Blog - Page 67

The Internet has already deeply affected business models across the spectrum, from supply-chain management to consumer level e-commerce. But it will take real broadband to truly disrupt the visually oriented movie, television, and education industries. James Surowiecki of the New Yorker, in “Disk Averse,” adds to the growing literature focusing on the “Long Tail” economy. Last fall Wired editor Chris Anderson wrote a groundbreaking article by that name showing that digitally oriented content sellers, who were not constrained by the physical scarcities of shelf space or spectrum, earned between 25 and 50 percent of their profits from unpopular products. The volume of niche content (books, movies, songs) is so large, Anderson showed, that it matches or excels the sales and Read More ›

Holman Jenkins writes in today’s WSJ that IPTV faces death in the need for Bells to win 33,000 separate cable franchise approvals in order to provide the service. The bad news is that there is another hurdle that could prove equally if not more constraining: Section 104 of the 1996 Telecom Act, which bars electronic redlining, a term Jenkins wrongly attributes to cable lobbyists. Actually, the NAACP coined it in the early 1990s. In the event, sec. 104 inserts “without discrimination on the basis of race, color, religion, national origin, or sex” after the phrase “to all the people of the United States” in section 1 of the original 1934 Communications Act. Read literally this means Baptists must get service Read More ›

When I was in Shanghai in the fall of 2003, I met with Jack Ma, the fast speaking Chinese entrepreneur who founded Alibaba.com. At the time, as we met atop the world’s tallest hotel, the Grand Hyatt Shanghai in the Jin Mao Tower, Alibaba’s chief business was an online supply-chain platform that connects China’s many thousands of manufacturers, component and commodity handlers, and import-exporters. Now Alibaba also competes with eBay with a consumer online auction site and online payments (a la PayPal). Today, Yahoo! is paying $1 billion for a 35 percent stake in Alibaba and will turn its Chinese operations over to Alibaba. eBay and Barry Diller’s Interactive Corp. had already made deals to enter the Chinese ecommerce market. Read More ›

The Federal Communications Commission’s August 5 decision deregulating Digital Subscriber Line, thus giving DSL regulatory parity with cable Internet service, and ending the Computer Inquiry Rules (some of which date back nearly 30 years) is a welcome sign indeed, surprising in both its quick action and its breadth. That the FCC acted so swiftly despite a Supreme Court ruling (the “Brand X” case) giving the FCC carte blanche to continue treating DSL more harshly than rivals, attests that Chairman Kevin Martin, he of the 2003 swing vote for state broadband prerogatives, is a genuine convert to real deregulation. The reluctant acquiescence of the agency’s two Democratic commissioners attests to growing Beltway realization that Asia is bypassing US in the race Read More ›

Somehow FCC chairman Kevin Martin got a unanimous 4-0 vote to reclassify DSL as an “information service,” largely freeing it from legacy telephone regulation. After the recent Supreme Court Brand X ruling, Martin said deregulatory moves would be forthcoming, but this is quick action. The FCC also issued a policy statement on “net neutrality,” however, that could open up vast new realms of regulation and must be closely watched. Two steps forward, one step…we’ll see. -Bret Swanson

Globalization scholar Jagdish Bhagwati this morning takes on Tom Friedman’s “Flat Earth” metaphor. The Earth is not flat, writes Bhagwati, author of last year’s In Defense of Globalization, but “kaleidoscopic.” Bhagwati thinks Friedman’s analogies are too simplistic, that flat and round don’t accurately convey the diversity of the global economy, and that China and India still have a long way to go to match Western sophistication and wealth. No doubt, Bhagwati is right in some of his particular criticisms. Friedman’s overuse of analogies makes him vulnerable to such charges of over-generalization. Nevertheless, Friedman’s basic premise of a highly integrated and connected world economy stands. The funny thing to me and my supply-side friends is that this has been the foundation Read More ›

More evidence of the intense competition selling communications services in the small and medium-sized business market. Finally realizing this, the FCC apparently is about to vote on the elimination of the DSL line-sharing rules that have depressed telecom investment in the U.S.

There Tom Friedman goes again. This morning, in “Calling All Luddites,” Friedman offers a perfect example of his frequent, curious, and infuriating tendency to find an important topic, report on it with keen and witty observations, and then offer exactly the wrong solution to the problem. The best example of this is his good handle on globalization and the competitive pressures it puts on Americans and American businesses (he’s written two books on the subject). A very big, important topic, the essence of which Friedman captures for a popular audience better than most. Friedman’s solution? Raise tax rates on entrepreneurs and investors! Same thing this morning. He identifies a key shortcoming — America’s lagging communications capabilities compared to our international Read More ›

Why is 2004 economics Nobel laureate Ed Prescott so optimistic [registration required at Wall Street Journal] about Western Europe’s economic propects over the next decade? Because things are so bad, he writes, even most French and German politicians now realize they must change their ways. Prescott has done key research on the effects of taxes on labor markets and has shown virtually the entire difference between hard working Americans and liesurely Europeans can be explained by Western Europe’s high tax rates. Although Prescott’s Journal op-ed today does not mention Princeton professor and New York Times columnist Paul Krugman by name, the article seems a direct refutation of Krugman’s attempt last week to paint France’s high unemployment rate, low productivity, and Read More ›

Good insights and advice on U.S.-China relations from James McGregor.