The Federal Communications Commission has moved to keep Internet service providers from limiting or unreasonably discriminating against content provided by competing services
The regulations are designed to keep telephone and cable companies that provide phone services from using their Internet services to limit use of Skype and other online telephone services. It is also intended to halt them from making content provided by audio and video service providers they do not own less desirable by limiting downloads from firms such as Netflix or Hulu or providing faster service only for their own content.
The rules are designed to maintain a level competitive position on the Internet and to restrict the abilities of companies that dominate access to the Internet from using oligopolistic control of the service points to harm content competitors.
The regulations require that services allow their customers equal access to all online content and services, but allow the services some flexibility to management network congestion and spam as long as the rules are clear and not anti-competitive.
The rules apply to fixed line services, but do not apply equally to wireless telephony which is becoming the primary means of Internet access though smart phones and electronic tablets and e-reader. Mobile phone providers are permitted to provide preferential access to their services or selected partners, but the rules forbid mobile providers from blocking access to competing sites and services. Mobile services are given more leeway to manage their networks because capacity is more limited than on the Internet.
The regulations are an important step in ensuring that major service providers such as Comcast and Verizon are not allowed to use their dominance in service provision to harm other companies and the FCC should be applauded for its efforts. Such companies have in the past shown their willingness to take advantage of their monopoloy power and are not widely noted for their consumer friendliness.
Major service providers and Republicans are vowing to fight the move, arguing that the FCC does not have the authority to issue such regulations. If the courts side with them on the issue, Congress should explicitly give it the authority or empower the Federal Trade Commission to ensure competivieneess online.
Showing posts with label competition. Show all posts
Showing posts with label competition. Show all posts
Wednesday, December 22, 2010
Wednesday, July 7, 2010
Competitive Struggles Among Television Platforms
Since the emergence of cable and satellite television services there has been struggles among platforms to increase their attractiveness to audiences and to draw market share from terrestrial television in developed nations. These struggles have had affected content producers, broadcasters, platform operators and regulators attempting to fashion socially optimal broadcasting systems.
In the first competitive struggles between terrestrial broadcasters and cable operators, broadcasters controlled the highest quality contemporary programming and cable operators primarily competed by offering a wider variety of channels and providing premium movie channels. In many locations broadcasters actively sought regulatory policies to keep their channels from appearing on cable in order to reduce its attractiveness as a competitor.
As cable matured and satellite services emerged, the nature of the struggle shifted as greater subscription and advertising revenues allowed cable networks to offer higher quality contemporary programming. In this competitive phase, terrestrial, cable and satellite operators began struggling for exclusivity of content that would drive audiences to the platforms. Gaining exclusive rights to first broadcast runs of motion pictures, sporting, musical and other events, and high quality original programs became primary goals. In this environment, producers of content and owners of event rights sought to maximize their returns across the platforms. while platform operators sought to maximize their returns by gaining market power through exclusivity. This led to negotiations based not only on transmission rights but exclusivity rights as well, which dramatically pushed up costs of some content—especially sports rights.
As cable garnered a larger audience share, broadcasters that had previously been opposed to carriage of terrestrial signals on cable because asking regulators for ‘must carry’ rules to require cable operators to carry terrestrial channels so they could have additional access to audiences or audiences in places their terrestrial signals had not previously reached. This was especially useful for advertising supported channels, both public service and commercial.
In recent years, the widespread success of cable and satellite platforms and the shift of wealth from terrestrial to other platforms has led broadcasters to demand payments from cable and satellite platform operators for carrying their channels. The newer platforms are resistent and in some nations the struggle over payments remains on-going.
The digitalisation of terrestrial, cable, satellite, and broadband platforms has now created multiple opportunities of distribution of audiovisual materials and is creating a new environment in which additional competitive struggles are taking place among platform operators. At stake are the significant potential gains from advanced paid video-on-demand services and IPTV. Platform operators—DTT, cable, satellite, and telecommunications firms that offer broadband services—are now struggling to ensure that they are not competitively disadvantaged compared to other operators. Operators that control or have high market power over platforms, especially broadband links and systems needed for advanced services or interactive DTT services, will have significant advantages in the next generation of services. Consequently, there is a great deal of effort on the part of major platform operators to acquire access to all platforms and services through ownership, alliances and joint ventures and in many cases there are outright efforts to control those platforms and servcies.
The trajectory and outcome of this competitive struggle is particularly important because it will have significant impact on the range of services and costs for services available to the public. These developments also have significant importance for the relationship between content producers and platform operators because the means of compensation is likely to evolve from current transmission rights and exclusivity rights payments to one involving revenue and profit sharing. This has significant implications to the funding and ways that contemporary terrestrial television programming is created and role of terrestrial broadcasters in the new environment.
In the first competitive struggles between terrestrial broadcasters and cable operators, broadcasters controlled the highest quality contemporary programming and cable operators primarily competed by offering a wider variety of channels and providing premium movie channels. In many locations broadcasters actively sought regulatory policies to keep their channels from appearing on cable in order to reduce its attractiveness as a competitor.
As cable matured and satellite services emerged, the nature of the struggle shifted as greater subscription and advertising revenues allowed cable networks to offer higher quality contemporary programming. In this competitive phase, terrestrial, cable and satellite operators began struggling for exclusivity of content that would drive audiences to the platforms. Gaining exclusive rights to first broadcast runs of motion pictures, sporting, musical and other events, and high quality original programs became primary goals. In this environment, producers of content and owners of event rights sought to maximize their returns across the platforms. while platform operators sought to maximize their returns by gaining market power through exclusivity. This led to negotiations based not only on transmission rights but exclusivity rights as well, which dramatically pushed up costs of some content—especially sports rights.
As cable garnered a larger audience share, broadcasters that had previously been opposed to carriage of terrestrial signals on cable because asking regulators for ‘must carry’ rules to require cable operators to carry terrestrial channels so they could have additional access to audiences or audiences in places their terrestrial signals had not previously reached. This was especially useful for advertising supported channels, both public service and commercial.
In recent years, the widespread success of cable and satellite platforms and the shift of wealth from terrestrial to other platforms has led broadcasters to demand payments from cable and satellite platform operators for carrying their channels. The newer platforms are resistent and in some nations the struggle over payments remains on-going.
The digitalisation of terrestrial, cable, satellite, and broadband platforms has now created multiple opportunities of distribution of audiovisual materials and is creating a new environment in which additional competitive struggles are taking place among platform operators. At stake are the significant potential gains from advanced paid video-on-demand services and IPTV. Platform operators—DTT, cable, satellite, and telecommunications firms that offer broadband services—are now struggling to ensure that they are not competitively disadvantaged compared to other operators. Operators that control or have high market power over platforms, especially broadband links and systems needed for advanced services or interactive DTT services, will have significant advantages in the next generation of services. Consequently, there is a great deal of effort on the part of major platform operators to acquire access to all platforms and services through ownership, alliances and joint ventures and in many cases there are outright efforts to control those platforms and servcies.
The trajectory and outcome of this competitive struggle is particularly important because it will have significant impact on the range of services and costs for services available to the public. These developments also have significant importance for the relationship between content producers and platform operators because the means of compensation is likely to evolve from current transmission rights and exclusivity rights payments to one involving revenue and profit sharing. This has significant implications to the funding and ways that contemporary terrestrial television programming is created and role of terrestrial broadcasters in the new environment.
Saturday, June 12, 2010
Getting It Wrong: The FTC and Policies for the Future of Journalism
Following hearings on the state of newspapers this past year, the U.S. Federal Trade Commission staff has now prepared a discussion paper of potential policy recommendations to support the reinvention of journalism.
The FTC’s staff ignores the fact that most newspapers are profitable (the average operating profit in 2009 was 12%), but that their corporate parents are unprofitable because of high overhead costs and ill-advised debt loads taken on when advertising revenues were peaked at all time highs. It also fails to make adequate distinction between longer term trends affecting newspapers and the effects of the current recession. The staff thus blends the two together to give a skewed picture of the mid- to long-term health of the industry.
Policy alternatives suggested by the staff for consideration include:
If commercial news enterprises can’t effectively manage themselves, compete in markets for their products and services, or find effective business models for themselves, why does anyone think that bureaucrats in the government have any ability to solve those problems for the news industry?
It is a classic example of policy-making folly that starts from the premise that the government can solve any problem—even one created by consumer choices and an inefficient, poorly managed industry. Most of the proposals are based in the idea of using government mechanisms to protect newspapers against competitors and to create markets for newspapers offline and online.
The FTC’s staff ignores the fact that most newspapers are profitable (the average operating profit in 2009 was 12%), but that their corporate parents are unprofitable because of high overhead costs and ill-advised debt loads taken on when advertising revenues were peaked at all time highs. It also fails to make adequate distinction between longer term trends affecting newspapers and the effects of the current recession. The staff thus blends the two together to give a skewed picture of the mid- to long-term health of the industry.
Policy alternatives suggested by the staff for consideration include:
- Limiting fair use provisions of copyright and providing new protection for “hot news,” which would give first news organizations to distribute a story a proprietary right to the facts in their article
- Providing a variety of types of subsidies for news providers
- Changing tax exempt status laws to make it easier to obtain not-for-profit status and funds from charitable donors
- Taxing advertising, spectrum, internet service provision, consumer electronics, and cell phones to provide funds for news organizations
- Creating new antitrust exemptions allowing price collusion and market division
It is hard to ignore the irony and incongruities of a government agency whose purpose is to protect competition and effective markets suggesting anti-competitive practices and taxes that will have negative effects on consumers, competitors, and other companies. Setting those aside, however, none of the suggestions deal with the real underlying economic and financial problems of the news industry: that fact that many consumers are unwilling to pay for the kinds of news provided today and that news organizations need to radically change their management practices and begin reducing organizational inefficiencies.
If commercial news enterprises can’t effectively manage themselves, compete in markets for their products and services, or find effective business models for themselves, why does anyone think that bureaucrats in the government have any ability to solve those problems for the news industry?
Wednesday, March 31, 2010
Outsmart Your Competition And Win Big
Jim Champy, one of the leading thinkers in business, author of the best-selling Reengineering the Corporation, then chairman of Perot Systems consulting practice, and head of strategy, identifies eight powerful ways to compete in the roughest marketplace and reignite growth in his book: Outsmart! How to do what your competitors can't.
How to reignite growth by…
• Breaking free of mental legacies
• Changing your frame of reference
"There is not much new in management, but there is a lot new in business." - Champy
Here are some of the key nuggets on leadership & innovation from this must-read book:
1. Companies that outsmart the competition, i.e. Outsmarts, look for dramatic growth, while incumbent businesses i.e. Incumbents are content with incremental growth. Think disruptive innovation...
2. For Outsmarts, growth is about ambition
3. Outsmarts make strategic choices based on intuition, whereas Incumbents often get bogged down in research and analysis
4. Outsmarts stay focused on what they do best, while Incumbents searching for new ideas end up losing their sense of purpose in the process
5. Outsmarts focus on how they can better serve customers; Incumbents focus on their competitors
6. Outsmarts accept risk as a normal part of doing business. Incumbents are risk averse, and risk taking hampers progress
7. Outsmarts have a culture that values and freely promotes innovation. Incumbents subject innovation to a cumbersome process. Innovation must be deeply embedded in a company's culture and encouraged at every turn. Think innovation blockers.
8. Outsmarts depend on culture to manage behavior. Incumbents use rules and controls.
9. Outsmarts engage all their people in constructing and executing strategy. At Incumbents, strategy is an abstraction for most people.
10. Just do it! Taking a page out of Nike...
Reviews
"Champy provides case studies of eight exemplary companies, each highlighting a valuable insight for discovering opportunities. Each vignette describes a different business environment, making the book widely applicable. It differs from most innovation books (e.g., the highly regarded The Game-Changer, by A. G. Lafley and Ram Charan, 2008) by its external orientation. Champy recommends studying the environment first, then changing the firm to address newly discovered opportunities, which is opposite to the strategy presented in The Game-Changer." Summing Up: Highly recommended. Upper-division undergraduate and graduate students as well as practitioners. -- J.J. Janney, University of Dayton (Reviewed in 9/2008 CHOICE)
“Champy’s engaging prose, fascinating success stories, penetrating reflections, and provocative challenges to the status quo capture your full attention from the first page to the last and leave your mind swirling with new thoughts about how to exploit opportunities in a very different world.”
– Ray Stata, Founder and Chairman of the Board, Analog Devices, Inc.
“To outsmart or be outsmarted, that is the question in modern business. Jim Champy has found the answer, in fact many answers, by looking inside amazingly successful companies. And he tells their simple stories in this book that is so delightfully short it can be read on one flight.”
– Dr. Robert “Bob” Metcalfe, General Partner, Polaris Venture Partners
“In this remarkably readable and incisive book, Jim Champy provides case studies of fast growing, innovative companies that have created and implemented successful strategies that are practical, market tested, and reproducible in today’s global marketplace.”
– Denis A. Bovin, Vice Chairman, Investment Banking, Bear Stearns & Co., Inc.
“This book shows how to spot opportunities in a world that looks, at times,
like everything is done. Jim has strung together nine pearls that reveal the essence of entrepreneurship.”
– Gururaj “Desh” Deshpande, Founder and Chairman, Sycamore Networks, Inc.
This concise, fast-paced book shows how you can achieve breakthrough growth by consistently outsmarting your competition. Champy reveals the surprising, counterintuitive lessons learned by companies that have achieved super-high growth for at least three straight years. Drawing on the strategies of some of today’s best “high velocity” companies, he identifies eight powerful ways to compete in even the roughest marketplace. You’ll discover how to find distinctive market positions and sustainable advantages in products, services, delivery methods, and unexpected customers with unexpected needs.
According to Champy, "Charles Darwin has a lot to teach. As he might put it, Businesses breed beyond available customers; Companies with successful strategies have a better chance of survival; And successful enterprises force out weaker ones, creating whole new business models."
References:
Outsmart! How to do what your competitors can't. Jim Champy.
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