FryUp: Tip of the iceberg

Telecom gets a regulatory smackdown, but unbundling needs further protection

Things that go bump pow

J D Renaud’s Bob Log III clip is beautifully low-tech. You can tell he does eight things, max. YouTube

Tip of the iceberg

Is there more to the decision by the Independent Oversight Group or IOG to uphold complaints from Vodafone and Kordia/Orcon, that Telecom Wholesale’s loyalty discounts went against the incumbents legally binding undertakings to the government? There’s no doubt that the IOG’s reasons to uphold the complaints are sound — Kordia/Orcon and Vodafone could not have taken up the loyalty discounts without dumping their investment in unbundled local exchanges. Likewise, Wholesale has to stick with the “Equivalence of Inputs” principle for the upcoming Basic Unbundled Bitstream Access (BUBA) with voice bundle. Same price and same terms for everyone, including Telecom itself, so no loyalty discounts to only some providers there. LLU is a sacrosanct part of the present regulation, and provides infrastructure competition to the point that Telecom Wholesale is worried. For that reason, it has to be protected, especially when it appeared that Telecom Wholesale was targeting exchanges around the country that TelstraClear was intending to unbundle. As it is, LLU providers in NZ are under fire from Chorus and its roadside cabinets rollout — already, around half of phone lines in the country are delivered via cabinets, which aren’t viable to unbundle thanks to the Commerce Commission setting access prices too high, providers say. LLU providers also have to battle Telecom Retail and now, it seems, Telecom Wholesale. Perhaps it wasn’t the legislators’ intention to turn Telecom into a three-headed hydra through operational separation, but either way, it’s interesting to see how the competitive goals for the three business units are so remarkably aligned. Looking at it from smaller providers’ viewpoint, especially in the regions, the IOG decision could cause business pain. Margins on wholesale voice and DSL are slim, so getting another 15 to 20 percent had providers taking up the discounts smiling. Now there are no more discounts however, after some providers having enjoyed the them for six months already. It’ll be interesting to see how their two-year contracts are dissolved now that the discounts are deemed illegal — I don’t expect providers will have to return the ill-gotten savings, but there could be some price hikes coming up for them. What can Telecom Wholesale do to get itself out of this mess then? I wouldn’t be surprised if there’s a Plan D with a loyalty scheme that’s friendlier towards LLU providers than the present one. If not, someone will have to pay for the costly regulatory marauding, and it may well be retail customers. IOG upholds complaint against Telecom Wholesale IOG releases reasons for Telecom slapdown Draft ruling says Telecom targeted competitive threat

Cool Kitty

It’s Friday, and the GeekWorld is holding its breath, waiting for copies of what PC World tech editor Scott Bartley calls “an expensive service pack”. Yep, the Snow Leopard’s on the prowl, and Apple aficionados are pre-ordering the new operating system in droves. Early reviews of Snow Leopard seem a bit subdued, if generally positive. Fairly similar to the reception Windows 7 has had, in fact. The biggest question seems to be just how 64-bit Snow Leopard is, and there’s some confusion there. Even though Snow Leopard is stealing the Windows 7 thunder, operational separation seems to work rather well at Microsoft. The Mac Business Unit at MS has announced Office 2008 already, and Snow Leopard supports Exchange so well that Apple users are swooning at the thought of running Outlook. Windows 7 users meanwhile have only a somewhat rough around the edges Technical Preview of Office 2010 to play with. How things have changed. - MacWorld’s review of Snow Leopard


Tech support cheat sheet


Robert X Cringely Apple: Poachers will be punished

Did Apple try to strong-arm Palm into a 'don't touch ours, we won't touch yours' hiring arrangement? If so, it may have run afoul of antitrust laws

It seems Steve Jobs prefers his eggs-ecutives fried, not poached. And that could place him in boiling water with the US Department of Justice.

Smoking-gun emails unearthed by Bloomberg suggest that back in August 2007, the Pope of 1 Infinite Loop contacted then Palm CEO Ed Colligan with a deal: Keep your dirty palms (ahem) off our top talent, and we'll do the same.

Colligan not only said thanks, but no thanks, he also casually mentioned that such collusion would probably be looked upon with disfavour by Johnny Law. Per Bloomberg:

"Your proposal that we agree that neither company will hire the other's employees, regardless of the individual’s desires, is not only wrong, it is likely illegal," Colligan said to Jobs, 54, according to the communications.

This whole thing really started when former Apple iPod impresario Jon Rubenstein jumped ship to Palm just as the Jesus Phone was being unveiled to the world. Lo and behold, a few years later we have the Palm Pre — the most iPhone-like cell phone this side of Cupertino. As of last June, Rubenstein is Palm's CEO, and the war between Apple and Palm is now fully underway.

The feds are already digging into alleged anti-poaching agreements between Apple, Google, Yahoo, and others, which if true would represent collusion between the companies — an antitrust no-no. This is sure to toss some gasoline onto that fire.

As the Mercury News' John Boudreau notes, there are situations where nonpoaching agreements are prefectly legal:

"...such as when they form close partnerships that give managers deep knowledge of their collaborators' rank and file, he said. Non-solicitation agreements are also permitted when one company acquires another, say a startup. The stipulation prevents the founder from leaving with his top lieutenants to immediately launch a competing company."

IANAL, but the Apple-Palm scenario really doesn't seem to fit.

Of course, Jobs is the Teflon CEO. Almost nothing tarnishes him, from his near-pathological desire for secrecy to his well-known tirades against other Appletons.

The Bloomberg report was careful to note that it did not see any communications where Jobs directly made the nonpoaching offer, only the ones where Colligan rejected it. However, Jobs did make a not-so-veiled threat about "having more patents and more money than Palm" if it came down to a legal grudge match. That sounds like Jobs to me.

As PCworld's Tech Inciter David Coursey notes:

"It is disappointing, but hardly amazing, that Jobs would try to do something that shows such disrespect to the engineers and others who actually create the products he gets credit for....Steve, there is an easy way to "stop this" that isn't nearly so likely to trigger a federal investigation: Stop treating your people like indentured servants. Treat them well, pay them what they are worth, and accept that even then some will want to leave for different, even greener pastures."

Will this be the thing that finally brings down the Annointed One? Somehow I doubt it. The most I see coming out of this are a long legal wrangle, followed by some kind of settlement involving fines and a vow to "do better next time."

But it does indicate the kinds of stakes at play here in mobile wars, how far companies are willing to go to protect their turf, and just how nasty it's likely to get.

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