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January 2005 (previous | next)
 

Monday, January 31, 2005

SBC-AT&T Merger: There they go again . . .

There is much about the proposed SBC-AT&T merger that is not particularly surprising. Predictions of approval aside, the "vertical" aspects of these combinations can bring consumer benefits, encouraging companies to provide better bundles of services more cheaply, as I have suggested previously. And a huge goal of the 1996 Act under section 271 was to promote competition by removing restictions on phone companies that existed when the government broke up "Ma Bell." These former restrictions would have made this deal patently illegal a few years ago.

Equally unsurprising -- but more troubling -- are the quick, unequivocal objections to the deal from those purporting to represent consumers.

Continue reading SBC-AT&T Merger: There they go again . . . . . .

posted by Kyle Dixon @ 2:34 PM | Communications

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The Merger: Room for Coase-ian Optimism on Intercarrier Comp?

One peculiar benefit of the AT&T/SBC merger might be a firm with better incentives to work out the seemingly intractable problems of intercarrier compensation reform.

Ronald Coase famously in The Nature of the Firm noted that markets and firms were different ways to organize economic activity, and that the decision whether to organize hierarchically in a firm or use the price system in markets depends on transaction costs. Another determinant that influences integration into a firm is when the price system breaks down. With intercarrier compensation, we have a variation on that theme, where the price system has been distorted and communicates "false" signals to the market. By integrating two firms on opposite sides of that broken price system (SBC and AT&T), you create the internal incentives for the merged entity to work out intercarrier compensation transitions.

Of course, you are not in a perfect world of Coase-ian integration because regulators and third-parties (particularly rural carriers) are reliant on the current system and will be affected by any reforms the merged entity might arrive at. Nonetheless, with the merger, you do create a firm with better incentives to work these issues out.

posted by Ray Gifford @ 10:02 AM | Communications

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Listen to Humpty Dumpty

Yes, the potential SBC/AT&T merger is a significant event, and, yes, the antitrust authorities and the regulators will give it careful scrutiny, as they should.

But there will be much talk today about offspring growing up to slay their parents and the like. Maybe even talk of Oedipus complexes.

I much prefer to listen to the simpler Humpty Dumpty tale....the one about "all the King's horses and all the King's men, couldn't put Humpty together again."

It really is a very different--and much more competitive--telecommunications marketplace we have now than when Reed Hundt called a Baby Bell/ATT combination "unthinkable". This time, before jumping to any quick conclusions, I'd be thinking Humpty.

posted by Randolph May @ 9:52 AM | Antitrust & Competition Policy, Communications, Wireless

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SBCT&T

It's official that SBC is acquiring AT&T, at least between the parties. Now comes the excruciating process of the government setting the merger tax.

Of course, there is no such thing as an explicit merger tax. And furthermore, a transaction where uber-regulator Reed Hundt opines: "[t]he odds are that regulators will welcome this new SBC-AT&T as a champion of American communications, both domestically and internationally" seems to be on track for approval. That said,

Continue reading SBCT&T . . .

posted by Ray Gifford @ 9:38 AM | Antitrust & Competition Policy

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Sunday, January 30, 2005

Classification Axioms

According to TR Daily [subscription required], the Minority Media & Telecommunications Council has weighed in on the dispute between telcos and AT&T Corp. over the latter's prepaid calling card services, urging the FCC to preserve universal service and access charge mechanisms by declaring that the offerings in question are telecommunications, not information, services.

The MMTC says: "It should be axiomatic that if a service is regarded and actually used by consumers as telecommunications, providers of that service should pay their USF [Universal Service Fund] and access charge obligations."

There are, of course, very fundamental questions concerning the extent to which the rationales underlying the high-cost and low income Universal Service funds remain valid in today's marketplace. For a PFF report that helps elucidate those fundamental questions, click here. But, the MMTC is on to something, of course, in presuming that in a rational regime, the focus for regulatory purposes should be on how consumers actually perceive and use services in the marketplace, and not on the techno-functional characteristics of the service.

posted by Randolph May @ 6:07 PM | Communications, The FCC

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Friday, January 28, 2005

Telephone Competition Must Be Real

Even the New York Times gets it. (Registration required).

posted by Ray Gifford @ 4:10 PM | Communications

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Bell-AT&T Mergers: Who's "Unthinking" Now?

Ray is right to point out the important ways in which a Bell-AT&T merger may no longer raise the same monopoly fears it once did, particularly as one contrasts the current structure of the market with cirucmstances when Ma Bell was divvied up over two decades ago. What puzzles me is the most recent resurrection of the descriptor "unthinkable," as in "such a proposed merger would so undermine public policy goals that that it is unthinkable and, thus, should be rejected before it gets filed."

The term "unthinkable" might (and perhaps should) be dismissed as a catchy -- and therefore quotable -- confection for the press to sample. But to the extent folks rely on it to contribute to meaningful policy debate, that reliance is, at best, misplaced.

Continue reading Bell-AT&T Mergers: Who's "Unthinking" Now? . . .

posted by Kyle Dixon @ 10:52 AM | Communications

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SBC to Swallow AT&T?

Nothing signifies the seismic changes in the communications landscape than the reported merger talks between SBC and AT&T. A merger that then-FCC Chairman Reed Hundt once deemed "unthinkable" now draws a yawn in telecom circles, with the speculation only tending toward whether SBC will overpay for the declining business of AT&T.

The interesting policy point here is how dramatically our definition of markets has changed. This once would have been a vertical merger for SBC into the long distance market, but that market is rapidly disappearing altogether. Instead, for antitrust purposes, it appears to be a simple horizontal merger in the enterprise market -- and this is a market with multiple players and even more potential players as VoIP gains a foothold.

Continue reading SBC to Swallow AT&T? . . .

posted by Ray Gifford @ 1:32 AM | Communications

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Thursday, January 27, 2005

A Rare Event

It is always a big event - and unfortunately all too rare - when a government agency reverses a bad decision, but that is exactly what happened today when the California Public Utilities Commission suspended the consumer "bill of rights" it had adopted last year. The 3-1 vote, in which Commissioner Susan Kennedy and CPUC President Michael Peevey were joined by newly appointed Commissioner Dian Gruenreich, illustrates that elections sometimes do have consequences.

Continue reading A Rare Event . . .

posted by Tom Lenard @ 4:32 PM | Wireless

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Kicking it Down the Road...or Kicking it to the Curb?

The CaPUC voted 3-1 today to push off implementation of onerous new wireless rules that were set to go into effect last month. RCRNews has the story. The issue will be revisited in April. The political story isn't far from the surface in the Governator's state. The critical vote came from just-sworn in Commissioner Dian Grueneich. The San Francisco Democrat joined two other Democrats, Commissioners Kennedy and Peevey, to stay the regulations. Hear, Hear! Let's cheer economically rational decisions.


posted by @ 4:29 PM | Wireless

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Thursday, January 27, 2005

Practicing Economics Without a License

posted by Patrick Ross @ 3:50 PM | Broadband

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Digital Europe

posted by Tom Lenard @ 3:28 PM | Digital Europe, IP

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Wednesday, January 26, 2005

A Plea for Priorities Over Personalities at the FCC

posted by Kyle Dixon @ 3:37 PM | The FCC

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Monday, January 24, 2005

Power Play Contd.

posted by Patrick Ross @ 4:02 PM | Capitol Hill

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On the next Chairman...find the next Fred Kahn

posted by Ray Gifford @ 11:25 AM | The FCC

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Lynne takes on Sunstein and NPR ... All During Breakfast!

posted by Ray Gifford @ 11:22 AM | Innovation

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Sunday, January 23, 2005

Google...

posted by Ray Gifford @ 11:08 PM | Communications, VoIP

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Friday, January 21, 2005

Tech Day at the Supreme Court...

posted by @ 4:17 PM | IP, Supreme Court, The FCC

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Powell's Departure

posted by Randolph May @ 1:57 PM | The FCC

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In search (and praise) of successful temperament

posted by Kyle Dixon @ 12:09 PM | The FCC

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Tuesday, January 18, 2005

CableCards, Competition and Modularity in the Digital Age

posted by Kyle Dixon @ 4:39 PM | Broadband, Cable, Communications

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Universal Service: Broken But Fixable

posted by Randolph May @ 12:14 PM | Communications

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Sports Modularity

posted by Ray Gifford @ 11:02 AM | Software

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Sunday, January 16, 2005

Abernathy Mispeaks, Methinks

posted by Randolph May @ 7:43 PM | The FCC

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Friday, January 14, 2005

Welcome to the new and improved PFF Blog

posted by Blog Administrator @ 4:28 PM | General

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Your FCC at Work

posted by Ray Gifford @ 1:25 AM | The FCC

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Thursday, January 13, 2005

Reprise on the Baseball "Ownership" Scandal

posted by @ 10:36 PM | Sports, Supreme Court

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Municipal Broadband, Public Goods and Public Choice

posted by Ray Gifford @ 11:30 AM | Broadband, Municipal Ownership, State Policy

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Tuesday, January 11, 2005

There's Something Rotten Near Detroit

posted by @ 5:19 PM | Communications

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Cliff Clavin, Telephone Man

posted by @ 2:58 PM | Communications, Wireline

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Capitol Power Play

posted by Patrick Ross @ 2:48 PM | Communications

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9, 8, 2...Can You Find the Pattern?

posted by @ 2:30 PM | Communications, The FCC

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Monday, January 10, 2005

State of the Net

posted by Patrick Ross @ 4:01 PM | Capitol Hill, Communications, IP

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Sunday, January 9, 2005

Does "Finders Keepers" Help the Catchers?

posted by Ray Gifford @ 11:47 PM | Sports

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MLB's "Open Platform" for Balls Causes Uproar

posted by @ 11:35 PM | Sports

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Lucky Jack Aubrey and an ecumenism aboard ship

posted by Ray Gifford @ 11:02 PM | General

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Newspapers in Foxholes

posted by @ 8:15 PM | Mass Media

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Putting on a Happy Face

posted by @ 8:01 PM | General

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Vertical Integration and Next Gen Gaming

posted by @ 6:52 PM | Software, VoIP

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Friday, January 7, 2005

55 Years

posted by @ 6:25 PM | Economics

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Thursday, January 6, 2005

All this talk about capital...

posted by Ray Gifford @ 5:51 PM | General

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Laissez le fiber roulez

posted by Ray Gifford @ 4:57 PM | Broadband, Municipal Ownership

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Power Struggle...

posted by @ 4:54 PM | State Policy, Wireless

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Spam in '04

posted by Mike Pickford @ 10:57 AM | E-commerce

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Wednesday, January 5, 2005

Nowhere to go but up

posted by @ 7:39 PM | General

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More post-holiday shopping -- sigh

posted by Kyle Dixon @ 2:57 PM | Communications, State Policy

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Telecom Romance

posted by Ray Gifford @ 2:47 PM | Communications, Events

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Tuesday, January 4, 2005

Manifest Injustice

posted by Ray Gifford @ 4:56 PM | Sports

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Dodging another appellate bullet

posted by Kyle Dixon @ 11:09 AM | Broadband, State Policy, The FCC

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Monday, January 3, 2005

Back Scratching

posted by Ray Gifford @ 10:45 PM | IP

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  SBC-AT&T Merger: There they go again . . .
The Merger: Room for Coase-ian Optimism on Intercarrier Comp?
Listen to Humpty Dumpty
SBCT&T
Classification Axioms
Telephone Competition Must Be Real
Bell-AT&T Mergers: Who's "Unthinking" Now?
SBC to Swallow AT&T?
A Rare Event
Kicking it Down the Road...or Kicking it to the Curb?
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