Month: September 2011

Attention DEFCON planners! I’m your huckleberry!

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Sometime last week the @_defcon_ twitter account of the Defcon annual hacker’s convention put out this tweet:

“who should we invite to DC 20 as a special guest? Which actor, Sci-fi writer, famous scientist, or uber hacker, who would you like to see?”

So I immediately responded that they should invite me. (Or, failing that Donald Knuth or George Church.) As far as I can tell, only a few other people responded to the tweet.  Suggestions included David Hasselhoff & Douglas Hofstadter. (There’s probably more discussion going on over on the Defcon Forums. . . remind me to check that out.)

But as much as I would love to hear Knuth or Church speak (among others) I really do think they should make me John Sundman the Defcon 20 special guest. Why? See below the fold. Continue reading

A Pocket Guide To What Happens Now That Network Neutrality Rules Are Officially Published.

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Hey everyone, remember back at the end of last year when the Federal Communications Commission (FCC) adopted the better-than-nothing-but-still-painfully-disappointing Network Neutrality rules? Well, after a long and winding road, which included bouncing back and forth between the FCC and the Office of Management and Budget a few times and a premature challenge by Verizon, the rules were finally published in the Federal Register today. So without getting into the merits, here is what to expect procedurally.

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Quick Thoughts on Today’s Status Hearing in United States v. AT&T

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By all accounts, the main event on the status hearing was — as expected by lawyers — fairly boring. I am not sure why some folks think that splitting the difference between AT&T and the DoJ on timing was a win for AT&T (AT&T wanted January 16, DoJ wanted March 19, Judge picked Feb. 13).  It is, I suppose, consistent with those who thought picking the later date would be a sign the judge wanted a settlement. i.e., there are those who just can’t believe AT&T is going to win this and therefore everything is somehow an advantage to AT&T no matter how it turns out.

The more interesting note was the decision not to join Sprint and Cell South’s complaints to the DoJ case and setting a date for AT&T to file a motion to dismiss. That was a modest victory for AT&T, but not terribly indicative of where the DoJ case is going. It is rare for private litigants to file to enjoin a merger, and antitrust commentators have noted the trend in the last 10 years to make private antitrust cases more difficult to bring as a matter of standing. I suspect if Sprint and Cell South survive the motion to dismiss on standing grounds the cases get joined, as they are related cases. But it also would not surprise me if Sprint and Cell South get dismissed on standing. As will no doubt be lost on everyone if that happens, it won’t really tell us one way or another about the merits.

All in all, pretty much what one expects in such a case — although I feel bad for the DoJ lawyers who just lost their Christmas and New Year holidays. Be interesting from a legal perspective to see how the motion to dismiss goes. Meanwhile, we await the FCC.

Stay tuned . . .

Why AT&T Can’t Just Cut A Deal With Leap or MetroPCS and Call It A Day

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The latest AT&T ploy to convince the gullible that it’s planned acquisition of T-Mobile remains TOTALLY AND COMPLETELY ON TRACK and that everyone should just ignore the minor little tiff it has with the Department of Justice (and 7 State Attorneys General) involves pretending to pick potential rivals as recipients of any divestiture agreement. I say “pretending” because AT&T has either conveniently forgotten that such transfers need FCC approval or has reassured everyone involved that the FCC will rubberrstamp any settment AT&T negotiates. My personal theory is that AT&T’s “outreach” to supposed potential buyers is solely for theatrical effect so it can claim to be in “negotiations” with “interested parties” at the upcoming status conference.

In any case, AT&T’s claims to be negotiating such settlements should be greeted with a healthy dose of skepticism, and not merely because the sources for this story are “two people with direct knowledge of the situation” who refuse to be identified. The sheer regulatory mechanics of such a settlement make it highly improbable, if not outright impossible for AT&T to negotiate and get approval for such a settlement before T-Mobile can claim its break up fee.

I explain in greater detail below . . . .

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What’s At Stake in United Stated v. AT&T, Inc.? The Future of Antitrust. (Part I)

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The Department of Justice (DoJ) Antitrust Division challenge to the AT&T/T-Mo deal, United States v. AT&T, Inc., in addition to being a huge deal for us in the telecom world, is probably the single most important merger review case for the next ten years. In two ways, this has become a battle about the future of antitrust enforcement and the soul of the Antitrust Division.

Yes, that sounds melodramatic, but I make no apologies. As I explain below, this case has become a test case for the nature of antitrust and whether traditional metrics of concentration and market share, notably the Herfendahl-Hirschman Index (“HHI”), coupled with the concerns that such concentration predicts both the ability of the largest company to raise process and for all surviving companies to raise process (the “coordinated effects” test), will still have validity going forward.  If the court accepts the arguments from AT&T and its defenders that the traditional measures of concentration are irrelevant, then antitrust review of mergers will essentially end for the next 5-10 years while economists and antitrust enforcers struggle to develop a new set of metrics for predicting the likely impact of mergers.

More importantly, however, this case represents a clear decision of the Antitrust Division to move ahead with enforcement despite the possible political consequences. Yes, politics has always mattered, and anyone who rises to the position of Assistant Attorney General for Antitrust has a well-developed political sense. The back channels for unofficial influence remain strong, and only a brave head of the Antitrust Division, whether or Acting or confirmed Appointee, seeks to challenge the most powerful and well connected companies in Washington.

But we have not yet reached the point where the head of the Antitrust Division decides to enforce the Antitrust law and the White House tries to pull it back. This may seem a small thing, but it is what separates us as a country that can still aspire to say it follows the rule of law and a country like Russia where  law enforcement is simply the extension of the policy of the ruling oligarchy. And I assure you, oh cynical reader, that when we cross that threshold you will know the difference between a society where influence matters and a society that has abandoned any pretense of the rule of law.

I shall reserve this second point for a separate post. I address the legal significance of the case below . . .

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