Senior executives from both companies are scheduled to show up before a U.S. Senate panel on Thursday afternoon to argue their respective cases for why Google should–or should not–be allowed to purchase DoubleClick for $3.1 billion. The acquisition was announced in April but is still undergoing a review by the Federal Trade Commission and regulators in Europe and Australia.
The hearing could mark a turning point in Google’s relationship with Washington. It is the first time that Congress has seriously scrutinized the fast-growing company’s business strategies, and the first time that a proposed acquisition by the company has encountered such concerted political opposition.
It also represents the result of months of private lobbying and public agitation against the merger by Google’s most dangerous business rivals. No stranger to antitrust issues, Microsoft has ordered its legendary army of lobbyists to torpedo the deal, and AT&T, Yahoo and Time Warner have also expressed concerns.
Later: NYTimes coverage — Senators Scrutinize Google’s Bid for Ad Firm
“Markets, the solution to all problems!” Nice to see that Tim hasn’t lost his fire: Verizon Rejects Messages of Abortion Rights Group
Timothy Wu, a law professor at Columbia, said it was possible to find analogies to Verizon’s decision abroad. “Another entity that controls mass text messages is the Chinese government,” Professor Wu said.
Jed Alpert, the chief executive officer of Mobile Commons, which says it is the largest provider of mobile services to political and advocacy groups, including Naral, said he had never seen a decision like Verizon’s.
“This is something we haven’t encountered before, that is very surprising and that we’re concerned about,” Mr. Alpert said.
Professor Wu pointed to a historical analogy. In the 19th century, he said, Western Union, the telegraph company, engaged in discrimination, based on the political views of people who sought to send telegrams. “One of the eventual reactions was the common carrier rule,” Professor Wu said, which required telegraph and then phone companies to accept communications from all speakers on all topics.
Some scholars said such a rule was not needed for text messages because market competition was sufficient to ensure robust political debate.
“Instead of having the government get in the game of regulating who can carry what, I would get in the game of promoting as many options as possible,” said Christopher S. Yoo, a law professor at the University of Pennsylvania. “You might find text-messaging companies competing on their openness policies.”
After NARAL’s complaint reached the national media, Verizon Wireless did a quick about-face, reversing itself on Thursday. The company blamed “an incorrect interpretation of a dusty internal policy” and asserted that it has “great respect for this free flow of ideas.” Nevertheless, by demonstrating how much power network operators wield over speech, Verizon Wireless and AT&T have strengthened the case for rules that keep the Internet free from their control or anyone else’s.
A monthly phone bill of $50 now includes as much as $10 in taxes. And some in Congress warn that consumers soon could be hit with similar assessments for high-speed Internet access.
For nearly a decade, the lines carrying the Internet into homes and businesses have been a virtual tax-free zone. But that could change Nov. 1 when a federal ban on Internet access taxes expires.
Almost everybody agrees that the politically popular moratorium should be extended to encourage continued investment in the high-speed lines crucial to making new online activities possible, particularly video. But changing Internet usage has complicated the issue, threatening to derail an extension and raising the specter of local officials engaging in a land-rush-like race to enact new taxes for surfing the Web.
[…] [As] phone and TV services increasingly are delivered over the Internet, state and local governments worry that more of their tax revenue will disappear because of the federal moratorium. They oppose the permanent extension championed by McCain and a slew of lawmakers, along with Don’t Tax Our Web, a coalition of major telecommunications, computer and Internet companies, including AT&T Inc., Google Inc. and Time Warner Inc.
Instead, the U.S. Conference of Mayors, the National Governors Assn. and other local government groups want to narrow the definition of Internet access put in place in 1998, which could be interpreted to cover anything delivered online, and to make the extension temporary in case technology again overtakes the law.
The technology opens the door for download services from the likes of Amazon.com Inc. and Wal-Mart Inc. to let customers burn movies they buy to DVD, then watch them on television or portable DVD players. Those services still represent only a fraction of the revenue generated by movie rentals and sales.
“It removes the last real obstacle toward on-demand movie purchase,” said Van Baker of Gartner Inc. “You dont have to go to a store anymore. You can just log on, say “I want this for my library, and away you go.”
[…] Jim Taylor, a Sonic Solutions senior vice president, said consumers would need special DVD burners and recordable discs that use its technology, although the discs would play on standard DVD players. Those products probably won’t appear in stores until early next year, he said.
Electronics manufacturers such as Pioneer Corp. and PC maker Dell Inc. have announced support for the technology.
The major Hollywood studios have insisted on anti-piracy protection identical to that offered on DVDs before they would permit online movie services to let consumers make copies of mainstream movies.