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Antitrust:  How To Survive and Prosper In a Hostile Market and Judicial Environment Von.x Pre-Conference 17 March 2008 San...
Panelists <ul><li>Glenn Manishin </li></ul><ul><ul><li>Duane Morris LLP </li></ul></ul><ul><li>Mark Ostrau </li></ul><ul><...
Outline <ul><li>Price Squeeze Claims </li></ul><ul><li>Standards & Antitrust </li></ul><ul><li>VoIP, Broadband & Antitrust...
Price Squeeze Claims  <ul><li>Trinko ,  Covad ,  LinkLine   </li></ul><ul><li>and Beyond </li></ul><ul><li>(Al Pfeiffer) <...
Basic Price-Squeeze Theory <ul><li>Key Assumptions: </li></ul><ul><li>Incumbent controls key input with no effective sub- ...
The Uncertain Impact of  Trinko <ul><li>Trinko  did not deal directly with price squeeze claims, but recognized broad righ...
The  Covad  Rulings <ul><li>Covad v. Bell Atlantic </li></ul><ul><li>398 F.3d 666 (D.C. 2005) </li></ul><ul><li>407 F.3d 1...
The  LinkLine  Ruling <ul><li>Distinguished between fully reg-ulated POTS markets and partially-deregulated DSL market </l...
Key Questions For Plaintiffs <ul><li>Fight or Negotiate? </li></ul><ul><ul><li>Late ‘90s track record favors fighters </li...
Standards & Antitrust <ul><li>Developing, Setting or Adopting Standards </li></ul><ul><li>(Mark Ostrau) </li></ul>17 March...
Overview <ul><li>Generally pro-competitive:  </li></ul><ul><ul><li>Increased efficiency, interoperability, lower barriers ...
What to Look For in an SDO/SSO <ul><li>Membership:   Open, with multiple constit-uencies </li></ul><ul><li>   Beware mark...
Handling IP – Play Fair or Else  <ul><li>Don’t  fail to disclose relevant IP  </li></ul><ul><li>   Dell      UNOCAL    ...
VoIP, Broadband & Antitrust <ul><li>What Is  ―  or Should Be  ―  the  </li></ul><ul><li>Role of the Federal Trade Commissi...
Overview <ul><li>Jurisdictional Issues  ―  FCC Regulation; Common Carrier Exclusion </li></ul><ul><li>Antitrust </li></ul>...
The FTC & Consumer Protection <ul><li>Privacy Ventures  ―  Do Not Call List </li></ul><ul><li>Deceptive Billing and Advert...
The FTC, Antitrust & Competition <ul><li>Merger Reviews, e.g., Time Warner </li></ul><ul><li>Bundling?  Privacy? </li></ul...
Antitrust & Related Litigation <ul><li>Survival in a Hostile Market  and Judicial Environment Requires Attentiveness to Ev...
Achieving Business Objectives <ul><li>Set goals and consider multiple and complementary ways to achieve them. Consider: </...
Media and Content: Bundling and Access <ul><li>FCC considering whether: </li></ul><ul><ul><li>programmers must sell each n...
Media Ownership Issues <ul><li>Cross-ownership rules — newspapers, TV stations, cable, etc. </li></ul><ul><li>Congressiona...
Bottlenecks and Miscellaneous <ul><li>FCC bans exclusive access by cable providers to MDUs </li></ul><ul><li>Antitrust cas...
Some (Unanswered) Questions <ul><li>Can successful price squeeze claims be presented in real-world trials? </li></ul><ul><...
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Von.x Antitrust Panel

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Transcript of "Von.x Antitrust Panel"

  1. 1. Antitrust: How To Survive and Prosper In a Hostile Market and Judicial Environment Von.x Pre-Conference 17 March 2008 San Jose
  2. 2. Panelists <ul><li>Glenn Manishin </li></ul><ul><ul><li>Duane Morris LLP </li></ul></ul><ul><li>Mark Ostrau </li></ul><ul><ul><li>Fenwick & West LLP </li></ul></ul><ul><li>Al Pfeiffer </li></ul><ul><ul><li>Latham & Watkins LLP </li></ul></ul><ul><li>Harvey Saferstein </li></ul><ul><ul><li>Mintz Levin et al. LLP </li></ul></ul><ul><li>David Turetsky </li></ul><ul><ul><li>Dewey & LeBouef LLP </li></ul></ul>17 March 2008
  3. 3. Outline <ul><li>Price Squeeze Claims </li></ul><ul><li>Standards & Antitrust </li></ul><ul><li>VoIP, Broadband & Antitrust </li></ul><ul><li>Antitrust & Related Litigation </li></ul><ul><li>Some (Unanswered) Questions </li></ul>17 March 2008
  4. 4. Price Squeeze Claims <ul><li>Trinko , Covad , LinkLine </li></ul><ul><li>and Beyond </li></ul><ul><li>(Al Pfeiffer) </li></ul>17 March 2008
  5. 5. Basic Price-Squeeze Theory <ul><li>Key Assumptions: </li></ul><ul><li>Incumbent controls key input with no effective sub- stitutes </li></ul><ul><li>Incumbent charges entrant more than its own input cost </li></ul><ul><li>Input costs result in raising entrant’s total costs above retail price </li></ul><ul><li>Equally (or more) efficient competitor excluded </li></ul>17 March 2008
  6. 6. The Uncertain Impact of Trinko <ul><li>Trinko did not deal directly with price squeeze claims, but recognized broad right to refuse to deal altogether </li></ul><ul><li>Price squeeze claims were recog-nized under pre-1996 Act antitrust law </li></ul><ul><li>Has led to split among Circuit Courts, in a series of cases arising from DSL carriers’ claims against RBOCs </li></ul>17 March 2008
  7. 7. The Covad Rulings <ul><li>Covad v. Bell Atlantic </li></ul><ul><li>398 F.3d 666 (D.C. 2005) </li></ul><ul><li>407 F.3d 1220 (D.C. 2005) </li></ul><ul><li>Rejected Covad’s price squeeze claim </li></ul><ul><li>If incumbent can refuse to deal, it can price as it wants </li></ul><ul><li>Predatory pricing claims still viable </li></ul><ul><li>Covad v. BellSouth </li></ul><ul><li>374 F.3d 1044 (11th 2004 ) </li></ul><ul><li>Price squeeze claims remain potentially viable after Trinko </li></ul><ul><li>Upheld Covad’s price squeeze claim </li></ul><ul><li>But found must be tied to predatory pricing by incumbent </li></ul>17 March 2008
  8. 8. The LinkLine Ruling <ul><li>Distinguished between fully reg-ulated POTS markets and partially-deregulated DSL market </li></ul><ul><li>Price squeeze claims are viable, even without showing predatory pricing </li></ul><ul><li>Dissent: Predatory pricing should be required, but if shown, price squeeze claims viable </li></ul>17 March 2008
  9. 9. Key Questions For Plaintiffs <ul><li>Fight or Negotiate? </li></ul><ul><ul><li>Late ‘90s track record favors fighters </li></ul></ul><ul><ul><li>Public lawsuits may hurt investor confidence </li></ul></ul><ul><li>Can you file in the Ninth Circuit? </li></ul><ul><li>Can/should you allege predatory pricing, as a backup? </li></ul><ul><li>Requirements of Rule 11 </li></ul><ul><ul><li>How do you measure incumbent’s cost? </li></ul></ul>17 March 2008
  10. 10. Standards & Antitrust <ul><li>Developing, Setting or Adopting Standards </li></ul><ul><li>(Mark Ostrau) </li></ul>17 March 2008
  11. 11. Overview <ul><li>Generally pro-competitive: </li></ul><ul><ul><li>Increased efficiency, interoperability, lower barriers to entry </li></ul></ul><ul><ul><li>Facilitate comparisons, increase price competition </li></ul></ul><ul><li>But numerous antitrust hazards: </li></ul><ul><ul><li>Patent holdup </li></ul></ul><ul><ul><li>Excluding or injuring competitors </li></ul></ul><ul><ul><li>Limiting downstream competition </li></ul></ul>17 March 2008
  12. 12. What to Look For in an SDO/SSO <ul><li>Membership: Open, with multiple constit-uencies </li></ul><ul><li> Beware market power, exclusiveness, exclusivity </li></ul><ul><li>Process: Participatory, impartial, consensus-driven </li></ul><ul><li> Beware bias, subjectivity, exclusionary result </li></ul><ul><li>Implementation: Voluntary, accessible, non-exclusive </li></ul><ul><li>IP rules: Clear disclosure obligations and RAND (or better) license rules </li></ul>17 March 2008
  13. 13. Handling IP – Play Fair or Else <ul><li>Don’t fail to disclose relevant IP </li></ul><ul><li> Dell  UNOCAL  Rambus </li></ul><ul><li>Don’t violate license commitments </li></ul><ul><li> N-Data </li></ul><ul><li> Qualcomm </li></ul><ul><li>Don’t mess up the pool </li></ul><ul><li> “ Non-essential” patents, exclusiv-ity, discrimination, noncompetes </li></ul>17 March 2008
  14. 14. VoIP, Broadband & Antitrust <ul><li>What Is ― or Should Be ― the </li></ul><ul><li>Role of the Federal Trade Commission? </li></ul><ul><li>(Harvey Saferstein) </li></ul>17 March 2008
  15. 15. Overview <ul><li>Jurisdictional Issues ― FCC Regulation; Common Carrier Exclusion </li></ul><ul><li>Antitrust </li></ul><ul><li>Consumer Protection </li></ul>17 March 2008
  16. 16. The FTC & Consumer Protection <ul><li>Privacy Ventures ― Do Not Call List </li></ul><ul><li>Deceptive Billing and Advertis- ing of Services </li></ul><ul><li>Telemarketing </li></ul>17 March 2008
  17. 17. The FTC, Antitrust & Competition <ul><li>Merger Reviews, e.g., Time Warner </li></ul><ul><li>Bundling? Privacy? </li></ul><ul><li>Standards-Setting </li></ul>17 March 2008
  18. 18. Antitrust & Related Litigation <ul><li>Survival in a Hostile Market and Judicial Environment Requires Attentiveness to Every Opportunity </li></ul><ul><li>(David Turetsky) </li></ul>17 March 2008
  19. 19. Achieving Business Objectives <ul><li>Set goals and consider multiple and complementary ways to achieve them. Consider: </li></ul><ul><ul><li>Antitrust: Private litigation, mediation, possible government enforcement interest? </li></ul></ul><ul><ul><li>Other theories: contract, tort, common law, statutes </li></ul></ul><ul><ul><li>FCC proceedings, congressional interest </li></ul></ul>17 March 2008
  20. 20. Media and Content: Bundling and Access <ul><li>FCC considering whether: </li></ul><ul><ul><li>programmers must sell each network separately to cable rather than in bundles </li></ul></ul><ul><ul><li>cable must sell networks a la carte to customers or can sell in bundles or “tiers” </li></ul></ul><ul><li>Congressional committees have examined these issues and some have voted — against requiring a la carte </li></ul><ul><li>Federal class action complaint under Sherman Act §§ 1 and 2 alleging anticompetitive bundling or tying by programmers and cable </li></ul>17 March 2008
  21. 21. Media Ownership Issues <ul><li>Cross-ownership rules — newspapers, TV stations, cable, etc. </li></ul><ul><li>Congressional concerns — media concentration, diversity of voices, timing, etc. </li></ul><ul><li>Third Circuit tossed out revised ownership rules </li></ul><ul><li>Antitrust merger reviews </li></ul>17 March 2008
  22. 22. Bottlenecks and Miscellaneous <ul><li>FCC bans exclusive access by cable providers to MDUs </li></ul><ul><li>Antitrust case on building access for CLEC dismissed </li></ul><ul><li>The Twombly hurdle </li></ul><ul><li>What about MFN clauses as applied to independent programmers? </li></ul><ul><ul><li>Any different from “best terms” agreements criticized as anticompetitive by EC in business insurance competition report? </li></ul></ul>17 March 2008
  23. 23. Some (Unanswered) Questions <ul><li>Can successful price squeeze claims be presented in real-world trials? </li></ul><ul><li>Will building barriers to entry with IP claims/litigation be sustained absent “deception”? </li></ul><ul><li>Does FTC “jurisdiction” present a Trinko limitation for suits about VoIP or broadband anticompetitive practices? </li></ul><ul><li>Will digital content distribution face antitrust or regulatory constraints for competitive nondiscrimination? </li></ul>17 March 2008
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