Catalyst Radio News Analysis

News Analysis for May 15th, 2009

Tom - The Obama administration signaled earlier this week that it would take an aggressive stand against companies that engage in anti-competitive behavior, reversing looser policies of the past eight years that critics called friendly toward big firms. Christine Varney, head of the antitrust division at the Justice Department, announced that the agency would revoke a 2008 report that made it difficult to pursue antitrust cases against corporations. She said the guidelines and lax enforcement over the past decade helped contribute to the economic crisis. While the administration's new enforcement would affect all industries, many antitrust experts said some of the more controversial cases are expected to arise from the fast-evolving high-tech and telecom worlds.

Linda - During the Bush administration, nearly every high-tech and telecommunications merger before the antitrust division at the Justice Department was approved, including last year's controversial union of the nation's two sole satellite radio service providers, Sirius and XM. After a lengthy battle with the Justice Department, the software giant Oracle won approval in 2005 for its merger with PeopleSoft. Also that year, AT&T and Verizon Communications snapped up dominant market shares after mergers with BellSouth and MCI, respectively. Critics said that under Bush the enforcement of antitrust violations shifted overseas to European and Asian nations that were said to be more aggressive in investigating allegations.

Tom - This week, the European Commission is expected to decide whether to fine Intel over allegations that it used its dominant position in the semiconductor market to deter customers from buying chips from Advanced Micro Devices. The European antitrust regulatory body will next month also look into allegations that Microsoft tied its Web browser to its dominant operating system software, edging out rivals. Public interest groups said consolidation in the high-tech and telecom industry has left consumers with fewer choices for cellphones and service providers, less innovation, and higher prices for broadband Internet and wireless services than in many other nations.

Linda - In a story we have been reporting on for several weeks, Roxana Saberi, a 32-year-old Iranian-American journalist detained in Iran more than three months, was freed on Monday after an appeals court suspended her eight-year sentence on espionage charges. The court upheld the spying charges against Ms. Saberi, but reduced the sentence to a two-year suspended prison term, according to her lawyer. Ms. Saberi is banned from working as a journalist in Iran for five years, but is permitted to leave the country. Ms. Saberi's arrest had become a thorny issue between U.S. and Iran. The two nations have no diplomatic ties, but have engaged in talks to improve relations and have held high-level meetings on Afghanistan. According to Mr. Khorramshahi, the judges explicitly stated in their verdict that Ms. Saberi could be released because "there was no animosity between Iran and the United States."

Tom - Ms. Saberi was unexpectedly released Monday afternoon from the notorious Evin detention facility, where Iran jails its political prisoners, and was reunited with her Iranian father and Japanese mother. She didn't immediately go to her home in Tehran, but instead was taken to a friend's home to avoid reporters. Ms. Saberi, who was born in New Jersey and grew up in Fargo, N.D., moved to Iran six years ago to work as a foreign correspondent. In April, she was tried in Iran's Revolutionary Court behind closed doors and sentenced to eight years. Secretary of State Hillary Clinton said she was "heartened" by Ms. Saberi's release but that the U.S. continued "to take issue with the charges against her and the verdicts rendered."

Linda - The U.S. Federal Trade Commission may start enforcing net-neutrality rules and take action against bad network management practices when broadband providers don't live up to the promises they make to consumers, the agency's chairman said. This past Saturday, FTC Chairman Jon Leibowitz said on the C-SPAN that Broadband providers need to inform consumers about the download speeds they're delivering and the types of network management practices they're deploying. Leibowitz noted that if a broadband provider blocks Web content that competes with its own content or a partner's content, that could also raise "antitrust problems," potentially prompting FTC action. Leibowitz's view on the FTC role on net neutrality and network management issues would mark a change for the agency. Until now, the U.S. Federal Communications Commission has handled any net-neutrality complaints, and in mid-2007, the FTC issued a report suggesting U.S. lawmakers should proceed with caution before passing new net-neutrality rules.

Tom - Asked about the change of attitude, Leibowitz said net neutrality is a consumer protection issue, and consumer protection is one of the main functions of the FTC. Leibowitz also said he hopes people on both sides of the net-neutrality debate can come to comprise agreement about consumers' right to the Web content of their choosing. Groups on both sides seem to be "heading in the right direction," he said. A spokeswoman from Comcast, one of the largest broadband providers in the U.S., didn't have a comment on Leibowitz's statements on net neutrality. Spokespeople from Verizon and AT&T didn't immediately respond to a request for comments. The FCC, in August 2008, ruled that Comcast could not slow some peer-to-peer traffic in the name of network management. Comcast's network management practices violated an FCC policy statement saying broadband customers had a right to access the legal Web content of their choice, the FCC ruled.

Linda - In international media news, the Israeli police on Monday closed down an official Palestinian media center that had been set up in East Jerusalem for the visit of Pope Benedict XVI, as Israel and the Palestinians competed to exercise authority in the contested part of the city. As the pope arrived in Jerusalem, each side accused the other of exploiting his visit for political gain. Though the pope’s movements have been carefully choreographed to avoid obvious political minefields, every step and word was bound to be closely scrutinized. Israel has hoped to fend off any open challenge to its rule over Jerusalem during the pope’s visit, while Palestinian officials said they were worried that the pope would be put into situations that implied de facto acceptance of the Israeli annexation. The Palestinians want East Jerusalem to be the capital of a future Palestinian state. Israel captured East Jerusalem from Jordan in the 1967 war and annexed the territory containing some of the holiest sites for Christians, Muslims and Jews. The annexation was never recognized abroad.

Tom - The Palestinian media center was closed on the order of the Israeli minister of internal security, citing a clause in a 1994 law banning all activity of the Palestinian Authority in Jerusalem or elsewhere “in the state of Israel.” Official Palestinian activities in Jerusalem have been similarly barred in the past. Rafiq Husseini, the chief of staff to Mahmoud Abbas, the Palestinian president, said Israel was trying to keep the Palestinians’ “mouths shut about how the city has been occupied and is still occupied.” He said the Palestinians were determined to “ensure that the pope understands he is coming to an occupied city.” Yigal Palmor, a spokesman for the Israeli Foreign Ministry, said in response that it was “really sad to see how some Palestinians will do anything to politicize this visit.” The Palestinian media center held its first event at the Ambassador Hotel on Sunday, distributing background material for the papal visit and hosting a news conference whose speakers included Mr. Husseini and the Palestinian Authority’s tourism minister, Khouloud Daibes.

Linda - In a new report, the media activist group Free Press examines the current state of broadband in the U.S., finding that in 2000, the U.S. ranked 5th worldwide in broadband penetration, with 2.5 broadband lines per 100 residents. At the time, the No. 1 country was South Korea, with 8.4% penetration. By 2007, however, the U.S. had slipped to 22nd place, with 21.5 broadband lines per 100 residents, lagging behind countries such as Bermuda (36.7), South Korea (30.6) and Japan (22.5). Not only do penetration rates lag, but service in America is also more expensive and slower than in many other countries. The average U.S. price is $53 per month -- more expensive than in 21 other countries -- while average advertised download speed is 8.9 Mbps, slower than 13 others. By comparison, Finland offers the cheapest service at $31 a month (with advertised download speeds of 13 Mbps), while the fastest country is Japan, with an average advertised downstream of 93.7 Mbps (for $34 a month).

Tom - Free Press says that "massive policy failures" over the last eight years are to blame for these statistics. Among others, the broadband advocacy group points to a decision by regulators to classify broadband as an "information service" rather than a communications service. That move meant that ISPs no longer had to offer wholesale broadband to competitors -- which dealt "an immediate blow to third-party ISPs like Earthlink that relied on reasonable wholesale rates" and "ensured that U.S. consumers would be at the mercy of a duopoly marketplace," the report states.

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