interesting article about the history of predatory pricing
http://www.cato.org/pubs/pas/pa-169es.html
Monday, April 2, 2007
Predatory pricing and antitrust issues
In January 2007 , the court of first instance, EU's second highest court ruled that Franc telecom's broadband arm, wanadoo, kept competitors out of high-speed internet market illegally by charging artificially low prices, prices that are below their cost,[1]
This is an obvious predatory pricing case! basically; predatory pricing means selling the product at a price below the cost to drive the competitor(s) out of the market or at least discipline that competitor(s)[2][3], the definition looks very straightforward, but a deeper look in the issue shows the complications and ambiguities surrounded by predatory pricing.
first of all price-cost leadership is the major goal for any firm in any market, almost all competition is price-based, but where would the line be drown? what constitutes antitrust predatory pricing and what constitutes legal competition. especially in the telecom market?
The telecom markets are characterized by many particularities[2]:on most fixed-line telephony markets there is one-former monopolist with an established customer base and almost 100% share of the market in the beginning of the liberalization "in this case France telecom" naturally, new entrants will convince customers to switch,
In addition to that , the telecom market is characterized by high fixed costs "infrastructure" and low variable costs, so many new entrants might need to use the existing incumbent infrastructure, the prices for using the incumbent's infrastructure are usually regulated.
checking the above points reveals that there is a risk of predation in telecom markets[2]: the established operators can work form the customer base they have to achieve market power,that's for incumbent operators , from the other side there a large incentive for the new entrants to cut prices in order to encourage the customers to switch to their service.
there are many rules and used to identify predatory pricing,[2] talks about the best known one used called areeda-turner rule, where the price is considered predatory if it's below average variable costs, this rule however has it's limitations.
It is up to the regulator to define predatory pricing, it's difficult to establish certain rules to realize it! basically: a price is predatory if it's meant to drive competitors out of the market and there is no business behaviour can explain the price cut.[2]
the regulator can use two approaches to prevent predatory pricing, the ex-post approach is where the regulatory supervise the competition process, it's it up to the regulator and the courts to decide whether a certain behaviour is predatory, this process can be slow and not very effective and might fail to protect the competitors since any action may take place after the competitor is drown out of business.[2]
in contrast, the ex-ante approach requires the firms are required to get approval for all price changes before they happen, this approach is more drastic and is the current practice for most of the regulatory authorities.[2]
Predatory pricing is a serious issue in liberalized markets, the fine line between illegal pricing and normal pricing makes it more difficult to be decisive about it so many times normal pricing actions were considered predatory therefore stifling true competition , many other times predatory actions passed the supervision resulting in an unfair competition between firms.
References:
[1] Reuters.com "EU court rules france telecom broke antitrust rules" jan 2007 http://www.reuters.com/article/technologyNews/idUSBRU00535220070130
[2] "Predatory pricing on liberalized telecommunications markets" by Justus Haucap and Jorn Kruse, August 2002
[3] wikipedia.org
This is an obvious predatory pricing case! basically; predatory pricing means selling the product at a price below the cost to drive the competitor(s) out of the market or at least discipline that competitor(s)[2][3], the definition looks very straightforward, but a deeper look in the issue shows the complications and ambiguities surrounded by predatory pricing.
first of all price-cost leadership is the major goal for any firm in any market, almost all competition is price-based, but where would the line be drown? what constitutes antitrust predatory pricing and what constitutes legal competition. especially in the telecom market?
The telecom markets are characterized by many particularities[2]:on most fixed-line telephony markets there is one-former monopolist with an established customer base and almost 100% share of the market in the beginning of the liberalization "in this case France telecom" naturally, new entrants will convince customers to switch,
In addition to that , the telecom market is characterized by high fixed costs "infrastructure" and low variable costs, so many new entrants might need to use the existing incumbent infrastructure, the prices for using the incumbent's infrastructure are usually regulated.
checking the above points reveals that there is a risk of predation in telecom markets[2]: the established operators can work form the customer base they have to achieve market power,that's for incumbent operators , from the other side there a large incentive for the new entrants to cut prices in order to encourage the customers to switch to their service.
there are many rules and used to identify predatory pricing,[2] talks about the best known one used called areeda-turner rule, where the price is considered predatory if it's below average variable costs, this rule however has it's limitations.
It is up to the regulator to define predatory pricing, it's difficult to establish certain rules to realize it! basically: a price is predatory if it's meant to drive competitors out of the market and there is no business behaviour can explain the price cut.[2]
the regulator can use two approaches to prevent predatory pricing, the ex-post approach is where the regulatory supervise the competition process, it's it up to the regulator and the courts to decide whether a certain behaviour is predatory, this process can be slow and not very effective and might fail to protect the competitors since any action may take place after the competitor is drown out of business.[2]
in contrast, the ex-ante approach requires the firms are required to get approval for all price changes before they happen, this approach is more drastic and is the current practice for most of the regulatory authorities.[2]
Predatory pricing is a serious issue in liberalized markets, the fine line between illegal pricing and normal pricing makes it more difficult to be decisive about it so many times normal pricing actions were considered predatory therefore stifling true competition , many other times predatory actions passed the supervision resulting in an unfair competition between firms.
References:
[1] Reuters.com "EU court rules france telecom broke antitrust rules" jan 2007 http://www.reuters.com/article/technologyNews/idUSBRU00535220070130
[2] "Predatory pricing on liberalized telecommunications markets" by Justus Haucap and Jorn Kruse, August 2002
[3] wikipedia.org
Google Docs
Google docs and spreadsheets is a web-based productivity tool launched by google inc. as a "complementary" to desktop products, the Beta version was launched in march 2006 with the spreadsheets and in June , google docs was launched.
google docs & spreadsheets offer many interesting features and lack many others, assuming that Internet connection is available, files can be easily accessed whenever and wherever needed, modified right away, saved, even published, so it can be a good solution for users with high mobility.
it also provides the feature of sharing, the beta version can support up to 10 accounts modifying and using the same document. making it a good solution for work groups.
Security is another feature of google docs, all the files are stored in a "central" server , a relatively secure location and less prone to vandalism and such dangers
Along with advantages comes the disadvantages: the most obvious disadvantage is the lack of features, users that are "spoiled" with the features that MS office provides them, "me being one of them" find google docs features very basic and insufficient,
Dealing with privacy of content is another disadvantage , the same feature of security is the disadvantage of lack of privacy, storing the files away from the author in a central server will compromise the privacy of content and therefore users will be shunned from using this product for sensitive and Private content, in addition to that , users might feel uncomfortable to the idea of their files being stored away from them and prefer that they would reside "physically" closer to them
Add to that, the whole idea assumes that Internet access is always available, and that is not always true! many countries in the world don't have adequate and full access everywhere!
However , google docs/spreadsheets is only in it's Beta version, many features that are still not available and many features that will not be available, it's early to judge on the usability of this product, during my brief experience with this product , many bugs came and went, the stability fluctuated along the way! sometimes it even crashed my computer! typical of a beta version."right now the program works just fine! maybe because the google guys know I'm writing about them! who knows ?!!!"
the success of this product is based on many factors: increasing Internet access and make it available virtually everywhere, ensuring the total privacy and security of the content servers , and of course making the product more stable and offering more features. right now google docs might not be suitable for all types of users. in addition many users have already invested time and money on their existing word/spreadsheet applications so they'll provably resist the idea of switching to other products even if they are free! therefore another challenge that might face google is convincing the customers that their product is more stable and has more features.
However, as mentioned earlier, google docs is only a complimentary product, google officials claim that they're not trying to replace other established desktop products such as MS office but to give and alternative that might be useful in some cases. it shows google's increasing commitment towards a web based application products.
After all ; google docs is a good "light" solution when other products are not available, however the established , non web-based products are currently the better choice , even when most of them have performance and stability issues.
google docs & spreadsheets offer many interesting features and lack many others, assuming that Internet connection is available, files can be easily accessed whenever and wherever needed, modified right away, saved, even published, so it can be a good solution for users with high mobility.
it also provides the feature of sharing, the beta version can support up to 10 accounts modifying and using the same document. making it a good solution for work groups.
Security is another feature of google docs, all the files are stored in a "central" server , a relatively secure location and less prone to vandalism and such dangers
Along with advantages comes the disadvantages: the most obvious disadvantage is the lack of features, users that are "spoiled" with the features that MS office provides them, "me being one of them" find google docs features very basic and insufficient,
Dealing with privacy of content is another disadvantage , the same feature of security is the disadvantage of lack of privacy, storing the files away from the author in a central server will compromise the privacy of content and therefore users will be shunned from using this product for sensitive and Private content, in addition to that , users might feel uncomfortable to the idea of their files being stored away from them and prefer that they would reside "physically" closer to them
Add to that, the whole idea assumes that Internet access is always available, and that is not always true! many countries in the world don't have adequate and full access everywhere!
However , google docs/spreadsheets is only in it's Beta version, many features that are still not available and many features that will not be available, it's early to judge on the usability of this product, during my brief experience with this product , many bugs came and went, the stability fluctuated along the way! sometimes it even crashed my computer! typical of a beta version."right now the program works just fine! maybe because the google guys know I'm writing about them! who knows ?!!!"
the success of this product is based on many factors: increasing Internet access and make it available virtually everywhere, ensuring the total privacy and security of the content servers , and of course making the product more stable and offering more features. right now google docs might not be suitable for all types of users. in addition many users have already invested time and money on their existing word/spreadsheet applications so they'll provably resist the idea of switching to other products even if they are free! therefore another challenge that might face google is convincing the customers that their product is more stable and has more features.
However, as mentioned earlier, google docs is only a complimentary product, google officials claim that they're not trying to replace other established desktop products such as MS office but to give and alternative that might be useful in some cases. it shows google's increasing commitment towards a web based application products.
After all ; google docs is a good "light" solution when other products are not available, however the established , non web-based products are currently the better choice , even when most of them have performance and stability issues.
Sunday, March 18, 2007
You're telling me there's another life ????????!!!!!!!!!
When it comes to making people's dream come true! second life comes very close to doing it! the idea is simple , you can be whatever you want, look anyway you want and of course do whatever you want! then you can wander the virtual reality world , mingle with people from all over the world , buy , sell , almost everything that you do in your real life !
second life has caught the attention of many! the number of second life users is getting closer to 2 million! from the average users who just want to socialize, to big corporates who want to sell, advertise and test their products and ideas !! the fever has even reached the political community !!! with John Edwards the democratic hopeful launching his own campaign in second life! from his second life HQ! that and other interesting facts makes second life become more like our first "real" life world!!!
or in other words it's our world .... digitized !!!!!!!
being a telecom engineer! I don't believe that anything can replace the physical , face to face contact, it is true that the telecommunication boom helped shorten the distances!! but it can only help when it's too far to make direct contact !!! call me old school but that's what I really believe!!
However, it's seems that this is not were things are going in real life! the internet boom helped people get closer together, but it also helped people get "alternative" lives parallel to their own life!! simple example ? Instant Messaging!
what makes second life different is that it uses the virtual reality idea to create a world that is almost identical to the one we live in!! there is sun , sky , sea , you walk around and meet 3d avatars of people that resembles " or at least, you can assume that!" the real persons behind it, still you talk to the avatars , the second life characters that were created by the fantasies of their owners ! you never reach out for the real person! in second life! almost nobody talks about real life!! john Edwards might be an exempt!!!!
the question is : will we get to the point were almost everyone sits in his room , connects to the internet , logs on to second life and starts his day???? well already we see some people who are "living online" ... but can that happen even more ? it seems that even the chaos of our world will move on and make roots in Second life!!! Caroline McCarthy of CNET news , interviewed the spokeswoman of the Second Life Liberation Army , an "avatar rights" or "virtual rights" group that aims at creating "democracy" in the second life community,
the SLLA members took over the stage at the world economic forum's second life presence and set off atomic bombs of companies there,[1] not real atomic bombs just visual effects!! but that makes you worry! will these organizations make an inverse move into the physical world , or even worse! will terrorism move towards this world!! hopefully not!
can Second Life change the way that people live? does second life replace or compliment our first "real" lives ? tough ones to answer , as for me, I'm happy with my carnal life!! very busy with it , i don't think I'm ready to get another life! virtual or not!
life is beautiful!
references
[1] Caroline McCarthy: "In 'second life', the ring of revolution ?" Cnet news march 5th 2007 http://news.com.com/2100-1043_3-6163917.html
second life has caught the attention of many! the number of second life users is getting closer to 2 million! from the average users who just want to socialize, to big corporates who want to sell, advertise and test their products and ideas !! the fever has even reached the political community !!! with John Edwards the democratic hopeful launching his own campaign in second life! from his second life HQ! that and other interesting facts makes second life become more like our first "real" life world!!!
or in other words it's our world .... digitized !!!!!!!
being a telecom engineer! I don't believe that anything can replace the physical , face to face contact, it is true that the telecommunication boom helped shorten the distances!! but it can only help when it's too far to make direct contact !!! call me old school but that's what I really believe!!
However, it's seems that this is not were things are going in real life! the internet boom helped people get closer together, but it also helped people get "alternative" lives parallel to their own life!! simple example ? Instant Messaging!
what makes second life different is that it uses the virtual reality idea to create a world that is almost identical to the one we live in!! there is sun , sky , sea , you walk around and meet 3d avatars of people that resembles " or at least, you can assume that!" the real persons behind it, still you talk to the avatars , the second life characters that were created by the fantasies of their owners ! you never reach out for the real person! in second life! almost nobody talks about real life!! john Edwards might be an exempt!!!!
the question is : will we get to the point were almost everyone sits in his room , connects to the internet , logs on to second life and starts his day???? well already we see some people who are "living online" ... but can that happen even more ? it seems that even the chaos of our world will move on and make roots in Second life!!! Caroline McCarthy of CNET news , interviewed the spokeswoman of the Second Life Liberation Army , an "avatar rights" or "virtual rights" group that aims at creating "democracy" in the second life community,
the SLLA members took over the stage at the world economic forum's second life presence and set off atomic bombs of companies there,[1] not real atomic bombs just visual effects!! but that makes you worry! will these organizations make an inverse move into the physical world , or even worse! will terrorism move towards this world!! hopefully not!
can Second Life change the way that people live? does second life replace or compliment our first "real" lives ? tough ones to answer , as for me, I'm happy with my carnal life!! very busy with it , i don't think I'm ready to get another life! virtual or not!
life is beautiful!
references
[1] Caroline McCarthy: "In 'second life', the ring of revolution ?" Cnet news march 5th 2007 http://news.com.com/2100-1043_3-6163917.html
Monday, March 12, 2007
The new age of radio
Can Podcasting be the "new radio"???
podcasting has become so popular that it's now considered an official word !!!
according to Webster's new millennium dictionary of english :
-podcast :(n) a Web-based audio broadcast via an RSS feed, accessed by subscription over the Internet.
-podcast :(v) to deliver a Web-based audio broadcast via an RSS feed over the Internet to subscribers.
There are hours and hours and hours of podcasts over the internet so the task of finding the "favourite" podcasts is not easy by any means, it depends on where and how you look around and what are you realy interested in!
my search included both independent and corporate podcasts,and I found that there's a lot more quality and content in independent podcasts,
there are alot of intersting podcasts out there, it'd be unfair to just name three , but anyway :
1- Avaya's "Smart Start with Dummies" audio books podcast was interesting , it's good if you want to get an idea of VOIP and SIP technologies,
you can find it at http://www.avaya.com/gcm/master-usa/en-us/podcasts/index.htm
2- Comis strip live: stand up comedy , great content , very diverse , ranges from "clean" everyday life humor to "explicit" political content
great if you're into stand up comdey "like me" http://www.podcast.net/show/8226
3-Practical performance guitar, Expressive playing: If you're into learning guitar rock solos, this is a great resource for you !! it'd be better if it had video , but it's a nice challenge ! http://www.podcast.net/show/46447
other intersting podcasts:
-The american life, chicago publice radio: the #1 podcast on iTunes!
-Monster guitar podcasts , lessons and tips: http://www.podcast.net/show/5693
-Learn spanish with coffe break spanish: for you spanish language zealots you can find it on itunes !
-Irish and celtic music podcast : common it's saint patrick's season!!! find it on itunes
it's hard to say which podcasts were less favourite , generally i'd say the ones with a not-very-attractive titles are the least favourite!
enjoy
podcasting has become so popular that it's now considered an official word !!!
according to Webster's new millennium dictionary of english :
-podcast :(n) a Web-based audio broadcast via an RSS feed, accessed by subscription over the Internet.
-podcast :(v) to deliver a Web-based audio broadcast via an RSS feed over the Internet to subscribers.
There are hours and hours and hours of podcasts over the internet so the task of finding the "favourite" podcasts is not easy by any means, it depends on where and how you look around and what are you realy interested in!
my search included both independent and corporate podcasts,and I found that there's a lot more quality and content in independent podcasts,
there are alot of intersting podcasts out there, it'd be unfair to just name three , but anyway :
1- Avaya's "Smart Start with Dummies" audio books podcast was interesting , it's good if you want to get an idea of VOIP and SIP technologies,
you can find it at http://www.avaya.com/gcm/master-usa/en-us/podcasts/index.htm
2- Comis strip live: stand up comedy , great content , very diverse , ranges from "clean" everyday life humor to "explicit" political content
great if you're into stand up comdey "like me" http://www.podcast.net/show/8226
3-Practical performance guitar, Expressive playing: If you're into learning guitar rock solos, this is a great resource for you !! it'd be better if it had video , but it's a nice challenge ! http://www.podcast.net/show/46447
other intersting podcasts:
-The american life, chicago publice radio: the #1 podcast on iTunes!
-Monster guitar podcasts , lessons and tips: http://www.podcast.net/show/5693
-Learn spanish with coffe break spanish: for you spanish language zealots you can find it on itunes !
-Irish and celtic music podcast : common it's saint patrick's season!!! find it on itunes
it's hard to say which podcasts were less favourite , generally i'd say the ones with a not-very-attractive titles are the least favourite!
enjoy
Sunday, March 4, 2007
It's a Wiki Wiki world
Lets face it!! Wikipedia is a great source, there's virtually nothing that you can't find there, from the F-word to Jimi Hendrix to the geekiest subject imaginable! you can find very useful links
the whole idea is that you can add , edit , delete , whatever you don't like and write any article that you might find "right" !! it's up to the public to edit it,the author's identity remains unkown.. not a bad idea at all!!
the internet is becoming an "open-source" hub , from youtube, to ultimate guitar and of course, wikipedia, everybody and anybody can be an artist, journalist, researcher, movie star, porn star, director and the list goes, you can post whatever you want and express whatever you want , no matter how unusual " and in many times twisted" your idea is!!
Wikipedia " as mentioned in wikipedia.com .. what an irony!" is:
" a multilingual, Web-based, Free content Encyclopedia project. Wikipedia is written collaboratively by volunteers; its articles can be edited by anyone with access to the Web site. The name is a portmanteau of the words wiki (a type of collaborative website) and encyclopedia."
According to wikipedia there are more than 75000 active contributors, working on more than 5,300,000 articles in more than 100 languages!
and more than 1,600,000 articles in English only!!! that's a lot. no other encyclopedia gets even close to that!
also on wikipedia.com:
"Wikipedia's reliability and accuracy have been questioned. The site has also been criticised for its susceptibility to vandalism, uneven quality, systemic bias and inconsistencies, and for favouring consensus over credentials in its editorial process. Wikipedia's content policies and sub-projects set up by contributors seek to address these concerns. Two scholarly studies have concluded that vandalism is generally short-lived and that Wikipedia is roughly as accurate as other online encyclopedias."
The authors names are unknown, you have no idea about their academic background or affiliation, and anybody can edit anything therefore vandalism is a big concern, that and many other concerns affect wikipedia's credibility
if we take Encyclopedia Britannica, a prestigious source , been around for 239 years!!! yeah it's contributors and board of directors is about 4400, nothing compared to wiki's size! but in this case size doesn't matter!!! take a look at their editorial board of directors: Nobel laureates , university presidents, university professors! , but it's not free! and in costs a lot, anyway, after all nothing is perfect , even britannica has it's flaws , but it's way more credible!!!!
Right now the online version of britannica is available for students, for about 70$ a year you can get access to 17,511 articles , learning activites and step by step research guides!
in my own opinion wikipedia is a great source if you want to start researching about any subject! it can give you a good guideline for what and where to look, the contents are well organized , with links to websites and papers to get more info , but if you want your paper to be more convincing!! don't depend on wiki alone!
references :
wikipedia.com
britannica.com
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