September 2008

The Justice Department has quietly hired one of the nation's best-known litigators, former Walt Disney Co. vice chairman Sanford Litvack, for a possible antitrust challenge to Google's growing power in advertising. Litvack's hiring is the strongest signal yet that the US is preparing to take court action against Google and its search-advertising deal with Yahoo. The two companies combined would account for more than 80% of US online-search ads. For weeks, US lawyers have been deposing witnesses and issuing subpoenas for documents to support a challenge to the deal. Such efforts don't always mean a case will be brought, however. Litvack, who was the Justice Department antitrust chief under President Jimmy Carter, has been asked to examine the evidence gathered so far and to build a case if the decision is made to proceed.

The Australian government has not ruled out the possibility that the planned National Broadband Network could be run as a monopoly, effectively closing the door on competing broadband infrastructure investments. Telco consortium Terria yesterday said it would seek a guaranteed monopoly network if successful in its bid to build the network that would service 98 per cent of the nation. "Our proposition to the Government is that no party be allowed to expand the network and operate in competition to the national broadband network," said Terria bid manager Michael Simmons. Terria's announcement sparked the ire of rival bidder Telstra, which labelled the telco consortium as a "closet monopolist."

Roughly a year ago, Federal Communications Commission Chairman Kevin Martin said he would take action that would ban programmers from bundling channels they were selling to cable companies. But one year later, Chairman Martin hasn't introduced even a draft rule on the program bundling subject. On a Friday, conference call with reporters, Chairman Martin said not much was going on with the idea, which is known as wholesale programming unbundling. The idea that Martin would do anything on it becomes even less likely as his chairmanship comes close to an end -- a new administration in January would bring in a new chairman. If Martin introduced something now, it would be very unlikely to be adopted by the time he moved out of his position as chairman. The quasi "a la carte" proposal would have been seen as a first step before Martin moved forward to require a full-out "a la carte" measure that would allow consumers to choose which channels they wanted, rather than the current system where individuals buy large packages of channels. That also, now seems unlikely.

Research firm Gartner said 32.2 million smartphones were sold in the second-quarter this year, a 15.7% increase from the year-earlier period, but flat compared to the first-quarter this year. The growth in sales of smartphones continues to slow, weighed by the weakening economy and slowing consumer demand. Last year's second-quarter smartphone sales saw robust growth of 55% on year. Smartphone sales made up 11% of total device sales in the quarter. The North America market grew 78.7% year on year during the quarter, making up for nearly 25% of the global smartphone sales. Europe, the Middle East and Africa grew 21% in the quarter, while Western Europe drove much of the growth in the region with a 29.3% increase. Sales in the Asian/Pacific market fell 4.8%, while sales in Japan fell 24%.