[governance] reality check on economics

Sun May 20 21:02:28 EDT 2012

To follow on from my highlighting the multi-national regulation of firms with dominant positions, and the need to keep China in mind since it's...huge and richer by the year...from today's Wall Street Journal: the news is Chinese regulators have permitted Google (a US based firm) to acquire Motorola Mobility (another US based firm). US and European regulators have already signed off on the deal.   Meaning: existing national laws do have impacts at least in the competition policy arena.

The key requirement for the Chinese regulators? That Google would continue to offer Android to other device makers.  

http://online.wsj.com/article/SB10001424052702303360504577414280414923956.html?mod=WSJ_Tech_RightMostPopular

So, turning back to Parminder's mention of how Taiwanese regulatory action led to Google withdrawing from its market; it could be that China has clout that Taiwan does not. Or, it could be that the Chinese regulators played their hand more skilfully. Hard to say without further inquiry.

But my basic point remains the same: in some cases, in some contexts, multinational regulatory coordination including of dominant firms like Google works reasonably well. In other cases regulatory actions have less positive outcomes. 

Whether a truly global regulatory process would work better at regulating dominant firms, than relatively dominant governments (US, Chine, EU)....well we would have to specify exact areas of potential market regulation, and why one apporach would work better than another.

For example, the global market regulation of the gTLD market by ICANN....that is the best of all possible regulatory outcomes right? ; )

Lee
________________________________________
From: governance-request at lists.igcaucus.org [governance-request at lists.igcaucus.org] on behalf of Lee W McKnight [lmcknigh at syr.edu]
Sent: Sunday, May 20, 2012 5:42 PM
To: governance at lists.igcaucus.org; michael gurstein; Milton L Mueller
Subject: RE: [governance] reality check on economics

To broaden our frame of reference sightly; if one were in China, just substitute 'Baidu' where Google appears below in Michael's comments below. So, in terms of monopolies or oligopolies, we need to look more closely market by market. The better phrasing as others have already noted are about who has market power; which does not require true monopoly but can be gained from a - dominant position.

And now speaking of good old fashioned monopoly... China Telecom, China Unicom and China Mobile are really 1 state-owned company with 3 operating divisions.  Which together have between them 1.1 billion subscribers. Now that's - a dominant position.

Lee
________________________________________
From: governance-request at lists.igcaucus.org [governance-request at lists.igcaucus.org] on behalf of michael gurstein [gurstein at gmail.com]
Sent: Sunday, May 20, 2012 4:54 PM
To: Milton L Mueller; governance at lists.igcaucus.org
Subject: RE: [governance] reality check on economics

Milton, to continue pulling the bones out of your red herring...

"Power: the ability to control people or events" http://en.wikipedia.org/wiki/Power

I just did a Google on "monopoly power" and got 300,000 hits...

From this one can conclude a few things concerning Google's "monopoly power" (whether they choose at this time to willfully exercise it or not...
        1. that Google has demonstrated significant technological (algorithmic) "power"--I have no idea how their algorithm chose what it chose or why -- but I and I would guess virtually all of their billion or so users would passively go along as I did
        2. that Google has demonstrated significant informational "power"-- I have no idea what they didn't include in their search or why but I and I would guess virtually all of their billion or so users would passively go along as I did
        3. that Google has demonstrated significant communication "power"--this was all communicated to me (and anyone else who chose to look) in 4 seconds by some means or other which I have no knowledge of or control over but I and I would guess virtually all of their billion or so users would passively go along as I did
        4. that Google has demonstrated significant economic "power"--by placing certain responses in the first few items/pages and leaving the others to uncontrolled and uncontrollable obscurity in the latter pages of the 300,000 items but I and I would guess virtually all of their billion or so users would passively go along as I did
        5. that Google has demonstrated significant political "power"--by presenting certain definitions as the "top" ones in its set rather than others and thus effectively promoted one ideological position cocnerning the nature of monopoly power over other possible defintions but I and I would guess virtually all of their billion or so users would passively go along as I did

I'm not "reserving the right" to anything. Nor are the criteria mine--made up or not.  My point is that we are transferring those "rights" to a domininant corporate body (their market share in search is or was in the 90% range the last time I looked).

And because of their market dominance they have a whole range of types of "power" i.e. the ability to control (or at least strongly influence) people or events (choices, decisions, actions) in each of the above areas etc.etc. rather beyond the simple economic.

One could I believe replace Google with Facebook, Twitter, Gmail and other more or less Internet monopolies in the above "analysis".

Best,

M

-----Original Message-----
From: Milton L Mueller [mailto:mueller at syr.edu]
Sent: Sunday, May 20, 2012 1:14 PM
To: governance at lists.igcaucus.org; michael gurstein
Subject: RE: [governance] reality check on economics

Michael,
When I read your statement below, all I can get from it is that you are reserving the right to call something a "monopoly" irrespective of the economic definition, based on criteria that you have just made up, which I translate as follows: a monopoly is something that has no economic power necessarily but which nevertheless makes me feel vaguely threatened in some way.

Did I get it right?

> -----Original Message-----
> From: governance-request at lists.igcaucus.org [mailto:governance-
> request at lists.igcaucus.org] On Behalf Of michael gurstein
> Sent: Sunday, May 20, 2012 3:18 PM
> To: governance at lists.igcaucus.org
> Subject: RE: [governance] reality check on economics
>
> BTW, I think that this discussion on "monopoly" while interesting and
> useful is based on a significant red herring plopped on the IGC
> cutting board by Milton.
>
> The original note and the subsequent discussion by Parminder and
> others around the ITfC declaration was not by my reading about
> "monopoly" in the narrow economic sense but rather around the
> uncontrolled and so far uncontrollable power (economic, political,
> technical, communicative, informational etc.) that monopolies or near
> monopolies in the Internet space are being entrusted with given the
> overall significance, value and power that the Internet has acquired
> and is continuing to acquire in the daily lives of people, groups,
> communities, countries etc.etc. in every corner of the world.
>
> I think that it is very difficult to dispute this ITfC (and other's)
> position and the need for some form of democratic, transparent and
> accountable  framework to ensure that this power is not used in an
> irresponsible, repressive, quixotic, destructive, completely self-
> interested way either by corporations or by governments or by rogue
> elements of civil society for that matter.
>
> If for no other reason than that the Internet is so significant and
> its continued effective functioning is becoming so central as an
> electronic infrastructure for the well-being and future of mankind
> some globally legitimate means needs to be found to "govern" it in the
> interests of all. Whether that is through a mechanism such as CIRP
> (which I don't personally see as being feasible) or some other yet to
> be determined vehicle (as I've mentioned before I'm increasingly
> attracted to the norm based OGP framework) is a matter of negotiation
> and evolution.  That such a mechanism is absolutely and unarguably
> necessary and sooner rather later seems to me to be self-evident
> except to those whose ideological, self-interested or commercial
> blinkers are so strong as to make them blind to reality.
>
> And moreover I would have thought that those who have a genuine rather
> than just a rhetorical interest in managing the egregious behaviour of
> Internet rogue states would be the most interested in a framework of
> norms and their operationalization as a way of putting globally
> actionable boundaries around those outcomes.
>
> M
>
> -----Original Message-----
> From: governance-request at lists.igcaucus.org [mailto:governance-
> request at lists.igcaucus.org] On Behalf Of Avri Doria
> Sent: Sunday, May 20, 2012 7:52 AM
> To: IGC
> Subject: Re: [governance] reality check on economics
>
> On 20 May 2012, at 10:11, Guru गुरु wrote:
>
> > On 20/05/12 18:54, Avri Doria wrote:
> >> On 19 May 2012, at 23:39, Guru गुरु wrote:
> >>
> >>> I think you have begun a useful thread of thought - the need for
> >>> global regulation of business.
> >> I did not go that far.
> >>
> >> I was looking for what could be done at a global level to help
> >> avoid local monopolies in information services.
> >
> > What is the difference between "what could be done at a global level
> > to help avoid local monopolies in information services" and "global
> > regulation".
> >
> >> I also spoke of global work to help produce local regulatory
> >> reform. I do not not advocate global regulation of business.
> >
>
>
> Good question.  I think this is where we need to be creative in
> figuring out how to do things.  E.g  a global regulatory function, e.g
> ICANN use of contracts, might be tried.  I don't think that is has
> worked as well as hoped*, but I think it is a thought in the right
> direction.  ICANN does not regulate, but oversees a regulatory
> function that sometimes sort of works.
>
> In thinking about a regulatory function that is assisted but not
> overseen by global multistakeholder work, I think of a situation where
> the stakeholders can come to rough consensus on guidelines for local,
> for some definition of local, regulatory functions.  In turn, having
> come to these guidelines on a voluntary and multistakeholder basis,
> all parties pressure each other at the local level to live up to the
> rough consensus re-shared to the local context using their own
> methods: from governments making laws and regulations, to companies
> giving and withdrawing their investment, technologists shaping
> protocols to allow for the guidelines to be met (management frameworks
> etc) and civil society either supporting by buying or going to the
> streets with Occupy, boycotts and other civil actions and sometimes
> even voting**.
>
> avri
>
>
> * Before you ask: 1) contracts seem to need to be rooted in national
> law, leaving us with the unfortunate situation of ICANN being anchored
> in a single country, 2) compliance enforcement is horrid (then again
> compliance enforcement is a problem in every regulatory system I have
> ever looked at) both of these could be fixed if ICANN had the will to
> do so.
>
> ** When that mechanism works properly and isn't just another form of
> propaganda reaction.
>

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