Business Week’s Arik Hesseldahl has this piece about just how much bandwidth consumers need, an evergreen question bandied about by broadband providers and technology observers alike. To me this has always been a relatively silly question — consumers want, and entrepreneurs will leverage, as much bandwidth as you can give them.
Remember when 56k modems came out, twice the speed of the old 28.8k modems, and everybody was overjoyed by the doubling of capacity? Now, skeptics doubt whether 100 Mbps download Internet rates would ring anybody’s bells. Arik asks whether anyone cares if an iTunes song downloads in 2 or 10 seconds.
But once you have 100Mbps or more available at home, what the heck are you going to do with all that bandwidth? For the average consumer, 6Mbps should more than suffice for today’s typical needs, whether it’s downloading music, watching the occasional video, or even running a home network that lets two or three computers do the same all at once. Does anyone really care whether that song download from iTunes (AAPL) takes 10 seconds or 2 seconds?
Well, yes, I care, and I suspect everybody else cares too. Those additional eight seconds can seem like an eternity.
As Arik points out, gaming and video services can quickly fill up whatever bandwidth is made available. And who knows what might emerge in a world where everybody has 100 Mbps service. Broadband capacity is the veritable field of dreams and there’s no such thing as too much bandwidth.
Posted by Cynthia Brumfield at 9:33 AM | Print | Comments (1)Google’s $3.1 billion acquisition of DoubleClick is in the midst of the Hart-Scott-Rodino antitrust review process and according to this piece in the New York Times, the FTC and not the DOJ has taken the reins on this one. By law either agency can conduct the necessary antitrust review and some consumer groups are cheered by the fact that the FTC, which also oversees privacy matters, is reviewing this merger.
The merger of the two giants sparks fears among public interest groups that the combination of Google’s database of search histories with DoubleClick’s database of website visits would put too much information in the hands of one company.
But, as one expert cited in the article points out, privacy is, strictly speaking, not an antitrust matter.
“To the extent that a reduction in competition could make it more difficult to protect privacy, it could be a consideration,” said Andrew I. Gavil, a law professor at Howard University. “But it would have to be linked to competition. Strictly speaking, privacy is not an antitrust issue.”
The law and economic theory surrounding antitrust reviews is robust. The antitrust divisions of the DOJ and FTC are widely praised for the very high quality of the attorneys and economists who work there. Their mission, guided by the well-vetted and econometrically tested theories and analyses of competition, is to make sure competition is not diminished. Period.
Despite the joy of the consumer groups, it’s probably pretty unlikely that the FTC, even though it holds responsibility for privacy matters elsewhere within the agency, will factor fears of privacy invasion into their reviews. That’s just the nature of antitrust analysis.
Moreover, the fact that the FTC has opened “an investigation,” which I take to mean that the FTC has issued an initial request for information on the deal, means little at this stage of the review. In a merger of this size and complexity, it would be very surprising indeed if the FTC didn’t ask for more information — that’s pretty routine for all big deals. (The only other possible outcome at this stage would have been for the FTC to allow a 30-day review period to expire without a request for additional information, meaning the merger simply sailed through without any questions at all.)
The bigger problem for the deal would be a time-consuming, costly and generally dreaded “second request” for information, meaning that the Google-DoubleClick merger raises some truly knotty issues. Until the FTC ratchets its review to this level, the “antitrust investigation” into the deal is much ado about nothing.
Posted by Cynthia Brumfield at 8:48 AM | Print | Comments (0)
Blogs We Read
