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A Washington Post tech columnist says the proposed XM-Sirius deal would be bad for consumers because it would undercut competition. The two satellite radio providers are, he says, the only real competition against terrestrial radio because radio over wireless data services isn't up to snuff. But consider this: Total # of Sirius and XM subscribers: 12.5 million Total # of iPods sold: 88 million As a former satellite radio subscriber who now listens to radio podcasts on his iPod, I wonder whether the Post's tech columnist isn't a couple years behind the times.
In the case of satellite radio, more is at stake than the number of channels beamed down from orbit. Competition pushed Washington-based XM and New York-based Sirius to come up with innovations in pricing (Sirius's $500 lifetime subscription fee) and products (XM's Mini-Tuner plug-in module, which lets you use one account with multiple receivers). A merger undercuts the need for further innovation.
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Richard Bennett explains why "net neutrality" would be a step backwards for the deployment of innovative network services. He also makes the point that, so far as we know, it's basically unneeded.
In the name of opening up the Internet for big content, the 'Net Neutrality' bills criminalize good network management and business practices. Why can't we have more than one service class on the Internet?... If we're honest, we don't know how to regulate the internet at a technical level. But we should stop pretending it's a telephone network, and see how it handles packets. The 'net neutrality' lobby is saying all packets are equal - but that's unsound and even inconsistent with common carrier law. There's nothing to stop a transport offering different service levels for different prices. They all seem to be worried that ISPs have secret plan to sell top rank - to pick a search engine that loads faster than anyone else's. But it's not clear that a), anyone has done that; b), that it's technically achievable; or c) that it is necessarily abusive; or d) that their customers would stand for it.
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Very interesting. Jack Schaefer calls for an end to the FCC. Feasible? Looks like it. Politically practicable? We're not so confident.
Technology alone can't bring the spectrum feast to entrepreneurs and consumers. More capitalism—not less—charts the path to abundance. Hazlett and others, going back to economist Ronald H. Coase in 1959, have advocated the establishment of spectrum property rights and would leave it to the market to reallocate the airwaves to the highest bidders. Such a price system would tend to encourage the further expansion of spectrum capacity. Owners would be allowed to repurpose the spectrum they owned—using, say, AM radio frequencies to carry pictures—as long as they didn't interfere with the spectrum of others. Companies in control of spectrum would even be free to subdivide their frequencies and rent it out to customers by the minute for the broadcast and reception of data.
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In the regulatory world, telephones and cable are often considered separate industries, and this assumption informs the limits placed upon them. The "net neutrality" debate, for example, focuses unduly on telecoms firms without considering other IP-service providers. But when markets turn out to be more competitive than imagined, extra regulation does more to raise prices and reduce flexibility and innovation than to help consumers. As the Journal reports (quoted below), cable and phone companies, among others, are engaged in a major war, with many large skirmishes, to out-compete one another by providing customers with the services they want at good prices. (War is not exactly the right metaphor because probably none will win decisively.) Whether a provider uses a coaxial cable, twisted pair, or some other wire or transmission medium matters less than ever before. It just doesn't make sense to assume that these players aren't in the same market; if any of them acted that way, they'd be out of business in a flash. What makes things like "net neutrality" so frustrating is that its proponents have such a simple view of markets, market boundaries, and the nature of competition. Maybe that made sense under Ma Bell, two decades ago. But boundaries are breaking down, and these old assumptions--e.g., that a government-sanctioned monopoly phone company owns and dominates the only wire into the house--need to be swept away because they no longer apply.
Operators such as Cablevision and Time Warner Inc., using networks originally designed for transmitting television signals, are making major pushes to offer packages of phone, TV and high-speed Internet service to small and midsize businesses, often undercutting local phone companies' prices. Comcast Corp., the country's largest cable operator by number of subscribers, says offering services geared to small and midsize businesses will be its top new priority of 2007 and 2008. Telecom companies sell all business customers about $115 billion of services annually, but most cable operators have their eye on businesses with one to 100 employees, currently a $25 billion market, cable executives say. Cable operators are hopeful they can carve out as much as a 20% market share partly by convincing business owners who take broadband service at home that it will work just as well, and for less money, at their offices. They claim they can do this with discount pricing and better service, although phone company executives have started to improve their own offerings to counter the threat.
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Expect the "media consolidation" loonies to come out of the woodwork on this one. But as the article notes, Sirius and XM face great competitive challenges that extend far beyond the satellite radio market. Also: - Satellite radio is a consumer option that didn't even exist a few years ago so having it at all still broadens the market for consumers' listening attention;
- The alternative may be one or the other exiting permanently--in other words, a somewhat worse result for consumers than a merger;
- Satellite radio is hardly an essential service that requires extensive government regulation; if it didn't exist at all, consumers would be worse off, but not in a way that would demand public action; and
- Economies of scale are likely for a variety of reasons; because the market for listener attention is so broad, these economies would likely lead to lower prices on satellite radios and satellite radio service.
Whatever happens, the FCC and DOJ should keep their hands off for the benefit of us all--except, of course, satellite radio's competitors, like terrestrial radio stations.
Winning approval for any deal, from both the FCC and the Justice Department, may rest in persuading regulators that the two companies face many more competitors than just each other. Competing technologies that have helped damp satellite radio's growth -- like iPods, podcasts and Internet radio -- may give the companies ammunition to persuade regulators that a merger of the only two satellite-radio players isn't a threat to competition.
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A good one from Slate's Daniel Gross. The airlines, of course, will fight hard against any policy shift that would subject them to increased competition. But their power on the Hill is less than it once was. Don't expect reform any time soon, but when it does come up, it could very well pass.
What could possibly justify maintaining a law under which an airline's certificate of operation can be revoked if foreign ownership rises above the prohibited threshold? National security? Come on. Every day, thousands of planes belonging to airlines controlled by foreign investors—states, corporations, individuals—land at and take off from U.S. airports without incident.
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And why do foreign companies want to withdraw from U.S. markets...? Couldn't have anything to do with the regulatory environment, could it?
It also proposed a rule to make it easier for foreign companies to withdraw their securities from American markets. A number of companies have asked to withdraw, and officials said the current rules discouraged companies from listing on United States exchanges if they did not have the option of withdrawing later.
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Wasn't there a time when government mandates that gave the wealthy more power and rights under the law than other individuals were considered unjust?
On Wednesday, the Securities and Exchange Commission, under its chairman, Christopher Cox, embraced its investor protection mandate and redefined who is rich, severely limiting the number of people who can invest in hedge funds. ... [Rep. Barney Frank on what he hopes to hear from the SEC at forthcoming congressional hearings on hedge funds:] During which the S.E.C. will say, "only for the very, very rich."
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"I had an awakening," the 64-year-old Dutch-born dairyman said. "It's not totally free enterprise in the United States."
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If it came from the mouth of any other regulator, we'd be more wary of "balance."
In a speech in New York on the competitiveness of the United States capital markets, Mr. Paulson said that a wave of revisions to federal laws and regulations after the Enron and WorldCom scandals had improved transparency and accountability at companies and restored investor confidence. But he also suggested that lawmakers and regulators had gone too far and that it was time for a reassessment. “When it comes to regulation, balance is key,” he told the Economic Club of New York. “And striking the right balance requires us to consider the economic implications of our actions. Excessive regulation slows innovation, imposes needless costs on investors, and stifles competitiveness and job creation. At the same time, we should not engage in a regulatory race to the bottom, seeking to eliminate necessary safeguards for investors in a quest to reduce costs.”
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To understand how subjective poverty in America is, one need only recognize the fact that most rich people from a century ago would be considered poor by today?s standards, and today?s poor would be considered rich by the standards of 1900. In 1900, 2 percent of homes had electricity, and 1 out of 10 homes had flush toilets. Today, pretty much all of them do. In other words, the tangible goods that defined wealth have been democratized. Absurdly, according to the official measurements used by the federal government, fewer people lived in poverty in 1973 than today. But in 1973, most poor people didn?t have a car. Today, almost 75 percent of those officially in poverty have a motor vehicle. Today?s poor households, according to statistician Nicholas Eberstadt, are more likely to have telephones and televisions than non-poor families were in 1970. In the 1970s, undernourishment still factored into poverty. Today, obesity is a far bigger problem.
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"Of all things"?! This is true, but hardly surprising. Disproportionate impact on small producers is a regulatory commonplace, unfortunately.
Yet perhaps the gravest threat now to local food economies--to the farmer selling me my spinach, to the rancher who sells me my grass-fed beef--is, of all things, the government's own well-intentioned efforts to clean up the industrial food supply. Already, hundreds of regional meat-processing plants--the ones that local meat producers depend on--are closing because they can't afford to comply with the regulatory requirements the U.S.D.A. rightly imposes on giant slaughterhouses that process 400 head of cattle an hour. The industry insists that all regulations be "scale neutral," so if the U.S.D.A. demands that huge plants have, say, a bathroom, a shower and an office for the exclusive use of its inspectors, then a small processing plant that slaughters local farmers' livestock will have to install these facilities, too. This is one of the principal reasons that meat at the farmers' market is more expensive than meat at the supermarket: farmers are seldom allowed to process their own meat, and small processing plants have become very expensive to operate, when the U.S.D.A. is willing to let them operate at all. From the U.S.D.A.'s perspective, it is much more efficient to put their inspectors in a plant where they can inspect 400 cows an hour rather than in a local plant where they can inspect maybe one.
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Kudos to Mayor Daly for breaking with the unions and siding with lower-income Chicagoans. As the article reports, even at the lower wages, "Some 11,000 people applied for the 400 jobs [at a new Chicago Wal-Mart]."
"I understand and share a desire to ensure that everyone who works in the city of Chicago earns a decent wage," Mr. Daley wrote of the rules, which would have required large stores to pay at least $10 an hour by 2010, and at least $3 an hour in benefits. "But I do not believe that this ordinance, well intentioned as it may be, would achieve that end," he continued. "Rather, I believe it would drive jobs and businesses from our city, penalizing neighborhoods that need additional economic activity the most."
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In the hacking community, this sort of thing is called "social engineering." While data are hard or impossible to come by, according to anecdotes, it is responsible for more security breaches than technology-based hacking--e.g., exploiting computer security vulnerabilities. The upshot? Technology-based security and privacy regulations may be costly and difficult to implement but, in the end, will almost certainly fail. No matter how foolproof the technology, the people using it are still, inevitably fallible.
People who obtain calling records often use a technique known as pretexting -- using a pretext, like masquerading as a customer, to get a company to disclose information. Their shady subculture has been getting renewed attention since the revelation last week that a subcontractor for an investigative firm working for Hewlett-Packard used pretexting to obtain the call records of company board members and reporters.
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The moral of this story is, when you do anything related to the government, be sure to photocopy everything, even though it’s annoying and chances are it’ll be a complete waste of money, trees, and time. The minute you don’t, you’ll end up paying even more.
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