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Pushing Ad Networks Out of Business: Yershov v. Gannett and the War Against Online Platforms

TOTM The lifecycle of a law is a curious one; born to fanfare, a great solution to a great problem, but ultimately doomed to age badly . . .

The lifecycle of a law is a curious one; born to fanfare, a great solution to a great problem, but ultimately doomed to age badly as lawyers seek to shoehorn wholly inappropriate technologies and circumstances into its ambit. The latest chapter in the book of badly aging laws comes to us courtesy of yet another dysfunctional feature of our political system: the Supreme Court nomination and confirmation process.

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Innovation & the New Economy

Opening Pandora’s set-top box: ICLE’s comments on the FCC’s “unlocking the box” NPRM

TOTM On Friday the the International Center for Law & Economics filed comments with the FCC in response to Chairman Wheeler’s NPRM (proposed rules) to “unlock” . . .

On Friday the the International Center for Law & Economics filed comments with the FCC in response to Chairman Wheeler’s NPRM (proposed rules) to “unlock” the MVPD (i.e., cable and satellite subscription video, essentially) set-top box market. Plenty has been written on the proposed rulemaking—for a few quick hits (among many others) see, e.g., Richard Bennett, Glenn Manishin, Larry Downes, Stuart Brotman, Scott Wallsten, and me—so I’ll dispense with the background and focus on the key points we make in our comments.

Our comments explain that the proposal’s assertion that the MVPD set-top box market isn’t competitive is a product of its failure to appreciate the dynamics of the market (and its disregard for economics). Similarly, the proposal fails to acknowledge the complexity of the markets it intends to regulate, and, in particular, it ignores the harmful effects on content production and distribution the rules would likely bring about.

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Antitrust & Consumer Protection

Comments, In the Matter of Expanding Consumers’ Video Navigation Choices, FCC

Regulatory Comments "In this proceeding the Commission proposes to “open” the market for multichannel video programming distributor (“MVPD”) set-top box video interfaces..."

Summary

“In this proceeding the Commission proposes to “open” the market for multichannel video programming distributor (“MVPD”) set-top box video interfaces. We believe that the Commission’s proposed rules fail to take account of the fundamental economic realities that govern the creation of content and its distribution, fail to properly respect copyright and contractual rights, and constitute an inappropriate, to say nothing of unwise, exercise of the Commission’s authority under Section 629.

With this NPRM the Commission undertakes an intervention into a market that is robust, competitive, and scarcely in need of regulatory assistance. And Chairman Wheeler is well aware of this reality:

“American consumers enjoy unprecedented choice in how they view entertainment, news and sports programming. You can pretty much watch what you want, where you want, when you want.”

Not only is the market robust, but it is rooted in a complicated set of business negotiations (most notably between programmers and distributors) that contain an enormous number of moving parts.

“Content providers negotiate with MVPDs along many dimensions, including the presentation of content in terms of adjacencies; how a content producer’s brand will be treated; how and when content can be commercialized with advertised; limitations on the use of content as part of a content producer’s larger set of business model innovations; and the legal and regulatory obligations of the content producers themselves, including “self-regulatory initiatives such as the Better Business Bureau’s Children’s Advertising Review Unit (“CARU”) and Children’s Food and Beverage Advertising Initiative (“CFBAI”), and contractual agreements with writers’, directors’, and/or actors’ guilds.”

And not only are the contracts themselves extremely complex, but the various players in content and distribution markets are interrelated in complex and subtle ways. The no- tion that the FCC could focus in isolation even on something as seemingly incidental as set-top boxes without unanticipated and far-reaching ramifications throughout the eco- system is misguided.

On the one hand, the Commission’s proposed rules seem to dramatically underappreciate and insufficiently assess this underlying complexity, thereby misconstruing the likely effects of the regulation and threatening the investment and innovation that have produced this “Golden Age” of television and home video.6 On the other hand, if it does proceed with such rules anyway, the Commission should, and perhaps must under the APA and relevant judicial decisions like Michigan v. EPA,7 take much greater care to identify and evaluate the broad consequences—that is to say the costs and benefits—of its rules than it appears to have so far done in this NPRM…”

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Telecommunications & Regulated Utilities

Netflix and net neutrality: Hypocritically screwing over Internet users since 2015!

TOTM Netflix’s latest net neutrality hypocrisy (yes, there have been others. See here and here, for example) involves its long-term, undisclosed throttling of its video traffic on AT&T’s and . . .

Netflix’s latest net neutrality hypocrisy (yes, there have been others. See here and here, for example) involves its long-term, undisclosed throttling of its video traffic on AT&T’s and Verizon’s wireless networks, while it lobbied heavily for net neutrality rules from the FCC that would prevent just such throttling by ISPs.

It was Netflix that coined the term “strong net neutrality,” in an effort to import interconnection (the connections between ISPs and edge provider networks) into the net neutrality fold. That alone was a bastardization of what net neutrality purportedly stood for, as I previously noted…

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Telecommunications & Regulated Utilities

The FCC, Privacy, and Authority Over the Edge: Forborn, not Forbidden

TOTM The FCC doesn’t have authority over the edge and doesn’t want authority over the edge. Well, that is until it finds itself with no choice but to regulate the . . .

The FCC doesn’t have authority over the edge and doesn’t want authority over the edge. Well, that is until it finds itself with no choice but to regulate the edge as a result of its own policies. As the FCC begins to explore its new authority to regulate privacy under the Open Internet Order (“OIO”), for instance, it will run up against policy conflicts and inconsistencies that will make it increasingly hard to justify forbearance from regulating edge providers.

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Telecommunications & Regulated Utilities

Kolasky (2) on the Apple e-books case: Coordination, even horizontal coordination, isn’t per se illegal

TOTM Jon Jacobson in his initial posting claims that it would be “hard to find an easier case” than Apple e-Books, and David Balto and Chris Sagers seem to agree. I suppose that would . . .

Jon Jacobson in his initial posting claims that it would be “hard to find an easier case” than Apple e-Books, and David Balto and Chris Sagers seem to agree. I suppose that would be true if, as Richard Epstein claims, “the general view is that horizontal arrangements are per se unlawful.”

That, however, is not the law, and has not been since William Howard Taft’s 1898 opinion in Addyston PipeIn his opinion, borrowing from an earlier dissenting opinion by Justice Edward Douglas White in Trans-Missouri Freight Ass’n, Taft surveyed the common law of restraints of trade. He showed that it was already well established in 1898 that even horizontal restraints of trade were not necessarily unlawful if they were ancillary to some legitimate business transaction or arrangement.

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Antitrust & Consumer Protection

Sagers on the Apple e-books case: Why does everybody hate competition so much?

TOTM United States v. Apple has fascinated me continually ever since the instantly-sensational complaint was made public, more than three years ago. Just one small, recent manifestation . . .

United States v. Apple has fascinated me continually ever since the instantly-sensational complaint was made public, more than three years ago. Just one small, recent manifestation of the larger theme that makes it so interesting is the improbable range of folks who apparently consider certiorari rather likely—not least some commenters here, and even SCOTUSblog, which listed the case on their “Petitions We’re Watching.” It seems improbable, I say, not because reasonable people couldn’t differ on the policy issues. In this day and age somebody pops up to doubt every antitrust case brought against anybody no matter what. Rather, on the traditional criteria, the case just seems really ill-suited for cert.

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Antitrust & Consumer Protection

Reed on the Apple e-books case: “We can remember it for you wholesale” – why the model matters in Apple e-books

TOTM In Philip K. Dick’s famous short story that inspired the Total Recall movies, a company called REKAL could implant “extra-factual memories” into the minds of anyone. That technology may . . .

In Philip K. Dick’s famous short story that inspired the Total Recall movies, a company called REKAL could implant “extra-factual memories” into the minds of anyone. That technology may be fictional, but the Apple eBooks case suggests that the ability to insert extra-factual memories into the courts already exists.

The Department of Justice, the Second Circuit majority, and even the Solicitor General’s most recent filing opposing cert. all assert that the large publishing houses invented a new “agency” business model as a way to provide leverage to raise prices, and then pushed it on Apple.

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Antitrust & Consumer Protection

Hazlett on the Apple e-books case: The Apple case is a throwback to Dr. Miles, and that’s not a good thing

TOTM The Apple e-books case is throwback to Dr. Miles, the 1911 Supreme Court decision that managed to misinterpret the economics of competition and so thwart productive . . .

The Apple e-books case is throwback to Dr. Miles, the 1911 Supreme Court decision that managed to misinterpret the economics of competition and so thwart productive activity for over a century. The active debate here at TOTM reveals why.

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Antitrust & Consumer Protection