June 2012

Competing With Amazon on Amazon

Thousands of small merchants depend on Amazon to reach customers who otherwise wouldn't know they exist. A few of them complain, though, that Amazon sometimes eats their lunch. According to some small retailers, the Seattle-based giant appears to be increasingly using its Marketplace—where third-party retailers sell their wares on the Amazon site—as a vast laboratory to spot new products to sell, test sales of potential new goods, and exert more control over pricing.

US Judge Issues Preliminary Injunction Against Samsung Galaxy Tab

Samsung Electronics was dealt a blow when a California judge issued an injunction banning sales of the company's Galaxy Tab 10.1 touchscreen tablet at the request of Apple.

The preliminary injunction, which bars Samsung from making or selling the tablet, or any similar device, in the U.S., is the latest twist in the ongoing legal battle between Apple and the Korean technology giant. U.S. District Judge Lucy Koh wrote that Apple had made a strong case that Samsung had violated its design patent, which describes the front, back and sides of a device that looks similar to the iPad. The injunction is the first Apple has been granted against Samsung in the U.S. A trial is expected on July 30. Analysts said the ruling was unlikely to have an impact on the roughly 30 legal cases between the companies over design and technology patents in 10 different countries and won't significantly dent Samsung's earnings.

EU court upholds Microsoft antitrust fine

Microsoft suffered another defeat at the hands of the European Commission, after failing to overturn a hefty fine in a court battle that is likely to draw the curtain on an antitrust feud lasting more than a decade.

While the EU’s second-highest court shaved 4 percent from Microsoft’s €899m fine to €860, it threw out the US technology group’s main arguments to annul the first Brussels penalty levied on a company for non-compliance. The decision is an important victory for Europe’s highest competition authority and bolsters its powers to impose painful financial penalties on companies that refuse to implement its antitrust decisions.

One of the biggest ever EU fines was levied on Microsoft in 2008 after the software group failed to comply with a Brussels order to share data with rivals on reasonable terms. Microsoft offered the data but at a price the commission found excessive.

FCC Stops Clock on Verizon-SpectrumCo and Verizon-Cox

On June 25, Verizon Wireless and T-Mobile filed five applications requesting Federal Communications Commission approval for the full and partial assignments of certain AWS-1 licenses by and between Verizon Wireless and T-Mobile. The licenses that Verizon Wireless would assign to T-Mobile include 47 licenses (covering all or portions of 98 CMAs) that Verizon Wireless has proposed to acquire from SpectrumCo and Cox Wireless, as well as from Leap Wireless International. T-Mobile and Verizon Wireless state that assignments proposed in the T- Mobile/Verizon Wireless Applications are contingent upon regulatory approval of these other pending applications.

Given the express connection between the T-Mobile/Verizon Wireless Applications and the Verizon - SpectrumCo and Verizon Wireless - Cox Applications pending in WT Docket No. 12-4, the FCC’s Wireless Telecommunications Bureau issued a Public Notice on June 26 establishing a 14-day period in which interested parties can comment on the impact of the T-Mobile/Verizon Wireless Applications on the transactions in this docket. In light of this comment period, the FCC is stopping for 14 days the commission's informal 180-day clock for the proposed Verizon Wireless - SpectrumCo and Verizon Wireless - Cox transactions in WT Docket No. 12-4, effective June 26 and restarting on July 10, 2012, which will be Day 138.

Petitions to Deny the newly-announced transaction are due July 10, 2012; Oppositions are due July 17; Replies are due July 24.

Despite T-Mobile Deal, Verizon Still Faces Battle Over Marketing Agreements with Cable Firms

After cutting a deal with T-Mobile USA, Verizon appears to have helped smooth the way for federal approval of its bid to buy spectrum from a group of cable firms. But it has done little to quell concern over related marketing agreements between the wireless provider and the cable operators.

Analysts say Verizon's deft move to peel off T-Mobile from the band of critics of its deal with the cable firms will help clear the way for Federal Communications Commission approval of the spectrum transaction. "Our sense is the deal would address or largely address the FCC's spectrum concentration concerns resulting from Verizon's planned purchase of cable AWS (advanced wireless service) spectrum," the research firm Stifel Nicolaus said in a research note. Even critics acknowledged that Verizon's deal with T-Mobile, which is contingent on approval of its spectrum deal with the cable firms, has removed a major hurdle. "I definitely think that Verizon has played this very well," Public Knowledge Senior Vice President Harold Feld said.

Sweeping Effects as Broadband Moves to Meters

The broadband era began with the expectation that Internet connections were like buffets — all you can eat, 24 hours a day. But users are now being prodded to think about how much they’re consuming.

Internet service providers are moving slowly but surely, toward tiers of pricing for higher speeds and bigger amounts of broadband at home, mimicking the wireless industry’s much-maligned pricing plans. The strategy, called usage-based billing, is advantageous for the companies that control the digital pipelines. But it may be detrimental for customers who are watching more and more video on the Web every month, as well as companies like Netflix that distribute it. Some fear that as customers become more aware of how much broadband they’re using each month, they’ll start to use less of it, and in that way, protect traditional forms of entertainment distribution and discourage new Internet services. Executives at cable and broadband providers dispute that by saying it is in their interest to make broadband a must-have product. “The exploding growth of online video usage undercuts any argument that cable is standing in the way of this business,” said Brian Dietz, a spokesman for the National Cable and Telecommunications Association, the industry’s trade group. But some government officials aren’t so sure. The Justice Department’s antitrust lawyers are conducting an investigation into the cable industry’s treatment of online video companies with an eye toward deterring anticompetitive behavior. Some analysts say the investigation could, perhaps counter-intuitively, accelerate the move to usage-based billing.

On Facebook, the Semantics of Visibility vs. Privacy

When I called Facebook to ask why the company had changed the settings for the display of people’s e-mail addresses without their permission, potentially violating users’ privacy, I was told that the swap was not a “privacy” change, but rather a “visibility setting” change. I offered a genuinely confused response to Jaime Schopflin, a Facebook spokeswoman I spoke with. “Um, isn’t changing the visibility of something actually changing the privacy setting?” I asked. “No,” Ms. Schopflin said, explaining that they are two different things. To Facebook, the words privacy and visibility may be as different as peas and carrots. But Facebook users and one linguistic expert I talked to seem to disagree. Jesse Sheidlower, the editor at large of the Oxford English Dictionary, said Facebook’s effort to draw such a distinction was “worse than playing semantics.”

Half of the world's kids fear the online bully, report says

In the laundry list of universal kid fears -- monsters, nightmares, kidnappers, mean big kids -- we may soon be able to add cyberbully.

According to data collected by Microsoft's Safety & Security Center, 54% of kids worldwide say they worry about being bullied online, and nearly 1 in 4 say they have experienced online bullying. Additionally, 24% admitted to having bullied someone else online. Online bullying is still less frequent than off-line bullying in almost all the countries included in the report. Worldwide, 72% of kids surveyed said they have been bullied off-line, compared with 37% who say they have been bullied online. The two exceptions to this rule were China and Singapore. The researchers found that 80% of kids in China say they worry about being bullied online and 70% of kids say they have been bullied online. Both numbers are way above the worldwide average.

NCTA’s Powell: TV's Golden Age Is Set Against Tarnished Regulations

National Cable & Telecommunications Association President Michael Powell said his testimony about the future of video will focus on three things: 1) cable's golden age is now; 2) technology is driving choice, removing friction points between cable and consumers including set-tops, navigation; and 3) the cable industry is not trying to thwart over-the-top video.

Given those, he says, it is time to take a fresh look at regulations that are premised on either a concentrated, vertically-integrated monopolist model of cable that is not true today, or on subsidizing broadcasters and protecting them from competition. Whether those should continue to be the national judgments on those services "is worth some reconsidering by Congress," he says.

House Dems: Data Caps, SpectrumCo Key Future of Video Issues

Not surprisingly, the House Communications Subcommittee Democratic staffers have a slight different to-do list than their Republican counterparts. While over-the-top video, retransmission rules and Dish's Hopper ad-skipping DVR are on both lists of key topics that might come up in the June 27 future of video hearing in the subcommittee, Democrats have a couple more on their list. According to a copy of the Democrats' memo on the hearing, data caps are a key issue, as is the sale of spectrum from cable operators to Verizon.

Benton

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