic; above that, the market is consolidated. Therefore, Comcast's admission of 40% market share automatically puts the Internet service market into the middle category of a "moderately concentrated" industry. In other words, without factoring in the market share of Comcast's competitors, and using Comcast's own figure, there is still limited competition in high-speed Internet service.

This market share calculation also ignores the effect of dominating local markets, the tying of television and phone service, and the business interest in competing content industries. In short, a raw calculation of market share ignores market power.

Comcast has argued that—regardless of the competitive landscape in Internet service and cable television—the merger will not result in "merger-specific" harm. That is, the Internet may already be monopolized, but allowing it to acquire Time-Warner Cable will not make it any worse.

When analyzing merger-specific harm, antitrust law puts substantial weight on whether a "significant" competitor will be eliminated and how the merger will affect market concentration:

Mergers resulting in highly concentrated markets that involve an increase in the HHI of between 100 points and 200 points potentially raise significant competitive concerns and often warrant scrutiny. Mergers resulting in highly concentrated markets that involve an increase in the HHI of more than 200 points will be presumed to be likely to enhance market power. The presumption may be rebutted by persuasive evidence showing that the merger is unlikely to enhance market power.

According to conservative estimates, Time-Warner has about 13% of broadband customers in the U.S. That means that the increase in HHI resulting from the merger is 169 points. According to the Merger Guidelines, Comcast's acquisition of Time-Warner Cable would "raise significant competitive concerns and warrant scrutiny," even if Comcast didn't have dominant market share (which it does). Scrutiny of the deal reveals that Comcast-TWC would have significant leverage in other industries: cable television, content (such as sports), and phone service.

Acquisitions involving a firm with a majority stake are almost always anti-competitive, because, by definition, they occur in a concentrated industry and result in the largest firm gaining market share. When a merger between smaller competitors occurs, it is less likely to be anti-competitive. The best examples of this distinction between dominant-firm acquisitions and non-dominant firm mergers are the Comcast-TWC, Sprint-T-Mobile, and AT&T-DirecTV transactions.

Comcast and Time-Warner are the two largest firms in both residential internet service and cable television. By contrast, Sprint and T-Mobile are second-tier competitors, with the third and fourth highest market share in the mobile market, respectively. And the proposed consolidation of AT&T-DirecTV, like the Sprint-T-Mobile transaction, does not result in the elimination of a significant competitor; rather, it unites companies that primarily operate in different, though related, industries.

The AT&T and Sprint transactions still require scrutiny. With AT&T and DirecTV, there is a concern that AT&T will leverage its position in the wireless and broadband industries to expand DirecTV's U-verse video service. And, Sprint's acquisition of T-Mobile has raised concerns that consumers will see higher cell phone bills because T-Mobile will stop undercutting prices and paying to buy out its customers' contracts. Still, because AT&T and Sprint do not have market power across multiple markets, the acquisitions of those companies pose a lesser threat to consumers.

By contrast, a Comcast-TWC transaction unites companies that dominate across multiple markets. A more liberal, and perhaps more accurate, way to calculate Comcast-TWC's market share is to reverse-engineer it by subtracting its competitors' share from 100. Susan Crawford, citing Verizon, calculates that FiOS serves 14% of the country. Tim Wu calculated that Verizon FiOS has 8% market share (Google Fiber has 1%). (Crawford and Wu may both have calculated accurate figures. Crawford was calculating "coverage" or "service" area; Wu was calculating actual subscribers.)

Comcast and Time-Warner's combined market share in the extremely important Internet service market could be 75% or more. Comcast's competitors may have less than 10%, depending on how you define "high-speed" broadband. It doesn't take a mathematician or an antitrust scholar to know that consumers are losing. In sum, a straightforward application of antitrust law says the merger is in a highly concentrated market posing an extraordinary danger to consumers.

Filed Under: broadband, monopoly, monopoly power
Companies: comcast, time warner

Interconnection: Or How Big Broadband Kills Net Neutrality Without Violating 'Net Neutrality'

from the routing-around-the-problem dept

For years now, every time the net neutrality debate starts getting really confusing, Tim Lee comes along and puts it all into useful perspective. Six years ago, there was his exceptionally useful position paper on net neutrality for the Cato Institute. A couple years ago, he wrote another great piece for National Affairs magazine that deftly explained why the internet wasn't competitive and why that's a problem. Now working for Vox, he's put together a great piece that explains the technical difference between the interconnection fights and the net neutrality battle -- but also explains how the end result is basically the same.

There has certainly been plenty of discussion about Netflix's recent interconnection deals -- starting with Comcast back in February, and Verizon just recently. As we noted back in February about the Comcast/Netflix deal, it wasn't really a net neutrality issue, because it was about interconnection, but we were equally worried about how this really demonstrated the monopsony power of major broadband providers. Lee's latest Vox piece dives much deeper into that distinction, and highlights some key insights:

1. These are not technically "net neutrality" violations. The animated graphics in the Vox piece do a great job explaining why. Just go look.
2. But that might not matter, because the end result is basically the same.
3. Because of that, this is a really effective way for the big broadband providers to pay lip service to net neutrality, while getting exactly what they want anyway.
4. The real problem, as always, is too much market power by the big broadband players, allowing them to do an "evil" thing almost no one thought they would do.

To explain the first point, you basically have to recognize that with the interconnection issue, Comcast and others aren't technically "favoring" Netflix (or anyone) on their own network, but are rather setting up deals that favor that content off their network, but right up until it hits the last mile. And they're doing this by purposely letting their connection to other transit providers pile up. And that's why the end result is the same, but allows Comcast to technically be correct that they're not violating net neutrality, while creating the identical end result for most of the major players:

Comcast says it wasn't deliberately degrading the performance of Netflix traffic, which would have been a violation of network neutrality. But that implies that every website that used the same transit provider as Netflix was experiencing similar performance problems. That's obviously bad for Comcast customers, and it's also bad for startups that are trying to become the next YouTube or Netflix. If the only way to get excellent service on America's largest broadband networks is to negotiate a private connection directly to those networks, smaller companies with less cash and fewer lawyers are going to be at a competitive disadvantage.

In other words, those public transit links that were providing Netflix with subpar service could become the de facto slow lanes on Comcast's network, while private, direct connections could become the fast lane.

It's a neat trick. Comcast doesn't have to favor or disfavor any particular traffic. It just conveniently neglects to do the most basic things to make sure traffic flows smoothly from the various transit players -- and then offers to negotiate direct deals with big players to bypass third-party transit providers. Thus, it's not "favoring" anyone on its network. It's just creating a situation that favors those who pay up to access its network.

And, again, the FCC doesn't seem to recognize this at all. Tom Wheeler has been fairly explicit that he doesn't view the interconnection issue as relevant to this discussion yet. And the various rules that are being fought over won't have any impact one way or the other on interconnection. And, as Lee's article describes, part of the reason all the commotion has been focused "over there" on "net neutrality" rather than "over here" on "interconnection" is because the very idea of Comcast doing what Comcast has been doing these past few years just seemed impossible to consider not too long ago:

One reason for this is that Comcast's hardball tactics are relatively new. According to Wu, "we never thought much about" interconnection issues when the concept of network neutrality was developed in 2002. That was "mainly because it seemed like, 'Why would anyone do that?'" It was generally assumed that consumer ISPs would always buy enough transit to serve their customers' needs.

Wu worked in Silicon Valley prior to 2002. And he says he remembers that "solving a joint technical challenge" — that is, making the internet work as well as possible — "was the predominant motivation of the engineers." That's still true in most parts of the internet. But some of the largest ISPs now seem to view declining network performance not as a technical problem to be solved so much as a source of leverage in business negotiations.

That last line is worth repeating: Big ISPs view declining network performance as a source of leverage, rather than a technical problem.

And the only reason they can do this is because of the tremendous market power they have. And, once again, as we've argued for over a decade, that demonstrates the real heart of the problem: the lack of real competition in the broadband space. Either way, it's yet another must read if you're trying to understand the state of play today.

Filed Under: broadband, fast lanes, interconnection, monopoly power, net neutrality, power
Companies: cogent, comcast, level 3, netflix

Is Bell Canada Going To Purposely Screw Up GPS Signals To Harm Competitors?

from the get-lost dept

It's good to have market power, apparently. Remember how Bell Canada started throttle bandwidth to its reseller partners without telling them? And then told them to shut up and take it when they complained? Oh, right, and then tried launching its own video download store just as it was making it more difficult for anyone else's to work? Apparently, the company may be doing that again... Michael Geist points us to reports that Bell Canada is looking to purposely degrade the GPS signal on certain Blackberrys for anyone using third party mapping programs, such as Google's. However (wouldn't you know it?), Bell is promising to allow the GPS to work properly if you pay the company $10/month and use Bell's own mapping solution.

Filed Under: canada, competition, gps, monopoly power
Companies: bell canada