Von.x Antitrust Panel

Antitrust: How To Survive and Prosper In a Hostile Market and Judicial Environment Von.x Pre-Conference 17 March 2008 San Jose

Panelists
Glenn Manishin
Duane Morris LLP
Mark Ostrau
Fenwick & West LLP
Al Pfeiffer
Latham & Watkins LLP
Harvey Saferstein
Mintz Levin et al. LLP
David Turetsky
Dewey & LeBouef LLP
17 March 2008

Outline
Price Squeeze Claims
Standards & Antitrust
VoIP, Broadband & Antitrust
Antitrust & Related Litigation
Some (Unanswered) Questions
17 March 2008

Price Squeeze Claims
Trinko , Covad , LinkLine
and Beyond
(Al Pfeiffer)
17 March 2008

Basic Price-Squeeze Theory
Key Assumptions:
Incumbent controls key input with no effective sub- stitutes
Incumbent charges entrant more than its own input cost
Input costs result in raising entrant’s total costs above retail price
Equally (or more) efficient competitor excluded
17 March 2008

The Uncertain Impact of Trinko
Trinko did not deal directly with price squeeze claims, but recognized broad right to refuse to deal altogether
Price squeeze claims were recog-nized under pre-1996 Act antitrust law
Has led to split among Circuit Courts, in a series of cases arising from DSL carriers’ claims against RBOCs
17 March 2008

The Covad Rulings
Covad v. Bell Atlantic
398 F.3d 666 (D.C. 2005)
407 F.3d 1220 (D.C. 2005)
Rejected Covad’s price squeeze claim
If incumbent can refuse to deal, it can price as it wants
Predatory pricing claims still viable
Covad v. BellSouth
374 F.3d 1044 (11th 2004 )
Price squeeze claims remain potentially viable after Trinko
Upheld Covad’s price squeeze claim
But found must be tied to predatory pricing by incumbent
17 March 2008

The LinkLine Ruling
Distinguished between fully reg-ulated POTS markets and partially-deregulated DSL market
Price squeeze claims are viable, even without showing predatory pricing
Dissent: Predatory pricing should be required, but if shown, price squeeze claims viable
17 March 2008

Key Questions For Plaintiffs
Fight or Negotiate?
Late ‘90s track record favors fighters
Public lawsuits may hurt investor confidence
Can you file in the Ninth Circuit?
Can/should you allege predatory pricing, as a backup?
Requirements of Rule 11
How do you measure incumbent’s cost?
17 March 2008

Standards & Antitrust
Developing, Setting or Adopting Standards
(Mark Ostrau)
17 March 2008

Overview
Generally pro-competitive:
Increased efficiency, interoperability, lower barriers to entry
Facilitate comparisons, increase price competition
But numerous antitrust hazards:
Patent holdup
Excluding or injuring competitors
Limiting downstream competition
17 March 2008

What to Look For in an SDO/SSO
Membership: Open, with multiple constit-uencies
 Beware market power, exclusiveness, exclusivity
Process: Participatory, impartial, consensus-driven
 Beware bias, subjectivity, exclusionary result
Implementation: Voluntary, accessible, non-exclusive
IP rules: Clear disclosure obligations and RAND (or better) license rules
17 March 2008

Handling IP – Play Fair or Else
Don’t fail to disclose relevant IP
 Dell  UNOCAL  Rambus
Don’t violate license commitments
 N-Data
 Qualcomm
Don’t mess up the pool
 “ Non-essential” patents, exclusiv-ity, discrimination, noncompetes
17 March 2008

VoIP, Broadband & Antitrust
What Is ― or Should Be ― the
Role of the Federal Trade Commission?
(Harvey Saferstein)
17 March 2008

Overview
Jurisdictional Issues ― FCC Regulation; Common Carrier Exclusion
Antitrust
Consumer Protection
17 March 2008

The FTC & Consumer Protection
Privacy Ventures ― Do Not Call List
Deceptive Billing and Advertis- ing of Services
Telemarketing
17 March 2008

The FTC, Antitrust & Competition
Merger Reviews, e.g., Time Warner
Bundling? Privacy?
Standards-Setting
17 March 2008

Antitrust & Related Litigation
Survival in a Hostile Market and Judicial Environment Requires Attentiveness to Every Opportunity
(David Turetsky)
17 March 2008

Achieving Business Objectives
Set goals and consider multiple and complementary ways to achieve them. Consider:
Antitrust: Private litigation, mediation, possible government enforcement interest?
Other theories: contract, tort, common law, statutes
FCC proceedings, congressional interest
17 March 2008

Media and Content: Bundling and Access
FCC considering whether:
programmers must sell each network separately to cable rather than in bundles
cable must sell networks a la carte to customers or can sell in bundles or “tiers”
Congressional committees have examined these issues and some have voted — against requiring a la carte
Federal class action complaint under Sherman Act §§ 1 and 2 alleging anticompetitive bundling or tying by programmers and cable
17 March 2008

Media Ownership Issues
Cross-ownership rules — newspapers, TV stations, cable, etc.
Congressional concerns — media concentration, diversity of voices, timing, etc.
Third Circuit tossed out revised ownership rules
Antitrust merger reviews
17 March 2008

Bottlenecks and Miscellaneous
FCC bans exclusive access by cable providers to MDUs
Antitrust case on building access for CLEC dismissed
The Twombly hurdle
What about MFN clauses as applied to independent programmers?
Any different from “best terms” agreements criticized as anticompetitive by EC in business insurance competition report?
17 March 2008

Some (Unanswered) Questions
Can successful price squeeze claims be presented in real-world trials?
Will building barriers to entry with IP claims/litigation be sustained absent “deception”?
Does FTC “jurisdiction” present a Trinko limitation for suits about VoIP or broadband anticompetitive practices?
Will digital content distribution face antitrust or regulatory constraints for competitive nondiscrimination?
17 March 2008

Von.x Antitrust Panel

by Glenn Manishin

Accessibility

Categories

Upload Details

Usage Rights

1 Embed 1

Statistics

Von.x Antitrust Panel Presentation Transcript