Hi, Mike. I was responding specifically to this comment:
So why is Sprint allowed to sign an exclusive deal with ISP Earthlink for a ride on Sprint's broadband wireless pipe, and no ones cries for the FCC to step in? Yet everyone screams when AT&T does the same with ISP Excite@Home. Or even the Time Warner deal with RoadRunner brings complaints.
My (rather terse--sorry) reply addressed a couple of thoughts:
ATT's long distance market share is a lot bigger than Sprint's, so naturally the T will get looked at more. I had remembered that the original uproar to the ATT/@home agreement was to their wireline service. Maybe I'm remembering this wrong?
There do appear to be several large-footprint wireless SP's: verizon, ATT, Sprint and the US GSM network (I'm going blank on the name). But, footprint is not the same as market share, of course. ATT's position in wireline long distance will earn it the glare of anti-trust scrutiny for awhile. I won't address the broadband sats, which remain immature, imo, until Ka-band comes live.
My understanding of anti-trust policy is that monopolies are allowed, as unavoidable. However, monopolies operate under tighter constraints than non-monopolies. (This is why in the Microsoft case, the "finding of fact" that msft is a monopoly was so important) One constraint is their ability to enter into exclusive agreements, because exclusive agreements have such a chilling effect on competition. Who cares if two minor players enter such an agreement, if it improves their competitive position against some larger players? But, what would happen to the market if Bell Atlantic (the local POTS monopoly) had been allowed to enter an exclusive agreeement with ATT as the sole long distance provider? (Hey, we would have been back to pre-breakup!)
On your second series of questions: Cross-ownership is only one issue. As Sprint becomes part of WCOM, they're going to be required to divest some of their assets. If Earthlink was dominant in the ISP space (creating a vertical dominant player, given WCOM's position in the backbone), I'd think it would be an issue. However, Earthlink isn't dominant. AOL isn't quite dominant either, but they are the largest. My bet is that any large equity investment they make will get scrutiny, especially since Time Warner is the largest content provider.
It's not the same as GM and Goodyear. There's little network effect in the auto industry. That's why the car makers have been divesting their parts businesses, and are becoming more and more "assemblers". A lot of work is being done in developing a legal structure to deal with the anti-trust impact of network effects, especially for high-tech companies. The question is whether an ATT/ Excite@Home tie-up would create huge barriers to entry for others. Would ATT or Excite@Home suddenly have a superior competitive position to other ISP's? I dunno. Some people seem to think so. I'm too tired to decide if they're right. :o)
Edit: Sprint owns 14% of Earthlink. |
