• On March 30, Microsoft announced that it will accept the main changes demanded by the European Union’s antitrust regulators and will remove its Media Player software from the Windows computer-operating system. Under the agreement, Microsoft also will offer a software package that allows consumers to restore the settings and other programs that were removed from the Media Player-free version. The European Commission had announced on March 24 it was rejecting Microsoft’s proposal to limit an independent trustee’s authority to monitor that company’s compliance with European antitrust sanctions. A Microsoft spokesman said the Commission’s demands about naming a “monitoring trustee” to referee technical questions were unclear. “The commission has been telling the [European Court of First Instance] in Luxembourg one thing about how the trustee will work and then telling Microsoft something different.”
  • March 29th was Internet Day at the Supreme Court, as the Court considers two cases that could have a profound effect on the future of the Internet. The first case, MGM v. Grokster, is about copyright law and whether file-sharing companies should be held liable for the copyright infringement of their users. The case is shaping into a fight over Hollywood’s investment in artistic creation verses engineers’ freedom to innovate. The second case, National Cable and Telecommunications Association v. Brand X Internet Services, is about the FCC’s regulatory classification of high-speed Internet service over cable modems. The justices will decide whether such service should be dubbed a “telecommunications service” subject to rules governing telephone companies or a largely unregulated “information service.” The cable industry urged the Supreme Court to uphold FCC rules designed to keep cable-modem service deregulated and free from old-style telephone-company access mandates. The Internet-service providers argued that they want mandated access to cable’s high-speed platform to ensure that a network owner can not rob the Internet of innovation and competition by excluding rivals. The case will turn on whether or not the high court concludes that the FCC should enjoy the latitude to shape communications policy to conform with the deregulatory goals of Congress that were established in the Telecommunications Act of 1996. No constitutional issues are involved. The widespread availability of digital information over a common set of Internet protocols makes both cases about much more than just contributory copyright infringement or the decisions of the FCC. Both are about the architecture of the Internet and whether its interconnecting networks will remain open or allow industry forces to push them in a closed direction.
  • It was reported on March 25 that AT&T’s decision to merge with SBC Communications (“SBC”) was driven by changes in technology and regulation, according to AT&T’s CEO. AT&T Chairman and CEO David Dorman said that the new entity would lead to “healthy and sustainable competition” that benefits customers. His company’s merger proposal, as well as the likelihood that MCI will be acquired by a regional Bell company besides SBC, means that “undoubtedly we are going to see more competition. . . . . These mergers will drive another level of competition in business services. It is necessary and inevitable to deal with the post-bubble meltdown we have seen” Dorman said at an American Enterprise Institute conference. The proposed merger between AT&T and SBC is pending before the Justice Department’s antitrust division and at the FCC. Dorman said that because AT&T exited the consumer business in July, there is no need to impose antitrust conditions on the merger, including any rules that might require SBC to offer its competitors access to its digital subscriber lines to sell high-speed Internet service.
  • It was announced on March 23 that Chile’s Supreme Court approved the merger of local cable-television providers VTR and Metropolis, BNamericas.com reports. The move supports a decision the anti-monopoly tribunal TDLC made close to five months ago. TDLC’s original approval of the merger included 11 restrictions but still disgruntled lawyers Bosco Martinez and Marcial Mora, who, on behalf of the Chilean consumers, argued that the approval is no different than the approval of a monopoly that is unconstitutional. The united companies would hold an 88 percent share of the nation’s cable market. CristalChile Comunicaciones, which owns 50 percent of Metropolis Intercom, said the lawyers should not have been allowed to appeal because they were not part of the process and therefore should refrain from interfering.

Authored by
Gregg Mendenhall