March 2014

How your rising cable bill is making sports teams and star players rich

[Commentary] Imagine famous football coaches and professional athletes taking a 50% salary cut. University of Alabama football coach Nick Saban's annual salary would be a mere $3.5 million or so. Angels baseball star Albert Pujols would earn just $8 million a year. And the Lakers' Kobe Bryant would have to be satisfied with a yearly $15 million. Not by chance, if this came to pass, you the consumer would reclaim control of your rapidly rising monthly subscription TV bill. This is not just idle speculation. Something like this will probably occur when the forced bundling of television channels ends and the consumer is given meaningful choices about which channels to purchase. As increasing numbers of viewers simply forgo subscription TV, demand alone will ultimately force change to this dysfunctional, highly unfair and ultimately doomed system. But it may take a while: Powerful interests are fighting to preserve a business model that rewards them and their clients, chief among them the American sports industry. Consumer choices should dictate which TV programs survive and which do not. Consumer sovereignty is what competition is all about.

[Grimes is a professor of antitrust law at Southwestern Law School]

Opponents of allowing cellphone calls on planes gain powerful ally

The Global Business Travel Association, a trade group for the world's business travelers, submitted its opposition last week to a plan by the Federal Communications Commission to lift a ban on voice calls on planes. The group, which represents about 6,000 travel managers, called onboard calls "detrimental to business travelers." The association even quoted folk singer Pete Seeger, who borrowed heavily from the book of Ecclesiastes when he wrote "there is a time to keep silence and a time to speak."

Is Facebook Too Big to Care?

Has Facebook gotten so successful that it doesn’t care what other people think about it?

Mark Zuckerberg has voting control over the company, so he can simply ignore Wall Street as he pursues his vision of the company’s future. Advertisers complain that Facebook keeps changing the rules on how brands can use the service to get their message out. Nate Elliott, a Forrester analyst, wrote this month, “Every day I talk to brands that are disillusioned with Facebook and are now placing their bets on other social sites.” Facebook says that the changes are meant to give more relevant content to its 1.2 billion users and get them to spend more time on the service.

Sneak preview of Comcast war

Washington can get a sneak peek of the war to come over Comcast’s plan to purchase Time Warner Cable -- on Facebook and Twitter. As Comcast readies its army of more than 100 lobbyists to sell the deal, some opponents also are taking aim, launching two pages this month on the social sites as unofficial hubs for stories and statements that slam the $45 billion megadeal.

There’s little that reflects the pages’ authorship, and the effort itself seems minuscule. But it actually demonstrates the new, early coordination among consumer groups like Public Knowledge and Free Press, and companies like Netflix and Cogent Communications. While many potential dissenting voices have been slow to surface, these and other players are making noise as they devise a strategy to fight Comcast’s well-funded campaign for Time Warner Cable. “It’s interesting how, by hanging up a shingle against the merger, all kinds of people come out of the woodwork wanting to work with us,” said Gene Kimmelman, president and CEO of Public Knowledge.

Comcast spends big, casts wide net in lobbying

Along with lobbying on issues with obvious ties to its business -- cybersecurity, Internet taxes, telecom regulations, and others -- Comcast has worked to influence bills centered on immigration reform, homeland security, and college aid, according to its disclosure reports. It lobbied on the assault-weapons ban and on the farm bill, which determines agriculture policy (think: crop insurance, sugar subsidies, and policies on poultry and beets) and food aid for the poor. The array of bills shows just how much of American life is touched by a cable and Internet giant that now also owns TV networks (NBC and Telemundo), a movie studio (Universal), theme parks, and sports channels. Comcast's reach will face new scrutiny April 9 as a Senate committee begins hearings on the company's proposed $45.2 billion purchase of Time Warner Cable.

Meet Lucy H. Koh, a Silicon Valley Judge

Judge Lucy H. Koh sits in the United States District Court in San Jose, near many Silicon Valley companies. Appointed to the federal court in 2010, Judge Koh, 45, is the first Asian-American district judge in the Northern District of California. She lives in Silicon Valley with her husband, a Stanford law professor, and their two children.

Judge Koh was born in the United States after her family immigrated from South Korea, and grew up in Mississippi. Her father, who died soon after the first Apple and Samsung patent trial, owned a sandwich shop, where the judge worked while she was a student. Her mother, a college professor, fled North Korea for Seoul when she was young. The judge attended Harvard for her undergraduate studies and law school, and then worked in Washington for the Senate Judiciary Committee and later for the Justice Department. In 1997, she moved to California to become a federal criminal prosecutor for the United States Attorney’s Office in Los Angeles. Three years later, she moved to Silicon Valley to be closer to her grandparents, and joined the law firm McDermott Will & Emery, working as a patent litigator for tech companies.

European Lawmakers Prepare to Vote on ‘Net Neutrality’

The online habits of customers, and their ability to pay, are the focus of digital policy legislation on which lawmakers from the European Union’s 28 member countries plan to vote in Brussels. A key part of the legislation is so-called network neutrality.

The rules are meant to ensure equitable access to Internet’s pipelines for services like streaming music, on-demand television and cloud computing. The big questions are who pays for them, and how much. The proposed rules have drawn furious lobbying from telecommunications companies like Vodafone, Internet giants like Google and smaller players like Spotify, and advocacy groups on behalf of the European Union’s 500 million consumers. The battle is akin to a struggle playing out in the United States but with its own European twists. The outcome could help determine whether the financial incentives are in place to pay for the multibillion-euro investments needed to upgrade Europe’s patchy mobile and landline Internet infrastructure, which in the absence of Continentwide rules has slipped ever farther behind the more advanced data networks of North America and Asia.

Judge Clears Way for Trial in Silicon Valley Wage Case

US District Judge Lucy Koh denied efforts by Apple, Google, Adobe, and Intel to avoid trial on claims that they suppressed wages by agreeing not to hire one another’s employees.

The ruling clears the way for a trial scheduled to begin May 27 that could affect 64,000 people who worked at the four Silicon Valley companies between 2005 and 2009. The companies had asked Judge Koh to rule in their favor without a trial, but the judge said there was sufficient evidence to move ahead. “These agreements were negotiated by a small group of intertwining high-level executives” who also were “involved in strictly enforcing the agreements,” Judge Koh wrote.

GOP, Dems agree: It’s the media’s fault

Republicans and Democrats are engaged in a new round of blaming the media that is likely to intensify as the election comes closer. According to Senate Democrats, reporters are too focused on ObamaCare. According to Washington Republicans, they’re not focused enough on Democratic corruption at the state level.

Apple faces certified class action suit over e-book price conspiracy

US District Court Judge Denise Cote granted class certification to plaintiffs in a lawsuit over Apple's alleged e-book price-fixing. "Virtually all class members paid inflated prices for e-books as a result of a centralized price-fixing conspiracy, and they have proffered a sophisticated damages model to reliably determine damages," Judge Cote wrote in her ruling.